Bringing to a close its natural gas pipeline safety violations case against Dominion Peoples on Thursday, the Pennsylvania Public Utility Commission (PUC) announced that it has approved a settlement between the utility and the PUC's prosecutory staff that fines the company $50,000.

In December 2005, the PUC's prosecutory staff initiated a complaint against Dominion Peoples alleging that the company failed to adequately examine a section of buried pipeline for evidence of external corrosion or deterioration of the coating and failed to minimize the detrimental effects of stay currents.

In reluctantly approving the settlement, PUC Chairman Wendell F. Holland said one of the reasons he voted for it is because the commission recently approved the joint application of Equitable Resources Inc. and the Peoples Natural Gas Co., d/b/a Dominion Peoples. He noted that when this transaction comes to fruition Peoples Natural Gas will be in the "sole control" of Equitable Resources.

"I hope that as Peoples comes under the control of Equitable Resources Inc. we will never have these types of allegations raised against Peoples on any other natural gas distribution company under this commission's jurisdiction.

"These allegations regarding the safety and management of the Peoples system are extremely troubling. Given the severity of the allegations made by the prosecutory staff, I believe that if their case had been prosecuted and proven through this commission's hearing process a fine far in excess of the civil penalty of $50,000 provided for in the settlement would be in order," Holland added. "It is my sincere hope that this settlement will send a message to Peoples that we will not tolerate actions that will put the public's safety in jeopardy. Mishandling of natural gas resources can have catastrophic repercussions. Detailed plans of action and specific safety procedures exist for a reason -- to ensure public safety. A company cannot pick and choose which regulations it will follow. They may not disregard any standards and safety regulations."

In January 2003, Dominion Peoples discovered an external corrosion leak on a pipeline located in Armstrong County, PA. Shortly thereafter, Dominion Peoples installed a band clamp over the leak and replaced a 33-foot section of the pipeline. The company later completed a review of the pipeline and found additional corrosion concerns. By October 2005, a 733-foot section of the pipeline was replaced.

In response to the PUC's December 2005 complaint, Dominion Peoples filed an answer in February 2006 in which it denied the allegation that it failed to adequately examine the pipeline. The company stated that a plan was developed to examine the pipeline in the vicinity of the leak by digging test holes identified in consultation with the commission's gas safety inspector in July 2005. In September of last year, the prosecutory staff issued an amended complaint against the company alleging that the company had improperly capped lines at 33 sites when disconnecting customers who had transferred service to a competitor. The complaint also claimed the company had failed to promptly repair a gas leak under an intersection in Altoona.

Specifically, the amended complaint noted that when the Division of Gas Safety required Peoples to excavate 111 service line connections, it found 33 sites with various unsafe conditions, including five sites with rags and/or tape inside the pipe, six sites with duct seal and/or tape over the end of the pipe, and 22 sites with pipes that were left open. The amended complaint also alleged that Dominion Peoples violated additional regulations by failing to supply field operating personnel with its standard operating procedures, failing to indicate on service orders for the termination of services if the crew discontinued the service properly, and failing to physically disconnect the customers' piping from the gas supply and seal the pipe.

The settlement between the company and the prosecutory staff, which was filed on Jan. 8, provides for the payment of a $50,000 civil penalty.

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