$87 million penalty in California utility case

SAN FRANCISCO (AP) -- California's biggest utility has agreed to an $86.5 million penalty in an insider-dealing case with state regulators.

Pacific Gas & Electric Co. and other parties in the negotiated agreement filed terms of the proposed penalty on Wednesday.

The case grew out of probes into a 2010 PG&E gas-line explosion that killed eight people in the San Francisco suburb of San Bruno. Some of thousands of emails released afterward showed PG&E officials and regulators with the California Public Utilities Commission wining and dining each other, and privately discussing public business involving the utility and commission.

The penalty includes $6 million each to San Bruno and another nearby city, San Carlos. Most of the rest would go to PG&E customers, reducing their monthly bills an average of 22 cents through 2019.

It is the latest in a series of penalties and court cases stemming from the 2010 gas-line blast. California's attorney general and U.S. attorney said last year they were investigating the insider-dealing allegations against state and utility officials. The state and federal prosecutors have disclosed little on the matter since then.

In a statement, PG&E spokesman Donald Cutler said the utility was "committed to interacting with our regulators in a completely transparent and ethical manner." The utility says the executives who carried out the improper private contacts with regulators are no longer with the company, and that it has stepped up oversight on the matter.

Utilities commission spokespeople did not immediately respond to an email Wednesday seeking comment.

The two California Public Utilities Commission members shown in emails to be privately discussing rate cases, hearings and other public matters with the utility executives left the board after their terms expired.

The penalty terms filed Wednesday still require formal approval by the utilities commission.