Regulator: PG&E should pay $1.6 billion penalty for San Bruno gas explosion

SAN FRANCISCO (AP) -- California's top regulator on Friday proposed Pacific Gas & Electric Co. pay $1.6 billion as penalty for causing a deadly 2010 gas-pipeline explosion in the San Francisco Bay Area.

   California Public Utilities Commission President Michael Picker proposed a fine that is $200 million higher than one recommended by administrative law judges last year.

   Picker's proposal would require PG&E shareholders to pay $850 million that would go toward gas transmission safety improvements. It also orders PG&E to pay a $300 million fine that would go into the state's general fund and it mandates the utility pay $400 million in bill credit. It directs approximately $50 million towards other remedies.

   The fiery explosion of a PG&E pipeline killed eight people and leveled a residential neighborhood in the suburban San Francisco city of San Bruno. 

A probe into the blast by the National Transportation Safety Board faulted both the utility and what investigators said was lax oversight by the state utilities commission.

   The five-member commission could vote on the final penalty during its public session April 9.