(Reuters) — California's chief utility regulator on Thursday ordered Pacific Gas & Electric Corp. to pay a record $1.6 billion in fines and other penalties stemming from its deadly 2010 San Bruno natural gas pipeline rupture and fire near San Francisco.

The sum marks the largest penalty ever imposed by the five-member California Public Utilities Commission, dwarfing a $38 million fine against PG&E for a 2008 natural gas explosion in Rancho Cordova, California, according to the agency.

Commission President Michael Picker said the order also ranked as "one of the biggest utility sanctions in U.S. history."

PG&E Chairman and Chief Executive Officer Tony Earley said his company was still reviewing the ruling but did not expect to appeal it.

The latest penalties cover nearly 3,800 violations of state and federal laws and regulations that two administrative law judges for the commission found in connection with PG&E's pipeline network, including the 2010 explosion.

The enforcement action includes an $850 million shareholder penalty that would pay for gas transmission pipeline safety infrastructure; a $300 million fine; a $400 million billing credit to be spread across PG&E's gas customers; and $50 million in other remedies to enhance pipeline safety.

As approved by the commission, the penalties must be borne entirely by PG&E's shareholders and may not be passed on to the utility's customers.

When added to disallowances already adopted in a prior CPUC decision, the penalties and remedies would exceed $2.2 billion, the commission said.

The pipeline explosion on Sept. 9, 2010, in San Bruno, a city just south of San Francisco, destroyed an entire neighborhood, killing eight people and injuring 58 others.

The National Transportation Safety Board later blamed the utility for a lax approach to pipeline safety and faulted state regulators for weak oversight.

In a statement announcing the penalty, Mr. Picker addressed his agency's share of responsibility in the tragedy.

"PG&E failed to uphold the public's trust. The CPUC failed to keep vigilant. Lives were lost. Numerous people were injured. Homes were destroyed," he said. "We must do everything we can to ensure that nothing like this happens again."

In his statement, Mr. Earley said his utility was "deeply sorry for this tragic event, and we have dedicated ourselves to re-earning the trust of our customers and the communities we serve."