SAN MATEO (KCBS)— Assemblyman Jerry Hill and Utility Reform Network, a consumer watchdog group, are alarmed by the PG&E proposal that would have ratepayers shoulder the costs to upgrade its natural gas pipeline system in the wake of the 2010 San Bruno explosion.

The Peninsula assemblyman called on the California Public Utilities Commission to reject the proposal and claimed the energy company would be profiting from the deadly disaster.

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“They get a guaranteed 11.35 percent rate of return on all their capitol improvements. That is outrageous to have PG&E profiting from what occurred in San Bruno,” he said.

KCBS’ Margie Shafer Reports:

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However PG&E spokesman Brian Swanson said the state’s desire to be a leader in energy efficiency and the environment led to the adoption of the business model, so earnings are not based on how much energy is sold.

“We’re only asking to cover in rates those costs that are necessary to meet new gas safety laws and regulations,” Hill said.

An analysis by Hill’s office found the largest component of the cost of PG&E’s plan is shareholder profit.

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