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Where should the money go in record utility fine?

A hard hat sits on the ground at a Pacific Gas and Electric (PG&E) work site on July 30, 2014 in San Francisco, California. A federal grand jury has added 27 new charges, including obstruction of justice, the criminal case against Pacific Gas and Electric for the 2010 fatal natural gas explosion in San Bruno, California. The new indictment charges PG&E with felonies and replaces a previous indictment of 12 charges related to the utility's safety practices.
A hard hat sits on the ground at a Pacific Gas and Electric (PG&E) work site on July 30, 2014 in San Francisco, California. A federal grand jury has added 27 new charges, including obstruction of justice, the criminal case against Pacific Gas and Electric for the 2010 fatal natural gas explosion in San Bruno, California. The new indictment charges PG&E with felonies and replaces a previous indictment of 12 charges related to the utility's safety practices.
Justin Sullivan/Getty Images

A proposed utility fine that would send nearly $1 billion to the state of California has set up a tussle over how the state punishes corporate wrongdoing and who should benefit from the record-sized penalty.

Pacific Gas & Electric Co. plans to appeal a proposed $1.4 billion judgment that allocates $950 million for the state treasury.

The decision Tuesday by Public Utilities Commission judges stems from a 2010 gas pipeline explosion that killed eight people in suburban San Francisco.

The company says any penalty should benefit public safety. The city of San Bruno, where the blast took place, and consumer groups want to more money invested in testing and updating miles of aging pipeline.

The proposed judgment is the largest safety-related penalty ever imposed against a public utility in California.