A natural gas pipeline operated by PG&E exploded Sept. 9, 2010, in San Bruno, Calif., killing eight people and damaging 38 homes. The National Transportation Safety Board said PG&E didn't know what kind of pipe was beneath San Bruno and had said defective welds contributed to the explosion.
An administrative judge in California said PG&E customers should pay about 55 percent of the $2.2 billion in pipeline upgrades. The company had wanted customers to pay 84 percent of the costs.
"Shareholders should not be excused from their duty to pay the costs of retesting, and ratepayers should not receive a new pipeline at no cost," Judge Maribeth Bushey was quoted by The San Francisco Chronicle as saying.
PG&E aims to replace more than 180 miles of pipeline and test another 700 miles in a safety overhaul. The company, in a statement, said the judge's ruling was "wholly inadequate."
The draft ruling now goes before a five-member public utilities commission.