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Pacific Gas & Electric Co. (PG&E) will $26 million in penalties and acknowledged safety violations in a fatal natural gas explosion that destroyed one home and damaged several others in a Sacramento suburb on Christmas Eve 2008, state regulators said.

If approved by the full California Public Utilities Commission, it would be the largest safety-related fine assessed by the regulator in more than 10 years.

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The explosion in Rancho Cordova killed 72-year-old Wilbert “Bill” Paana and injured five others, including Paana’s daughter and granddaughter. Investigators found PG&E installed incorrect pipe during a repair in 2006 and was slow in responding to a leak report the day of the blast. PG&E did not immediately return a call seeking comment.

The motion to approve the agreement — signed by attorneys for the commission’s Consumer Protection and Safety Division and the company — cited February 2011 testimony in which “PG&E stated, ‘The tragic explosion and fire … resulted from a series of failures by PG&E employees to follow prescribed procedures, failures for which PG&E takes full responsibility.'”

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The utility has faced intense scrutiny over the 2008 blast and another in 2010 that killed eight people in San Bruno.

Under the terms of the stipulated resolution, PG&E would pay a $26 million fine to the state’s General Fund and agree it violated several pipeline safety regulations. In addition, the company would pay the costs of the state investigation and the proceedings against the utility. The fines and costs would go to shareholders, not customers.

As part of the agreement, PG&E agreed pipe installed at the home on Paiute Way was not authorized for use as a gas line and not correctly pressure-tested; that it also installed inadequate pipe in the nearby city of Elk Grove in 2006 and did not follow its own procedures after discover of the problem, which could have uncovered the problem in Rancho Cordova; that it should have administered drug and alcohol tests to the employees who responded to the Christmas Eve leak; and its response that day was “unreasonably delayed and not effective.”

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