PG&E Denies Charges Over Blast in San Bruno

     SAN FRANCISCO (CN) - Pacific Gas and Electric Co. pleaded not guilty today to 28 federal felony charges stemming from the 2010 pipeline explosion in San Bruno that killed eight people and injured dozens.
     PG&E's attorney Steve Bauer appeared on behalf of the company, which faces one count of obstructing a government investigation and 27 counts of violating the Natural Gas Pipeline Safety Act. In all, officials say, criminal fines could reach more than $1 billion. U.S. Attorney Hallie Hoffman represented the prosecution.
     "We believe it's high time PG&E cleaned up its act," San Bruno City Manager Connie Jackson said at a press conference after the hearing. "That it understood and took full responsibility ... for its malfeasance in operating the pipeline system."
     In a superseding indictment filed last month, prosecutors alleged that the utilities company lied to the National Transportation Safety Board during its investigation into the San Bruno incident.     
     Denying the obstruction allegation in a statement, PG&E noted that it promptly responded during the NTSB investigation "to hundreds of questions and requests for information and documents."
     " In the one response questioned in the USAO charge, PG&E had submitted a cover sheet approval form mismatched to the wrong internal engineering document," the statemetn continues. "PG&E corrected this error with a letter dated April 6, 2011. The NTSB published the letter on its accident investigation docket on September 30, 2011, and it has been publicly available since then. PG&E believes the letter is true and accurate and stands by it."
     The blast killed eight people, destroyed 38 homes and allegedly cost victims nearly $565 million in damages.
     Prosecutors said that from 2009 to mid-2011 the company operated under a dangerous policy, not properly assessing some of its fragile pipelines that run through residential areas. The company also allegedly failed to keep accurate and complete records, and did not take appropriate actions when there were threats to pipelines.
     PG&E noted in a statement that they have "taken accountability and are deeply sorry" for the tragedy at San Bruno.
     "Based on all of the evidence we have seen to date and our review of the new indictment, we still do not believe that PG&E employees intentionally violated the federal Pipeline Safety Act, and that, even where mistakes were made, employees were acting in good faith to provide customers with safe and reliable energy," the statement continues.
     San Bruno has asked U.S. Attorney Melinda Haag to consider seeking further penalties, including requiring an independent monitor to oversee PG&E's safety progress and using a portion of the fines to establish a California Pipeline Safety Trust to advocate for the public, Jackson said.
     PG&E countered that the issue of "financial penalties would be moot if the government fails to prove its case.
     San Bruno officials told the San Francisco Chronicle in July that they had obtained emails documenting "cozy ties" between PG&E and the state regulatory body charged with overseeing it, the California Public Utilities Commission. Emails showed that an aide to CPUC President Michael Peevey advised a PG&E executive on ways to avoid legal issues after the 2010 explosion.
     The revelations have led San Bruno officials to call for Peevey's resignation.
     "We do not trust the CPUC to perform its statutory functions," Jackson said, adding: "Effective regulation cannot occur in an environment where everybody are buddies."
     The criminal fines PG&E faces compound civil fines from the CPUC that could total nearly $2.5 billion.