UGI Corp.'s Pennsylvania-based natural gas utility has agreed to pay a $1 million fine to settle allegations that it failed to adequately maintain and repair a 50-year-old high-pressure gas main in Wilkes Barre.

The proposed settlement with the Pennsylvania Public Utility Commission's (PUC) enforcement bureau, filed last 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. (UGI-PNG) agreed to the settlement without admitting any culpability. The PUC still may accept, reject or modify the settlement, which was completed between the parties without a formal investigation. UGI-PNG may not use ratepayer funds to fix the pipeline under the settlement.

According to records, a UGI-PNG whistle blower alerted the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) in May 2012 that the utility had failed to properly repair a 10-inch diameter gas main in a commercial area in Wilkes-Barre that had been found to be leaking at "dangerous" levels. The PHMSA notified PUC of 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 had understated the severity of the leak and had performed shoddy initial repairs that 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 gas main was constructed in 1971 and had experienced 12 leaks since 1986, according to state officials. Three of the leaks had occurred since UGI acquired the gas system from PG Energy in 2006.

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

UGI-PNG has agreed to improve its processes for tracking leaks and is commissioning an independent audit of its leak assessments.

 UGI-PNG said in a statement 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" and "is committed to its ongoing efforts to further enhance the safety and reliability of the company's facilities and practices."