Bloomberg News

PG&E to Settle Almost All San Bruno Pipeline Explosion Claims

September 10, 2013

PG&E Corp. (PCG:US), owner of California’s largest utility, said it will settle “substantially all” remaining personal injury and property damage claims from a 2010 natural gas pipeline explosion that killed eight people.

The utility announced the agreement yesterday in a regulatory filing, saying that in the quarter ending Sept. 30 it expects to record a charge of about $110 million in addition to cumulative charges of $455 million to pay for the settlements reached on Sept. 6 and yesterday. PG&E previously disclosed that it faced about 160 lawsuits filed on behalf of 500 people and a total possible loss of $600 million.

Mike Danko, a lawyer who represents 26 households in the litigation that had pulled out of the settlement talks, said his clients will join the agreement because “PG&E finally agreed to pay some numbers that made sense for the victims.”

Law firms representing the three largest groups of plaintiffs agreed to the settlement, while a small minority of plaintiffs not tied to the larger groups are holding out, Danko said.

Lawyers for both sides are scheduled to appear before Superior Court Judge Steven Dylina in Redwood City, California, on Sept. 12 to tell him about the agreements, and learn how the judge wants to handle the unsettled cases, Danko said.

Proposed Penalty

PG&E has said it expects the California Public Utilities Commission to decide by the end of this year on a punishment for the September 2010 explosion. The staff of the commission has proposed a $2.25 billion penalty for PG&E for violations of safety rules leading up to the blast.

PG&E has about $992 million in insurance coverage for third-party claims related to the San Bruno explosion, according to a July 31 regulatory filing. The utility said it has $329 million of insurance recoveries for claims as of June 30.

Two of the cases are DiTrapani v. PG&E Corp., CIV499291, and Dare v. Pacific Gas & Electric Co., CIV498932, California Superior Court, San Mateo County (Redwood City).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Mark Chediak in San Francisco at mchediak@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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