Crews battle a massive fire following a PG&E pipeline explosion in a residential neighborhood in San Bruno, Calif. September 9, 2010. (Mike Koozmin/2010 S.F. Examiner file photo)

PG&E agrees to pay $90M to shareholders in connection with San Bruno disaster

PG&E Co. has agreed to pay shareholders $90 million to settle lawsuits stemming from the 2010 San Bruno pipeline disaster that blamed it on corporate mismanagement.

The settlement marks the end of seven years of legal battles following the Sept. 9, 2010, explosion and fire, which killed eight San Bruno residents and destroyed 38 homes. Dozens more were injured in the explosion and fire following the rupture of a high-pressure natural gas transmission pipeline that had a defective weld and was incorrectly listed in PG&E records as seamless.

Frank Pitre, lead attorney for PG&E shareholders, said in a statement that the settlement “represents a significant amount for this type of derivative litigation” and that the company now has to “spend a significant amount of cash on reforms that have been negotiated.”

Last August, PG&E was convicted of five counts of violating the U.S. Natural Gas Pipeline Safety Act’s requirements for identifying, evaluating, recording and prioritizing risks in regard to several Bay Area transmission lines.

It was also found guilty of obstructing the National Transportation Safety Board’s investigation by misleading the agency about its policy on when it was necessary to conduct expensive high-pressure water tests on potentially risky lines.

In January, a U.S. District Judge Thelton Henderson in San Francisco ordered PG&E to advertise its pipeline safety criminal conviction in newspapers and on television as part of its sentence for that conviction.

Henderson also sentenced the utility giant to the maximum $3 million fine, placed PG&E on five years’ probation, and ordered the establishment of a court-appointed monitor.

Henderson also required PG&E officials to provide 10,000 hours of community service, including 2,000 hours by high-level personnel.

In other proceedings, PG&E has paid $70 million in compensation to San Bruno, settled survivors’ civil cases in San Mateo County Superior Court for about $565 million, and paid a record $1.6 billion penalty in three related cases before the California Public Utilities Commission.

The CPUC cases concerned the San Bruno explosion, pipeline record-keeping, and pipeline maintenance in high-population areas.

Bay City News contributed to this report.

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