The California Public Utilities Commission has been investigating what caused the company's pipeline to explode on Sept. 9, 2010 in San Bruno. The blast killed eight people, injured dozens and destroyed 38 homes.
Commissioners unanimously approved the penalty consideration case at their meeting Thursday.
A CPUC administrative law judge is expected to hold a prehearing conference soon to set up a timetable for the case, which comes on the heels of two smaller legal probes. It could lead to a string of penalties if the judge finds the company violated the law.
PG&E President Chris Johns says the company will cooperate with the investigation.