Pacific Gas and Electric Company, the California Public Utilities Commission and the City and County of San Francisco have reached a settlement stemming from a 2003 fire at the Mission Substation.

"Immediately after the incident, PG&E accepted responsibility for the outage and the impact and inconvenience to the city and visitors on this busy holiday shopping day, and our apology today is as heartfelt as it was then," said Jeff Butler, senior vice president of transmission and distribution at the utility. "To make up for this incident, we want to make a contribution to the community that enhances public safety and electric reliability, which is above and beyond reimbursing customers for any losses they suffered."

PG&E has agreed to pay $6 million for various programs relating to electric reliability, safety and beautification projects in San Francisco and a $500,000 payment to the state's general fund to settle the proceeding, in which the CPUC sought a $10 million fine and the San Francisco Public Utilities Commission sought a $14.6 million fine.

The $6 million in payments include $3 million to hire an independent consultant to study and implement reliability improvements in San Francisco; $1 million to improve an outdoor switchyard in the Hunters Point neighborhood; $750,000 for a fire safety program and specialized fire equipment for the San Francisco Fire Department; a $750,000 payment to the CCSF to spend on infrastructure to improve public safety in the event of electrical outages; and $500,000 to support development of a CPUC substation inspection program that will apply to all investor-owned utilities.

The 2003 Mission Substation fire resulted in a power outage to 100,000 customers on a Saturday evening. While most customers had power restored by early the next morning, the outage did affect thousands of businesses and residences on the last weekend before Christmas.

Within days of the incident, the company's investigation discovered, and it then publicly announced that improvements could have been made that would have enabled PG&E to respond more quickly to the fire, which began when a cable's insulation failed and short circuited. The company has since changed response procedures and installed smoke detection equipment, replaced cables similar to the one that failed, and replaced all damaged equipment at the substation.

In 1996, a small fire occurred when a cable splice failed at the Mission Substation that resulted in a minor outage. Afterwards, PG&E issued an internal report that recommended the company consider installing smoke detection to supplement the existing systems and other equipment at the substation and review its internal response procedures. Those changes were made after the 2003 outage.

PG&E readily admits the recommendations in the 1996 report could have mitigated the extent of the Dec. 20 outage, but those recommendations would not have prevented the equipment failure and fire, or an outage.

On March 26 of this year, a circuit breaker at the Mission Substation failed due to an internal problem and caught fire. In this situation, the smoke detection equipment enabled PG&E and the San Francisco Fire Department to respond quickly. Approximately 23,400 customers lost power and all were restored within just over four hours, and most within one hour.