$1M fine for UGI for failing to fix gas leak

A UGI gas utility has agreed to pay a $1 million fine to Pennsylvania regulators to settle a whistle-blower's allegations that it failed to adequately maintain and repair a high-pressure gas main.

The proposed settlement with the Pennsylvania Public Utility Commission's enforcement bureau, filed Friday, would be the largest fine assessed against a utility since the Pennsylvania legislature last year increased the maximum penalty from $500,000 to $2 million.

UGI Penn Natural Gas Inc. agreed to the settlement without admitting any culpability. The company is an operating unit of UGI Utilities Inc., of Reading, which is owned by UGI Corp., of Valley Forge.

The PUC's five members can accept, reject, or modify the settlement.

According to the settlement, a utility employee alerted federal pipeline regulators in May 2012 that UGI Penn Natural Gas had failed to properly repair a 10-inch-diameter gas main in a busy commercial area in Wilkes-Barre that was leaking dangerously.

The federal Pipeline and Hazardous Materials Safety Administration notified the PUC's investigators of the whistle-blower's allegations that "the gas company may be trying to cover up" the leak under Wilkes-Barre Township Boulevard.

The PUC's enforcement unit found that the utility understated the severity of the leak and that initial repairs failed because they were inadequate to contain the pipeline's high pressure. The utility had not reduced pressure on the main after the leak was discovered.

The steel gas main had been constructed in 1971 and had experienced 12 leaks since 1986. Three of those leaks had occurred since UGI acquired the gas system from PG Energy in 2006.

The PUC's enforcement bureau alleged that UGI-PNG violated federal and state law by inadequately monitoring and repairing leaks, incorrectly classifying leaks, and inadequately documenting leak surveys.

The company agreed to improve its processes for tracking leaks and commission an independent audit of its leak assessments.

UGI and the PUC's investigation and enforcement bureau agreed to settle the allegations without a formal investigation.

In a statement, UGI-PNG said the "joint settlement is fair and in the best interests of the company, its customers, and the communities it serves."

"UGI-PNG knows that it is the company's responsibility to safely deliver natural gas to our customers," the statement said. "UGI-PNG is committed to its ongoing efforts to further enhance the safety and reliability of the company's facilities and practices."