Press Release

PUC Approves Settlement with UGI in 2011 Allentown Explosion, Increases Civil Penalty to $500,000

Published on 1/24/2013

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today modified a settlement reached as part of an investigation of a 2011 explosion that killed five people in Allentown by increasing the civil penalty to $500,000, among other things.

         The Commission voted 5-0 to approve a joint motion by PUC Chairman Robert F. Powelson and Vice Chairman John F. Coleman Jr. that, among other things, increased the civil penalty from $386,000 to the maximum allowed by law at the time of the explosion, $500,000. Civil penalties cannot be recovered from ratepayers and are paid to the state’s general fund.

         “We want to emphasize that UGI’s compliance history related to gas safety issues is patently unacceptable,” said Chairman Powelson and Vice Chairman Coleman in their joint motion. “This is the eighth time in slightly more than four years that this Commission has adjudicated a matter containing allegations of gas safety violations by a UGI-owned gas distribution utility.  This goes beyond cause for concern; it is downright alarming.”

         Commissioner Wayne E. Gardner said in a statement “While I agree that the settlement, as modified today, is in the public interest because it accelerates the replacement schedule for UGI’s cast iron pipelines, I do not agree with the settlement provision that UGI will not utilize the distribution system improvement charge for two years.”

In addition, the joint motion also required UGI to file with the Commission for comment and approval a pilot program designed to test enhanced leak detection measures in Allentown; file an updated distribution system integrity management program plan; and file a plan establishing an initial schedule for meeting the main replacement requirements outlined in the settlement.

Under the terms of the settlement, UGI also will:

• Replace all cast iron natural gas pipelines over a 14-year period and bare steel over a 30-year period;
• Enhance its odorant testing program; and
• Install fixed odorant level monitoring equipment at all third-party points of delivery into UGI’s pipeline system and fixed odorizes at gate stations serving Allentown, Lancaster, Reading, Harrisburg and certain other population centers in its service territory.

If either UGI or the PUC’s Bureau of Investigation and Enforcement (I&E) object to the additional terms imposed by the Joint Motion, the matter will be remanded to the PUC’s Office of Administrative Law Judge for further proceedings.

On June 11, 2012, I&E filed a complaint against UGI regarding a natural gas explosion that killed five people on Feb. 9, 2011, at 542 and 544 North 13th St., Allentown. I&E said the cause of the explosion was a 12-inch cast iron gas main with a circumferential crack located under Allen Street. The complaint alleged 178 violations of the Commission’s regulations, the Public Utility Code or federal regulations.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, video and audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov.

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Docket No. C-2012-2308997

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