On August 9, 2016, a Federal jury in U.S. District Court, San Francisco, CA, found Pacific Gas and Electric Company (PG&E) guilty of multiple willful violations of the Natural Gas Pipeline Safety Act of 1968 (PSA) and obstructing an agency proceeding. PG&E is California’s largest utility.

DOT-OIG had initiated an investigation after the 2010 explosion of a natural gas pipeline in San Bruno, CA, that killed eight people. The PSA charges related to PG&E’s record-keeping and pipeline “integrity management” practices; the obstruction charge was added later after it was discovered that PG&E had attempted to mislead the National Transportation Safety Board (NTSB) during its investigation.

The evidence presented at trial demonstrated that PG&E willfully failed to address record-keeping deficiencies concerning its larger natural gas pipelines, knowing that their records were inaccurate or incomplete. The evidence further demonstrated that PG&E willfully failed to identify threats to its larger natural gas pipelines and to take appropriate actions to investigate the seriousness of threats to pipelines when they were identified. In addition, PG&E willfully failed to adequately prioritize as high risk and properly assess threatened pipelines after they were over-pressurized, as required by the PSA and its regulations. In finding PG&E guilty, the jury concluded the company knowingly and willfully violated the PSA and its regulations between 2007 and 2010. 

The charge of obstructing an agency proceeding was included in a superseding indictment filed on July 29, 2014. The charge centers around PG&E’s use of a letter in an attempt to mislead the NTSB, which began its investigation immediately after the deadly San Bruno explosion. During the investigation, PG&E provided a version of a policy that outlined the way it had addressed manufacturing threats on its pipelines. Specifically, PG&E did not prioritize as high risk and properly assess many of its oldest natural gas pipelines, which ran through urban and residential areas. Although PG&E operated under the policy from 2009 through April 5, 2011, the company submitted a letter to the NTSB attempting to withdraw the document, stating that it was an unapproved draft that had been submitted in error. In finding PG&E guilty of obstructing an agency proceeding, the jury concluded the company intentionally and corruptly tried to influence, obstruct, or impede the NTSB investigation.

DOT-OIG conducted this investigation with the city of San Bruno Police Department, San Mateo County District Attorney’s Office, and the Federal Bureau of Investigation.