Politics & Government
Senator Hill and Assemblyman Mullin Against PGandE
ALL California legislators need to support this bill
ABOVE: Assemblyman Kevin Mullin
Find out what's happening in South San Franciscofor free with the latest updates from Patch.
ABOVE: Senator Jerry Hill
Contact your Senator and Assemblymember from your California city asking them to support this bill.
Find out what's happening in South San Franciscofor free with the latest updates from Patch.
Advisory – July 15, 2015 – Office of State Senator Jerry Hill
CONTACT: Aurelio Rojas, Communications Director, 916-747-3199 cell or 916-651-4013 office
Legislature To Hold First Hearing On Bill By Senator Hill And Assemblymember Mullin To Bar PG&E From Taking State Tax Deductions On $1.6 Billion Fine For San Bruno Pipeline Blast
Senate Bill 681 Would Prevent $115 Million From Being Siphoned From General Fund To Cover Tax Break
WHAT: The California Senate Governance and Finance Committee holds the first hearing on SB 681 by Senator Jerry Hill and Assemblymember Kevin Mullin to prohibit Pacific Gas and Electric Co. (PG&E) from taking $1.3 billion in state tax deductions for the $1.6 billion fine that was levied against the utility for the San Bruno gas pipeline explosion.
WHEN: Wednesday, July 15, 9:30 a.m.
WHERE: State Capitol, Room 112
BACKGROUND: Senator Hill, D-San Mateo/Santa Clara Counties, and Assemblymember Mullin, D-San Mateo, noted in introducing SB 681 that California Public Utilities Commission (CPUC) President Michael Picker has asked state and federal tax agencies to deny the tax deductions. The state tax break would cost the general fund $115 million and allow PG&E to skirt the full penalty for the Sept. 9, 2010, explosion that killed eight people and leveled a neighborhood.
In April, the CPUC fined PG&E a record $1.6 billion – to be paid by the utility’s shareholders – after an investigation by the National Transportation Safety Board pinned the cause of the explosion on a faulty pipeline weld. PG&E’s inadequate record keeping and poor safety culture allowed the utility to ignore the hazard for 54 years.
Rather than steer the entire penalty to the state general fund, the CPUC allocated the bulk of it to improvements to PG&E’s pipeline system to improve safety and reduce the amount customers would have to pay. The ruling called for the fine to be disbursed by sending $300 million to the general fund, $400 million in one-time bill credits to customers, $850 million in pipeline improvement to offset customer costs and $50 million to implement various remedies. Only $300 million of the fine is clearly not deductible.
The CPUC imposed the fine with the clear intention that it was not to lead to a tax windfall for the utility. In a letter to the state and federal tax agencies, Picker wrote, “We want to express our hope that any attempt by PG&E to deduct any of these costs will be disallowed on the basis of their punitive nature.” Since the explosion, PG&E has been hit with multiple lawsuits, criminal indictments and enhanced regulatory measures because of the company’s inadequate safety testing, maintenance and repair of pipelines. Avoiding those costs enabled the utility to steer more profits to shareholders.
###
Nate Solov
Senior Correspondent – San Bruno Patch
Photo Credit: San Bruno Patch Archives
Source Credit: CA State Senator Jerry Hill
CLICK HERE to Subscribe to News Alerts and a Daily Email Newsletter for San Bruno Patch
