PHOENIX — A natural gas utility serving over 2 million customers in Arizona, Nevada, and parts of California has been penalized with a $2 million fine by Arizona regulators due to issues concerning piping that is prone to deterioration in high temperatures.
The Arizona Corporation Commission made the announcement on Friday, revealing that they have come to a consent agreement with Southwest Gas, which includes the financial penalty along with an obligation for increased inspections.
The primary concern revolves around piping that is vulnerable to degradation in areas with elevated ambient temperatures. In 2012, federal regulators issued a notice to operators warning them that the piping, identified as Driscopipe polyethylene (PE) M7000 and M8000, may exhibit susceptibility to degradation.
Reports indicate that issues related to degradation and subsequent leaks have occurred with piping installations in the Southwest, especially in the Mohave Desert region that spans Arizona, California, and Nevada.
In Arizona, state investigations found that Southwest Gas did not accurately map the locations of this type of piping. The utility estimates that there are over 10,000 miles (approximately 16,100 kilometers) of this piping network within the state. They have formulated a strategy to focus on high-risk areas for either replacement or abandonment of these pipes.
The agreement between regulators and Southwest Gas is the result of two incidents in 2021, one of which occurred in Chandler and resulted in an explosion that injured four individuals. As part of the resolution, the company is mandated to replace or abandon any newly discovered or previously unmapped sections of the existing defective piping while also being required to inform regulators of any leaks that may occur.
Additionally, Corporation Commissioner Kevin Thompson introduced an amendment to the agreement, stipulating that should Southwest Gas wish to recover any costs related to this agreement from customers, they must propose new rates and gain regulatory approval through an administrative process.
Thompson expressed that the lengthy consideration of this issue by the commission needs closure, affirming that the settlement helps enhance public safety and holds the utility responsible. He remarked, “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.”
Furthermore, Southwest Gas has committed to boosting leak patrols throughout the year, reinforcing their dedication to mitigating the risks associated with the faulty piping.