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Pennsylvania PUC Hikes Columbia Gas Penalty to $200K

The Pennsylvania Public Utility Commission (PUC) voted unanimously to nearly double a fine it had levied earlier this year against Columbia Gas of Pennsylvania Inc. after an investigation revealed various operating practices and incidents involving a third-party contractor had run afoul of state and federal regulations.

On Thursday, the commission voted 5-0 to increase the civil penalty against Columbia Gas from $110,000 to $200,000.

"Given the high number of the alleged violations and the nature of the alleged violations in this case, we find that a civil penalty amount of $200,000 would be more appropriate under the circumstances in this case in order to deter Columbia Gas from future violations," the PUC said in its order Thursday.

Thursday's order revealed that the Gas and Safety Division (GSD), part of the PUC's Bureau of Investigation and Enforcement (I&E), requested that I&E perform an initial investigation of Columbia Gas in August 2012. The probe focused on the company's valve inspection procedures; excessive pipeline pressures and related company protocols; excavation damage and related company response protocols; and a lack of pressure regulation devices.

I&E looked at roles the aforementioned practices had in nine incidents that occurred in Allegheny, Fayette, Somerset and Washington counties between December 2011 and July 2013, the PUC said.

According to the order, the initial investigation suggested that a further investigation was warranted to determine whether Columbia Gas or its third-party contractor violated state and federal regulations, and/or the company's own operating procedures. I&E subsequently concluded "that sufficient data had been gathered to substantiate allegations of violations of the Public Utility Code," as well as state and federal gas safety regulations.

Columbia Gas and I&E agreed to a settlement in February to resolve the investigation. Under the original terms of the settlement, Columbia Gas was to pay a penalty of $110,000 and would perform a series of corrective actions. The settlement stipulated that either party could withdraw from the agreement if it was modified.

But the order showed GSD remained concerned over the Delong Farm Tap, a master meter system in Bradford, PA, owned and operated by a private landowner, Casey Delong, and served by Columbia Gas.

Under the farm tap arrangement, Delong was served by a private gas line connected directly to Columbia Gas's distribution facilities. Eight consumers were connected to the farm tap. Delong was billed for usage along the gas line by all of the consumers, and she was responsible for being reimbursed.

"Columbia Gas states that, because the current estimate to install facilities to replace the Delong Farm Tap master meter system will exceed $200,000, it bears the risk of non-recovery for a significant portion of its investment in those facilities," the PUC said. "Columbia Gas expects that it will be granted recovery of its prudent investment in those facilities up to $200,000 in a future base rate proceeding...

"We commend the company for agreeing to resolve the Delong Farm Tap issue...and will likely result in the provision of safer and more reliable natural gas service to the customers currently receiving service from the Delong Farm Tap. Nevertheless, we do not believe that there is a sufficient nexus between the alleged violations in this proceeding and Columbia Gas's actions regarding the Delong Farm Tap to serve as a justifiable reason for a lower civil penalty, nor do we believe that Columbia Gas's investment in the facilities to replace the Delong Farm Tap master meter system will act as a sufficient deterrent, as the company is not precluded from seeking to recover its investment amount in a future rate proceeding."

The case was Pennsylvania Public Utility Commission, Bureau of Investigation and Enforcement v. Columbia Gas of Pennsylvania Inc. [No. M-2014-2306076].

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