One Of California's Largest Utilities Becomes Only The Second Firm Criminally Charged Under Pipeline Law

Federal prosecutors are accusing San Francisco-based utility Pacific Gas & Electric Co. (NYSE: PCG) of knowingly violating federal safety rules regarding a 2010 fatal natural gas explosion in San Bruno, Calif., the Wall Street Journal reports.

The indictment, issued late Tuesday, according to the paper, specifically accuses PG&E of violating the Pipeline Safety Act of 1968 between 2003 and 2010. The California Attorney General’s Office will pursue the case jointly with federal attorneys.

The case marks the second time in U.S. history that federal lawyers have accused a company of violating the federal pipeline law.

In 2002 Olympic Pipeline Co. was the first pipeline company to be criminally charged in the U.S. under the pipeline laws. In that case, the company and three of its workers pleaded guilty for breaking federal pipeline safety rules related to a 1999 Bellingham, Wash. pipeline blast that caused three fatalaties.

The indictment lists 12 separate charges of failing to maintain pipeline records and counter to federal requirements, ignoring aging sections and failing to identify potential defects in natural gas pipes, one of which exploded. The utility is also accused of making decisions based on inaccurate and incomplete information.

"San Bruno was a tragic accident. We've taken accountability and are deeply sorry," PG&E Chief Executive Tony Earley said Tuesday in a statement.

The Sept. 9, 2010, gas pipeline explosion killed eight people, injured dozens more and caused fires that damaged more than 100 homes.

The maximum required penalty for each charge is $500,000 or a fine based on the profit the company made as a result of the violation or based on the loss to victims, according to the U.S. Department of Justice.