With legal assurances included to protect the safety of its residents and visitors, the City of Carmel-by-the-Sea has reached an out-of-court settlement in the lawsuit that it filed against Pacific Gas & Electric in connection with a gas leak and explosion that destroyed an unoccupied single-family residence at the southwest corner of Guadalupe Street and Third Avenue on the morning of March 3, 2014.

The Carmel City Council approved the settlement 4-0 at its meeting on Tuesday, June 6, in City Hall Council Chambers.

Among its many provisions the settlement requires PG&E to conduct regular system-wide inspections and preventive maintenance of natural gas distribution lines within Carmel as well as to provide transmission and distribution line maps to City personnel. The utility will install natural gas distribution line protection equipment and keep greatly improved record-keeping practices.

“Safety was the key component of this settlement,” City Administrator Chip Rerig said. “What happened on March 3, 2014, simply can never happen again. We were fortunate that no one was injured. This could have been a huge tragedy. We will closely monitor PG&E activities to make certain all components of this agreement are observed.”

PG&E also agreed to carry crimping devices on its trucks that can seal gas leaks almost immediately. Its trucks in Carmel did not have such devices at the time of the leak and explosion.

“This has been a three-year long process and it is gratifying to finally bring it to a conclusion,” said Paul Tomasi, Carmel’s police chief and director of public safety. “We look forward to a much better relationship with PG&E and are confident the changes in safety measures and practices will make their operation safer and thus provide our community some peace of mind moving forward.”

The City and PG&E are combining on an 811 program to ensure that gas lines are not damaged by homeowners or contractors due to trenching or digging. Before any such activity occurs a call to 811 must be made to make certain that no such damage to gas lines or other beneath-ground utilities will occur.

Strongly feeling that a PG&E-sponsored internal investigation of the explosion was inadequate the City filed suit and requested that the California Public Utilities Commission (CPUC) investigate the utility’s record-keeping practices regarding its gas distribution lines in Carmel.

With the City taking an active role in the CPUC’s investigation, the state agency fined PG&E $37.3 million for the explosion and the utility’s response. This was the second largest fine against a natural gas utility in state history. That amount included $26.5 million because of its failure to comply with record-keeping practices and $10.8 million for its emergency response practices following the gas leak and subsequent explosion.

In March of 2014, PG&E utility crews were at work on a main gas line immediately adjacent to the home when the explosion happened.

The cause was attributed to a leak after PG&E workers tapped into a gas main under the belief that it was just steel. However, it contained a plastic insert. As work on the line continued, gas that leaked into the space between the steel shell and the plastic lining followed the gas line into the wood residence, precipitating the explosion.

Due to the explosion remnants of the roof and wood and glass debris were sent flying throughout the immediate area. A few nearby residences suffered minor damage that included broken windows. Residents within a one-block radius were initially evacuated as a precaution.

At the request of then-Mayor Jason Burnett immediately following the explosion, PG&E agreed to restrict its operations to emergency work only in Carmel. Some 7 ½ months later the CPUC gave the utility approval to resume all operations in the village.

A key aspect of Carmel’s concern was the fact that the City’s police and fire departments were not informed of the gas leak until after the explosion at the home.

Members of City Council-appointed an ad hoc committee to negotiate with PG&E consisting of Mayor Steve Dallas, Rerig and Tomasi with the support of City Attorney Don Freeman and the legal firm of Meyers Nave.

The City will also receive $1,617,000 from the Pacific Gas & Electric Company as part of the agreement to cover the costs of repairs and time that city police and fire departments and public works spent dealing with the explosion and what ensued. The settlement does not include City attorneys’ fees of approximately $530,000 because the case was settled out of court

“It’s not about the money. It’s about the health and safety of our community,” Mayor Steve Dallas said about the settlement at the Tuesday [June 6] City Council meeting.

An emphasis of the settlement was to repair relationships with the community. As part of the agreement PG&E worked with Carmel to develop an “Engagement Plan” that will focus on community involvement. This plan is highlighted by a tree-planting campaign with Friends of Carmel Forest, which will also receive $25,000 from the utility. Working with Friends of Carmel Forest, PG&E will plant and maintain 100 trees within the next year. The City will oversee this operation to ensure that the proper types of trees are planted and where they are placed.

PG&E also agreed to defend Carmel against any third-party claims relating to the explosion as well as pay any attorneys’ fees of the City from any such claims.