San Bruno fire after a gas line exploded (photo: Brant Ward, San Francisco Chronicle)
In the estimation of the state Senate’s 14 Republican members, Pacific Gas & Electric (PG&E) is not as despicable as disgraced former Los Angeles Clippers owner Donald T. Sterling.
They all voted to let PG&E keep its tax write-off for most of the $1.6-billion penalty assessed for the deadly 2010 San Bruno gas pipeline explosion, blocking Senate Bill 681 from getting a two-thirds majority by two votes. The legislation prohibits a gas corporation from claiming tax deductions for expenditures related to any penalty from the California Public Utilities Commission (CPUC). The vote was 25-14 in favor.
It got every Democrat’s vote except for Senator Cathleen Galgiani (D-Manteca), who abstained. She cited a “separation of powers issue” mentioned prominantly by Republicans, who also didn’t want to pass a law that only applied to a single entity.
As a legislative staff analyst pointed out, SB 681 had a precedent. Lawmakers easily passed Assembly Bill 877 last September, which was obviously aimed at preventing Sterling from writing off a $2.5-million fine by the National Basketball Association (NBA) for racially insensitive remarks.
The bill’s author, state Senator Jerry Hill (D-San Mateo), did not mince words about why he thought it failed. He told the San Francisco Chronicle:
“There is no argument against the bill. This is about political influence by a major utility who spends a lot of money in Sacramento on campaigns and lobbying. This is an expression of that.”
The California Public Utilities Commission (CPUC), the subject of a criminal investigation of its cozy relationship with Southern California Edison in the San Onofre nuclear plant fiasco, parcelled out the penalty in April. The commission, under the direction of newly-appointed President Michael Picker, adjusted upward a preliminary $1.4-billion penalty while lowering the amount paid as a straight fine to the state’s General Fund from $400 million to $300 million.
The law currently states that all the civil penalty can be written off of taxes, but the fine cannot. Eventually, PG&E was assessed $850 million for gas safety improvements paid by shareholders.
Critics said the improvements, which would have prevented the San Bruno blast that killed eight people and leveled a neighborhood, should already have been made. Ratepayers got a one-time $400 million payout, $50 million went to “various pipeline safety-related remedies” and the General Fund picked up the $300-million fine.
Senator Hill can bring the bill up one last time this week, in a process called “reconsideration,” before the legislative session ends.