Arizona Regulators Impose $2 Million Fine on Natural Gas Utility

PHOENIX (AP) — Southwest Gas, a natural gas utility serving over 2 million customers in Arizona, Nevada, and parts of California, has been fined $2 million by Arizona regulators due to concerns regarding defective piping known to degrade in high temperatures.

The Arizona Corporation Commission disclosed on Friday that they reached a consent agreement with Southwest Gas, which involves not only the civil penalty but also mandates additional inspections of the gas pipeline system.

The specific issue revolves around piping materials referred to as Driscopipe polyethylene (PE) M7000 and M8000. These materials have been flagged by federal regulators since a 2012 advisory, which stated that they may be prone to degradation, especially in hot environments. Instances of degradation and subsequent leaks have been reported primarily within the deserts of the Southwest, encompassing parts of Arizona, California, and Nevada.

In Arizona, a state investigation revealed that Southwest Gas did not adequately map the locations where this compromised piping was installed. The utility estimates that more than 10,000 miles (16,100 kilometers) of this piping are currently used across Arizona, and they have developed a plan to target high-risk areas for either replacement or abandonment.

This regulatory action stems from two notable incidents in 2021, including a serious explosion in Chandler that resulted in injuries to four individuals. As part of the agreement, Southwest Gas has committed to replace or abandon all newly discovered and previously unmapped sections that contain the defective piping. Additionally, the company must report any leaks to the regulators.

An amendment to the agreement proposed by Corporation Commissioner Kevin Thompson clarified that if Southwest Gas wishes to pass on any costs related to this agreement to customers, they would need to propose new rates and obtain regulatory approval first. Thompson commented on the settlement, emphasizing the importance of public safety and accountability for the utility. He expressed that customers should not have to bear the financial burden for mistakes made by the manufacturer or the defective piping.

Furthermore, Southwest Gas has agreed to enhance leak patrols throughout the year to ensure safety and compliance with regulations.

Arizona, Gas, Regulation