Corporation Commission Issues Southwest Gas $2 Million Penalty For Gas Leak And Explosion
By Matthew Holloway |
In a post-Election Day vote on Nov. 6th, the Arizona Corporation Commission (ACC) voted unanimously to approve a Consent Agreement between Southwest Gas Corporation (SWG) and the Arizona Corporation Commission Office of Pipeline Safety (AZOPS). The Commission slammed SWG with a $2,000,000 civil penalty stemming from two incidents in 2021 in Chandler and Scottsdale caused by degradation in pipelines, leaks, and explosions. The incident in Chandler saw an explosion that injured four people.
As reported by 12News, the explosion on August 26, 2021 that drew the attention of the ACC occurred near Ray and Rural Roads at a Chandler business and injured four people. The blast caused a complete structural failure of the building’s roof which subsequently collapsed and caused the evacuation of nearby homes. The explosion caused damage in excess of $5 million the outlet reported, citing public records.
In a press release, the ACC explained that it voted on Wednesday to impose a Consent Agreement between Southwest Gas Corporation (SWG) and the ACC, which proposes a resolution to the issues related to the Scottsdale and Chandler incidents.
The ACC explained its findings stating:
“AZOPS investigators concluded that pipe purchased by Southwest Gas degraded in high heat areas, leading to leaks, and possible explosions. The investigators further concluded that Southwest Gas failed to properly map where this type of pipe, referred to as Driscopipe polyethylene (PE) M7000 and M8000, was located and needed to increase leak patrols. The mapping errors lead to an incorrect understanding of where the potentially failing piping is located. Maintaining accurate records is mandated by law.
Southwest Gas accepted responsibility and agreed to pay $2,000,000 to the Commission as a civil penalty. As part of the agreement, Southwest Gas also must plan to replace or abandon all services with no active meter sets or stubs identified underground that contains the defective piping material. Southwest Gas estimates there are more than 10,000 miles of M7000 and M8000 pipe installed throughout Arizona.”
Commissioner Kevin Thompson added an amendment that was approved as well that the Consent Agreement is not the final word on the matter “making it clear that enactment of the settlement does not constitute an approval or authorization by the Commission for recovering the costs of pipe replacement or costs associated with fulfilling the terms of the settlement in any upcoming rate case,” according to the release.
He said in a statement, “This matter has been before the Commission long enough and the approval of this settlement is a big step in the direction of maintaining public safety and holding the utility accountable.” He added, “I don’t believe customers should bear the entire responsibility for the mistakes of the manufacturer and their defective products, and I wish the utility would have pursued this path more aggressively when they had the chance.”
Speaking with Fox10 Phoenix, Tom Ryan, trial attorney for the explosion victims, Platinum Printing and the Ryan brothers, said, “It was a shock—a complete devastation. Metal was bent, doors were sent flying 200 feet. It was just an incredible, shocking sight. And I’m still amazed today—that as badly as they were burned—that he lived to tell about it.”
Southwest Gas has not sought legal action against the pipe manufacturer for defective product liability as of this report.
Fox10 reported that the new piping mandated under the Consent Agreement could impact thousands of businesses and homes across the Phoenix Metro area and will total in nearly 1,000 miles of replacement piping.
In a statement issued to AZFamily, a Southwest Gas spokesman wrote, “Southwest Gas worked closely with the Arizona Corporation Commission’s Office of Pipeline Safety during its investigation of the incidents in Scottsdale and Chandler to identify root causes and opportunities to enhance the safety, service, and reliability of our infrastructure in the State of Arizona. The Consent Agreement is the result of these efforts and ensures the insights gained from this process lead to positive change reflective of Southwest Gas’ continued commitment to safely deliver natural gas service for our customers and the communities we serve.”
Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
