The proposed decisions by the California Public Utilities Commission staff said Southern California Edison also violated rules by failing to preserve evidence needed to investigate power-pole collapses that occurred during the storm.
An agency investigation found that Edison failed in numerous cases to maintain poles or other power equipment that were factors in both cases.
The company said in a statement that the settlement is "in the public interest." Edison has submitted a joint motion with the commission's Safety and Enforcement Division seeking approval of the agreement.
The commission is not expected to consider the penalty until at least May. If approved, funds for the agreement would come from company shareholders and would not impact customer rates, Edison said.
On Nov. 30, 2011, powerful Santa Ana winds generated gusts nearing 100 mph, leaving hundreds of downed trees and tangled high-voltage power lines that blocked streets, keeping repair trucks from reaching many hard-hit areas. Uprooted trees remained on sidewalks and in gutters days afterward.
Edison officials later called the crisis caused by the storm unprecedented and apologized to customers for delays restoring power.
The CPUC said Edison gave inaccurate information on power restoration and violated safety standards during the storm, which left 440,000 customers without power.
Among its findings, the investigation found 248 wooden electric poles were damaged and broken. At least 21 poles did not meet safety requirements, for factors including termite damage or extensive rot. In addition, the probe found Edison's emergency procedures were not kept up to date.
The utility was also blamed for an electric-pole conductor that fell to the ground, killing a man, his wife and their son. The investigation found that the Jan. 14, 2011 deaths in Acacia, in San Bernardino County, were caused by Edison's "failure to properly maintain its electric system in compliance with state law and commission regulations."
The probe found "similar conductor failures have been occurring for the past six years on the same circuit and in the proximity of this incident. However, SCE did not take appropriate measures to prevent such recurrences."