Consumer Federation of California

Abruptly and without explanation, federal prosecutors slashed potential criminal penalties for Pacific Gas and Electric Co. from $562 million to $6 million Tuesday while a jury was considering whether the company violated safety laws both before and after the lethal 2010 gas pipeline explosion in San Bruno.

The decision was made public in a court filing as both sides awaited the jury’s verdict in federal court in San Francisco.

Prosecutors had maintained, in filings before and during the trial, that California’s largest utility could be punished for any convictions with penalties equal to twice the amount it saved by shortcutting safety laws. They said those savings could be measured by the $281 million that PG&E estimated it would cost to comply with safety standards after the San Bruno explosion — leading to a potential fine of $562 million if the federal jury in San Francisco returned guilty verdicts.

Jurors would have considered the penalties in a second phase of the trial. But during the fourth day of jury deliberations, the U.S. attorney’s office, in a one-sentence court filing, withdrew its request for penalties based on the company’s financial gains. The office declined to comment on the reason for the filing.

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Tags: CPUC, Federal Issues, PG&E, San Bruno Explosion