PG&E to Pay $6.5 Million in Lieu of Fines for Massive Holiday Season Outage Caused By Mission Street Substation Fire in December 2003
SAN FRANCISCO (Feb. 16, 2006) — The California Public Utilities Commission today approved an agreement between the City and County of San Francisco and PG&E in which the company will pay a total of $6.5 million in lieu of fines for a massive holiday season power outage in December 2003 caused by a fire at the company’s Mission Street substation, City Attorney Dennis Herrera announced. Of the $6.5 million total, $5.5 million will directly benefit San Francisco.
Targeting specific reliability, public safety and environmental justice improvements within San Francisco, the approved settlement includes: $3 million for reliability improvements; $1.5 million for fire and public safety improvements; and $1 million in capital expenditures for visual improvements to the Hunters Point substation. PG&E will pay an additional $1 million to the State of California, with half funding a CPUC substation inspection program and the other half going to the state’s general fund. Typical penalties assessed by the CPUC against utilities revert to the state’s general fund in their entirety. The agreement, to which the CPUC’s Consumer Protection and Safety Division is also a party, further specifies that the $6.5 million total payment must be made from PG&E shareholder funds that cannot be passed along to ratepayers.
“This settlement punishes PG&E for its neglect, in our view, while benefiting consumers and businesses in San Francisco that have been most directly plagued by the company’s reliability problems,” Herrera said. “I applaud the California PUC for seeing this agreement for the fair and prudent solution that it is. I am thankful to Supervisor Jake McGoldrick, for his leadership in urging CPUC to thoroughly investigate the outage, as well as for the assistance of San Francisco’s PUC — General Manager Susan Leal and Assistant General Manager for Power Barbara Hale, in particular — for their assistance in helping us reach this accord.”
On the afternoon of Saturday, December 20, 2003 a fire at the PG&E substation on the corner of Eighth and Mission Streets in San Francisco caused a massive power outage that, at its peak, affected more than 100,000 customers throughout the City, including downtown retail stores filled with shoppers on the busiest holiday shopping weekend of the year. Despite substantial smoke at the facility, PG&E neglected to notify the San Francisco Fire Department until more than two hours after the first signs of trouble. It was not until 11:45 p.m. the following night that PG&E finally succeeded in restoring power to all of its customers who were supplied by the Mission Substation.