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PG&E pleads not guilty to obstruction, other charges in deadly gas explosion in California

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SAN FRANCISCO - Pacific Gas & Electric Co. pleaded not guilty Monday to charges in a new indictment that accuses the utility of lying to federal investigators looking into a fatal pipeline explosion in a San Francisco Bay Area neighbourhood.

Steve Bauer, an attorney for the company, entered the plea in federal court to all 28 counts, including obstruction of justice. The new indictment — announced last month — replaced a 12-count indictment that related to PG&E's safety practices but did not include an obstruction charge.

Prosecutors say PG&E tried to mislead federal investigators about pipeline testing and maintenance procedures it was following at the time of the 2010 explosion in the city of San Bruno and for six months afterward.

The blast killed eight people and destroyed 38 homes.

The utility was operating under a company policy that did not meet federal safety standards, failing to prioritize as high-risk and properly assess many of its oldest natural gas pipelines, prosecutors said.

PG&E said in a statement on Monday that the obstruction charge stems from a paperwork error that the company quickly corrected.

"We are confident the legal process will ensure all of the facts are fully reviewed. In the meantime, we want all of our customers to know that we will stay focused on transforming this 100-plus-year-old natural gas system into the safest and most reliable in the country," the company said.

The other charges accuse the utility of failing to act on threats in its pipeline system even after the problems were identified by its own inspectors. The indictment charges PG&E with keeping shoddy records, failing to identify safety threats and failing to act when threats were found.

PG&E said Monday that employees did not intentionally violate the federal Pipeline Safety Act and even when there were mistakes, "employees were acting in good faith to provide customers with safe and reliable energy."

The new charges expose PG&E to more than $1 billion in fines. It had faced up to a $6 million fine under the old indictment.

In addition, the utility is facing lawsuits and $2.5 billion in civil fines from regulators, including the state Public Utilities Commission.

San Bruno officials said they have asked federal prosecutors to request the appointment of an independent monitor to oversee PG&E and its state regulators as part of any penalty against the company.

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