Pacific Gas & Electric will likely face federal criminal charges related to a September 2010 pipeline explosion that killed eight people and destroyed 38 homes in the city of San Bruno, Calif., the company said in a federal filing on March 27.

Photo by AP/Wideworld
Regulators were sharply critical of the California utility PG&E after a 2010 gas-pipeline explosion

“Given the most recent discussions with the U.S. Attorney’s Office, the utility expects that it will be charged with criminal violations of the federal Pipeline Safety Act. The utility believes that criminal charges are not merited and that it did not commit any knowing and willful violation of the Pipeline Safety Act,” PG&E parent PG&E Corp. said in the Securities & Exchange Commission filing.

National Transportation Safety Board investigators found that the likely cause of the rupture of PG&E’s 30-in.-dia. pipe was a visible defect present along a seam weld at the time of installation in the 1950s.

The defect grew over time until the pipe ruptured during an accidental pressure spike while electrical work was being performed at an upstream compressor station.

No complete record of the pipeline’s origin or of pressure testing has ever been found.

PG&E said it “welcomes continued dialogue toward a resolution, but now expects that the U.S. Attorney will charge that PG&E’s past operating practices violated the federal Pipeline Safety Act in areas such as recordkeeping, pipeline integrity management and identification of pipeline threats.”

PG&E said its reputation would suffer if criminal charges are filed.

Further, it said, “if the utility is found guilty of criminal violations, penalties could be imposed and such penalties could have a material impact on PG&E Corporation’s and the utility’s financial condition, results of operations, and cash flows."

The utility added that it "may be ordered to undertake remedial measures, including operating its natural gas transmission business subject to the supervision and oversight of an independent monitor.”

Carl Weimer, executive director of independent safety advocate Pipeline Safety Trust said: “This sets a whole new bar for the industry.”

The U.S. Justice Dept. “will have to prove not just incompetence, they will have to show that there were knowing and willful violations -- that someone did something on purpose,” he said.

Weimer emphasized that not much else will be known until the U.S. attorney makes a decision on charges. “There were lots and lots of records lost, and lots of obfuscation on what was really going on, but I don’t know how they would make the higher bar of a criminal charge.”

A spokeswoman for the US Attorney’s office in San Francisco could not be reached.