Washington (Platts)--17Feb2011/426 pm EST/2126 GMT

Pacific Gas and Electric parent PG&E Corporation Thursday doubled its previous estimate of the costs it will incur from the explosion of a natural gas pipeline that killed eight people and destroyed 38 homes in San Bruno, California, in September.

In releasing fourth-quarter and full-year 2010 financial statements, the San Francisco-based company said "as a result of substantial records-validation efforts underway and additional pipeline testing and inspection that may be required, the estimated range for 2011 direction costs associated with the accident has increased to $200 million to $300 million pre-tax, compared with the prior range of $100 million to $150 million for 2010 and 2011 combined."

The company said the estimated range for third-party liability in 2011 could range from nothing to $180 million, pre-tax. Those charges, if any, would come in addition to a $220 million provision for third-party liability the company booked in Q3 2010. Projected results for 2011 do not reflect any insurance recoveries, which may not occur until after this year, PG&E Corp. added.

The company also said its Q4 arnings slipped to $250 million, or 63 cents/diluted share, from $273 million, or 71 cents/share, in the same period of 2009, in part because of charges related to the explosion.

"We are focusing the necessary resources and attention on the safety and reliability of our gas operations and improving those operations as we learn from the San Bruno tragedy," Chairman, CEO and President Peter Darbee said in a statement. "Our customers, shareholders, regulators and other stakeholders have our commitment that PG&E will vigorously apply the lessons that emerge from this experience."

The company said electric sales in the quarter were 21.3 billion kWh, up slightly from 21.2 billion kWh in the same period of 2009, with increases seen in sales to all customer classes. Total gas sales were 204 Bcf, down from 218 Bcf in Q4 2009.

--Jeff Barber, jeff_barber@platts.com

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