Law enforcement officials sift through rubble after a natural gas explosion in San Bruno, California, in September 2010.
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Law enforcement officials sift through rubble after a natural gas explosion in San Bruno, California, in September 2010.

Story highlights

Money from PG&E will benefit all citizens, San Bruno's mayor says

"This accident will affect this community forever," says PG&E president

Federal investigators say a faulty pipe and inadequate oversight led to the blast

CNN —  

Pacific Gas & Electric Co. will pay San Bruno, California, $70 million in restitution for the pipeline rupture that killed eight people and destroyed dozens of homes in September 2010, the utility and city said Monday.

“This money will be used for the benefit of all the citizens of our city and to help us, as a community, get beyond the tragedy and devastation caused by PG&E’s explosion and fire,” San Bruno Mayor Jim Ruane said in a joint news release.

Federal officials said in August that a faulty pipe, flawed operations and inadequate government oversight led to the natural gas explosion in the San Francisco suburb.

“The community of San Bruno has suffered through a terrible tragedy and we understand that this accident will affect this community forever,” PG&E President Chris Johns said.

The city will establish a separate not-for-profit public purpose entity to manage the funds and determine how the restitution should be spent for the benefit of the community as a whole, the statement said.

“This $70 million payment is in addition to PG&E’s commitment to fund replacement and repair of the city’s infrastructure and other costs related to the accident and restoration of the neighborhood,” it said. “The utility will not seek to recover the contribution through insurance or customer rates.”

During a public board meeting after delivering their final report on the matter, National Transportation Safety Board investigators sharply criticized pipeline owner PG&E for the explosion, saying the pipe was inadequate from the time it was installed in 1956.

That was compounded “by a litany of failures” over the years, including poor record-keeping, inadequate inspection programs and “an integrity management program without integrity,” NTSB Chairwoman Deborah Hersman said.

“It was not a question of if this pipeline would burst,” she said. “It was a question of when.”

Hersman said the probe yielded “troubling revelations about a company that exploited weaknesses in a lax system of oversight, and government agencies that placed a blind trust in operators to the detriment of public safety.”