Staff members of the Washington Utilities and Transportation Commission (UTC) have recommended that Washington State utility, Puget Sound Energy (PSE), be fined $2 million for failing to maintain accurate and complete records of suspected natural gas leaks.

After reviewing PSE's gas pipeline inspection records over a four-year period, staff at the Washington regulatory agency allege that the utility's contractor, Pilchuck Contractors Inc., violated record-keeping rules by intentionally filling out leak-inspection reports with incorrect information or changing those reports to reflect compliance. The UTC staff said it identified 209 violations during an audit of the Bellevue, WA-based company's pipeline safety records from January 2002 through December 2005.

Although PSE's pipeline safety records were prepared and maintained by its contractor, Pilchuck, the utility is responsible by law for ensuring its pipeline system complies with state pipeline-safety requirements, the state agency said.

The three-member commission is not bound by staff recommendations when it hears the case. If the UTC rules against PSE, the utility would not be allowed to recover the penalties from ratepayers in any future rate case, staff said.

The Washington commission monitors PSE's compliance with pipeline-safety regulations, including its pipeline-safety records, for the company's 11,350-mile natural gas distribution system in Washington State.

State regulations require PSE to maintain records containing the specific dates and times a suspected leak was investigated and the name of the person who performed the inspection. PSE must maintain its gas-leak records for as long as the pipeline is in use. The utility's operating manual requires inspections of "phantom leaks," where a reported leak is investigated but no leak is found. It also requires a follow-up inspection within 30 days by a second person not involved in the assessment of the original phantom leak.

But UTC staff members said they found several instances where PSE was unable to provide original gas-leak records. They also discovered numerous inspection reports allegedly filled out by someone other than the person who conducted the inspection, staff noted. And in other instances, they said the required follow-up inspections were allegedly not performed within 30 days.

PSE is the state's largest electrical and natural gas utility, serving more than 1 million electric and 718,000 natural gas customers in 11 counties, primarily in western Washington.

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