The Pennsylvania Public Utility Commission approved a settlement Thursday that includes a record $1 million civil penalty against UGI-Penn Natural Gas in an investigation launched after a whistle-blower’s tip.
During its public meeting Thursday, the commission voted 5-0 to approve the settlement between the natural gas utility and the PUC’s independent Bureau of Investigation & Enforcement. Under the settlement, the company will:
• Pay a $1 million civil penalty, which cannot be recovered from ratepayers;
• Implement computer recording and tracking of leak survey results;
• Conduct a third-party audit of certain leaks that addresses accuracy of characterization and quality of repair;
• Hire a third party to conduct a management audit;
• Provide additional information on high-pressure distribution pipelines.
The settlement and penalty are the result of a lengthy investigation that began after natural gas leaks on April 4 and April 5, 2012, along Business Route 309 in Wilkes-Barre Township. UGI-PNG initially performed a temporary repair and a permanent repair was completed on May 30, 2012.
During the informal investigation, the Bureau of Investigation & Enforcement looked into UGI-PNG’s leak classifications, surveys and compliance with state and federal regulations as well as UGI-PNG’s compliance with pipeline repair practices. Based on its investigation, the bureau alleged that UGI-PNG was not compliant with state and federal regulations. Under the settlement, UGI-PNG does not admit any wrongdoing.
UGI spokesman Joseph Swope issued a statement on behalf of the company.
It read, in part: “UGI-PNG has commenced a number of initiatives to expand and enhance the safety and reliability of the Company’s facilities and practices. These initiatives include but are not limited to continuously improving customer service and increasing customer satisfaction, and in adding a significant number of field construction jobs to perform work associated with the Company’s infrastructure replacement and betterment programs.”
According to the settlement, the investigation in the local incident was launched thanks to a UGI-Penn Natural Gas whistle-blower who reported that improper clamps were used to repair a leak on a high-pressure gas distribution line along Business Route 309 in the vicinity of the Sheetz gas station last year.
The report found the clamps, which are pressure rated at 100 pounds per square inch, are not considered suitable for a permanent repair on a pipe operating at 320 pounds per square inch.
“Although no serious consequences resulted from this incident, the potential for serious consequences to occur was significant,” according to the 47-page report dated Aug. 16 and filed on the PUC’s website Tuesday. “Therefore, (the Bureau of Investigations and Enforcement) submits that UGI-PNG’ s alleged conduct is of a serious nature and was considered in arriving at the substantial civil penalty in this settlement.”
A history of violations was taken into consideration when determining the penalty, the findings of a PUC investigation shows, noting that in the past five years UGI-PNG or its subsidiaries have been involved in at least nine cases arising from alleged gas safety violations.
Earlier this year, the company was fined $500,000 for a 2011 explosion that killed five in Allentown. At the time, the $500,000 was the highest allowable penalty under the law.