Pacific Gas and Electric Co. agreed to pay $65 million to settle a California Public Utilities Commission investigation alleging it falsified internal records related to its underground electric distribution and natural gas distribution infrastructure.
The investigation was initiated based on California regulators' assertion that the utility, or PG&E, falsified tens of thousands of gas safety records over a five-year period following the San Bruno gas pipeline explosion in 2010, which killed eight people.
The proposed financial remedy is comprised of a $5 million fine to be paid to the general fund of the state of California and $60 million in shareholder-funded system enhancement initiatives. The penalty will be funded by shareholders, according to the filing.
The settlement requires 28 system enhancement initiatives. Nine are focused on so-called "late ticket" issues, while another five are focused on issues identified in the locating and marking of the utility's electrical facilities. Seven more are aimed at addressing cultural issues and the last seven are for increased transparency related to "locate and mark" operations.
The PG&E Corp. utility expects that the system enhancement spending will occur through 2022, according to the filing.
The settlement agreement needs the approval by the CPUC and the bankruptcy court, since the settlement is part of the utility's broader bankruptcy restructuring plan. PG&E said it is unable to predict the outcome of the proceeding.
Parties to the settlement are the PUC's Safety and Enhancement Division and the Coalition of California Utility Employees. Parties that have participated in the negotiations but did not join the settlement are the CPUC's Public Advocates Office and Office of the Safety Advocate, the Utility Reform Network, and the city and county of San Francisco.
