UGI charged $1M in gas leaks

A UGI Corp. subsidiary has agreed to pay the state of Pennsylvania $1 million to settle a regulatory case involving a gas main leak in Wilkes Barre, Pa.

UGI Penn Natural Gas Inc. didn’t admit to wrongdoing in the settlement, which it reached Friday with the Pennsylvania Public Utility Commission’s Bureau of Investigation & Enforcement.

The settlement must be approved by the PUC, which will consider it this fall.

In addition to paying a $1 million penalty, which it can’t recoup from rate payers, UGI Penn Natural Gas agreed to have its gas operations audited by a third party. It also agreed to increase the number of leak surveys it performs, implement an automated system for recording them and track the results of leak surveys.

The Bureau of Investigation & Enforcement alleged that Wilkes Barre, Pa.-based UGI Penn Natural Gas improperly maintained a gas main on Pennsylvania Route 309 and that, after a leak in the main was reported on April 4, 2012, improperly investigated the leak, inadequately repaired the main, and failed to adequately monitor a hazardous condition caused by its inadequate repairs.

The bureau said it learned of the situation from a federal agency that was notified about it by a whistle blower who worked for UGI Penn Natural Gas.

UGI Penn Natural Gas is a subsidiary of Reading, Pa.-based UGI Utilities Inc., which is a subsidiary of Valley Forge, Pa.-based UGI (NYSE:UGI)

UGI Utilities earlier this year agreed to pay a $500,000 fine and speed up its plan to replace aging cast-iron pipes in response to a gas explosion that killed five people in Allentown, Pa., in February 2011.