PG&E Establishes Relief Fund for Victims of San Bruno, California Explosion

Pacific Gas & Electric (PG&E), the company that owned a <"">gas pipeline that exploded last week, causing a fire that devastated part of San Bruno, California, says it is setting up a $100 million compensation fund for victims of the catastrophe. However, according to several media sources, PG&E is now suggesting that it be allowed to charge customers to pay for damage caused by similar disasters.

According to The Wall Street Journal, PG&E says the relief fund will be used to cover any expenses not covered by insurance of residents of the San Francisco suburb whose property was damaged by the fires. The funds will also pay for rebuilding or replacing public property damaged or destroyed in the accident, and for certain costs incurred by emergency responders and government services who responded to the fire.

The relief fund, however, is not intended to pay for personal injury or wrongful death claims. According to the Journal, those will be dealt with separately.

The company said it will provide payments of $15,000, $25,000, or $50,000 per household depending on the extent of damage incurred, and that residents that accept such payments won’t be asked to waive any potential claims against the company.

“We know that no amount of money can ever make up for what’s been lost,” PG&E Chief Executive Officer Peter Darbee said in a statement. “This program is just one piece of our promise that PG&E will live up to its commitment to help rebuild this community and help the people of San Bruno rebuild their lives.”

In the future, however, PG&E wants to look to its customers to foot the bill for any similar disasters. According to the San Francisco Chronicle, California regulators will soon consider a proposal backed by the utility that would require customers to pay all costs of future catastrophic fires which exceed a utility company’s insurance policy. PG&E said it expects to have ‘most of the costs’ related to the recent explosion in San Bruno covered but if the new proposal is passed, customer are likely to see a hike in rates further down the line, the Chronicle said.

Under current rules, utilities in California can seek a rate increase if the costs of a disaster exceed their insurance coverage. But the Public Utility Commission can veto the request and force utility shareholders to pay the bill.

The explosion, which occurred last Thursday around 6:00 p.m. local time, shot a fireball more than 1,000 feet in the air, and sent fire tearing across several blocks. According to a CNN report, the blast sent concrete flying, and the heat from the flames melted tail lights on cars blocks away from the blaze. The blast killed at least four people, and four others are missing. About 60 people were injured, and 37 homes were destroyed.

PG&E said last Friday that the company’s gas transmission line ruptured, leading to the blaze. It is not known what caused the rupture. According to a CNN report, the ruptured line was installed in 1948, and had a “relatively high risk and likelihood of failure,” according to a PG&E document obtained by the network. The document recommended the line be replaced because of its proximity to a populated area. The Wall Street Journal reported that the gas line had an unusual construction, in that it contained a longitudinal seam and numerous welds indicating it had been made from many small segments of steel pipe.

This entry was posted in Accident. Bookmark the permalink.

© 2005-2016 Parker Waichman LLP ®. All Rights Reserved.