In response to a mid-2008 incident when it still operated a natural gas utility in the state, PNM Resources’ New Mexico utility was fined $371,000 Tuesday by the state Public Regulation Commission (PRC) for allegedly mishandling a gas leak in an underground vault at a busy Albuquerque intersection. The regulators said it was the largest penalty ever assessed on a utility in the state.

PNM sold its natural gas utility system in early 2009. It had been part of Public Service Company of New Mexico (PNM), which remains in operation as a PNM electric-only utility (see Daily GPI, Dec. 15, 2008). With the sale, PNM Resources narrowed its focus to its 500,000-customer New Mexico electric utility operations; Texas electric distribution and transmission utility operations under Texas-New Mexico Power (TNMP); and First Choice Power, a retail electricity provider in the Texas competitive retail power market.

Approved unanimously, the five-member elected PRC issued an order imposing the record fine in lieu of a $66,000 settlement between PNM and the commission staff. “The commission opted for the more substantial fine in light of the serious nature of the violations and the risks to which the public was exposed,” said a PRC spokesperson.

PRC Vice Chairman Jerome Block said PNM “failed to address a major public health risk in a timely fashion, thereby putting lives needlessly at risk.” Therefore, Block added that “it was important for us to send a message. This fine should serve as a wake-up call for PNM and other companies whose actions affect the health and well being of others that if a problem arises, it must be addressed immediately.”

According to the PRC’s investigation, in mid-2008 a PNM employee discovered what was designated as a “Grade I hazardous leak” in an underground vault, and the leak was “largely ignored for nearly two months,” the PRC said. The investigation by the PRC’s pipeline safety bureau determined that the gas utility allegedly failed to follow proper protocol — “failing to fill out a requisite leak ticket in a timely fashion…to post adequate warning signs…to properly man the incident site…or to vent the vault properly in a timely fashion.”

“No casualties and no major injuries occurred as a result of the leak, but the potential risk was something the PRC could not overlook,” the spokesperson said.

Commissioner Jason Marks said the incident exposed “a flaw in the culture of safety at the company,” showing there was “something fundamentally wrong.”

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