PG&E indicted on 12 criminal charges in San Bruno blast case Shoddy records, lack of inspections cited in San Bruno blast charges

A large section of the Crestmoor neighborhood in San Bruno lies in ruins a day after the PG&E natural gas pipeline explosion that killed eight people and leveled 38 homes on Sept. 9, 2010. A large section of the Crestmoor neighborhood in San Bruno lies in ruins a day after the PG&E natural gas pipeline explosion that killed eight people and leveled 38 homes on Sept. 9, 2010. Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 10 Caption Close PG&E indicted on 12 criminal charges in San Bruno blast case 1 / 10 Back to Gallery

Pacific Gas and Electric Co. was indicted Tuesday on 12 federal criminal counts related to the 2010 gas pipeline explosion that leveled a San Bruno neighborhood and killed eight people, including allegations that it did not conduct required inspections that could have prevented the disaster.

The indictment says the utility repeatedly violated the federal Pipeline Safety Act, which mandates that operators maintain accurate records about their gas pipes, identify risks to lines and inspect or test when pipe pressures exceed the legal maximum.

Rather than follow the law, PG&E "knowingly relied on erroneous and incomplete information" in avoiding the type of inspections that could have exposed a badly manufactured seam weld on the gas transmission line and saved San Bruno from disaster, the indictment says.

In the 54 years that the weld lurked in the ground beneath the city, PG&E never conducted an inspection that could have detected it. In part, that was because it lost records that showed the most basic characteristics of the pipe, including whether it had seams.

A federal grand jury in San Francisco indicted PG&E on one count of failing to maintain proper records on its system of more than 6,000 miles of gas-transmission lines in Northern and Central California. Nine of the 12 counts deal with over-pressurization incidents and PG&E's alleged failure to deal with them properly on three pipelines, including the one that exploded in San Bruno.

The remaining two counts accuse PG&E of failing to identify risks to its pipelines and develop plans to deal with them.

City hopes for 'justice'

"We commend the diligence of the U.S. attorney and look forward to a measure of justice that this indictment will bring to the victims and the community of San Bruno," said San Bruno City Manager Connie Jackson.

If convicted of the charges, PG&E could face a maximum of $6 million in fines and court-ordered oversight.

The indictment, sought by a task force of federal, state and San Mateo County prosecutors, does not accuse specific PG&E executives of wrongdoing.

PG&E maintains that its employees did not intentionally violate federal law and that criminal charges are unwarranted. The company says it has committed to spending $2.7 billion of its shareholders' money on upgrading its natural gas network.

Chairman and CEO Tony Earley, who was brought in to lead PG&E in 2011 after the disaster, said in a statement: "San Bruno was a tragic accident. We've taken accountability and are deeply sorry. We have worked hard to do the right thing for victims, their families and the community, and we will continue to do so.

"We want all of our customers and their families to know that nothing will distract us from our mission of transforming this 100-plus-year-old system into the safest and most reliable natural gas system in the country."

Bad from Day One

The pipe that exploded in San Bruno the evening of Sept. 9, 2010 - known as Line 132 - had been placed in the ground in 1956 with an incomplete seam weld that eventually led to the disaster.

PG&E could have discovered the problem had it ever tested the line using high-pressure water, according to the indictment. Instead, the company consistently used a cheaper testing method that could detect pipe corrosion but could not expose a bad weld.

In 2003, just before a federal law took effect mandating the more expensive water tests if a line exceeded its legal maximum, PG&E went out of its way to set a cap beyond what the San Bruno line normally carried.

The federal law restricts pressure to historical levels and calls for inspections when those levels are exceeded. PG&E normally operated the San Bruno line at 375 pounds per square inch, but briefly boosted the pressure in 2003 to just above its authorized maximum, 400 pounds.

The company said it spiked the pressure to maintain the line's authorized capacity. But the indictment says PG&E "failed to review the history of the pipelines" to make sure such spikes would not damage them.

Pressure spikes

PG&E failed to conduct tests on the pipeline when it exceeded even the elevated pressure cap, the indictment says. The company committed similar violations on a pipeline in Watsonville and one running from Fremont to Hayward, neither of which failed, the indictment says.

The faulty weld on the San Bruno line finally ruptured in 2010 when a power failure at the line's Milpitas terminus resulted in a pressure surge. The fire from the resulting explosion burned for 90 minutes while PG&E tried to find the manual shutoff valve that could cut off the gas jet fueling the flames.

In 2011, when finding PG&E responsible for the explosion, the National Transportation Safety Board said the flawed weld on Line 132 was doomed to failure from the day the pipe was installed.

"It was not a question of if this pipeline would burst," safety board Chairwoman Deborah Hersman said. "It was a question of when."

Record problems

PG&E compounded the danger through "poor record keeping, inadequate inspection programs and an integrity management program without integrity," Hersman said.

PG&E lost track of many of its pipeline records when it went from paper documents to a computerized system starting in the 1990s. The indictment notes that PG&E knew when the system was created that its database contained "incomplete and erroneous information."

The problem was compounded, the indictment says, when PG&E created a policy in 2004 that told its engineers to make critical decisions about its pipelines based only on information that was readily available. That meant that if documentation couldn't be found - and paperwork was missing for hundreds of miles of pipeline - PG&E didn't have to consider it, the indictment says.

The company also developed a policy that same year, the indictment said, that all but ruled out its use of high-pressure water testing on pipelines.

After the San Bruno disaster, the company conceded that it had no documentation for long segments of pipeline in Northern and Central California. The record-keeping problems are at the center of a state case in which the Public Utilities Commission is considering fines of as much as $2.5 billion against the company.