Sen. Jerry Hill to propose legislation allocating pipeline explosion fine toward safety measures

Amid concerns that a significant portion of a $1.4 billion fine levied against PG&E in the deadly 2010 San Bruno pipeline explosion would go toward the state's general fund, state Sen. Jerry Hill, D-San Mateo, plans to introduce legislation to ensure the bulk of the fine is dedicated to pipeline safety measures.

Under the penalty proposed by administrative judges for the California Public Utilities Commission, $950 million would be earmarked for the state's general fund, while $400 million would go for pipeline improvements about $50 million would be used to enhance pipeline safety. PG&E, which announced plans to appeal the fine, cannot recover any of the money from customers.

Any appeal must first be considered by the administrative law judges before going to the CPUC.

H.D. Palmer, a spokesman for the state Department of Finance, noted that as it stands, those funds can be spent any way the governor and Legislature see fit. Hill argued that while the proposed $950 million could be spent in other regions of the state, the allocation would come at the expense of customers in PG&E's service area, who are already expected to face rate hikes to pay for upgrades to the pipeline system.

The senator's proposed legislation being announced Friday aims to prevent customers from bearing more costs related to pipeline improvement measures, while keeping the focus on enhancing pipeline safety. Under the bill, an independent monitor would be established to oversee PG&E's use of customers' money for safety upgrades, and a pipeline safety trust would be funded for California. A similar entity was created in Washington state after a deadly pipeline disaster in 1999, Hill noted.

The proposal calls for reducing the allocation to the state general fund to $300 million, funding $50 million for a pipeline safety trust and $30 million for an independent monitor. The remainder would be used to offset the $12 billion in rate hikes PG&E has proposed for pipeline improvements, according to Hill.

The September 2010 pipeline explosion in San Bruno's Crestmoor neighborhood killed eight people, injured dozens and destroyed 38 homes.

Hill said he plans to introduce his bill when the Legislature convenes on Dec. 1.

Bay Area NewsCalifornia Public Utilities CommissionJerry HillPeninsulapipeline

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