Arizona regulators fine natural gas utility $2 million over defective piping

PHOENIX — A natural gas company with more than 2 million customers in Arizona, Nevada and parts of California is being fined $2 million by Arizona regulators over concerns about pipes known to break due to heat.

The Arizona Corporation Commission announced Friday that it has reached a consent agreement with Southwest Gas that includes the civil penalty and requires more inspections.

This concerns pipes that can deteriorate in locations with high ambient temperatures. Federal regulators issued an opinion in 2012 warned operators that the pipes – known as Driscopipe polyethylene (PE) M7000 and M8000 – could be susceptible to degradation.

Degradation and resulting leaks were reported to involve pipes installed in the Southwest, specifically in the Mohave Desert region of Arizona, California and Nevada.

In Arizona, state investigators concluded that Southwest Gas failed to properly map where these types of pipes were installed.

Southwest Gas estimates there are more than 10,000 miles of pipes throughout Arizona. The utility says it has a plan to target areas at high risk for replacement or shutdown.

The agreement between state regulators and Southwest Gas stems from two separate incidents in 2021, including one in Chandler in which an explosion injured four people.

In addition to replacing or abandoning any newly discovered and previously unmapped areas of defective pipes, Southwest Gas must also notify regulators of any leaks.

An amendment to the agreement proposed by Corporate Commissioner Kevin Thompson made clear that the company would have to propose new rates – and obtain regulatory approval through an administrative process – if it were to cover costs associated with fulfilling the agreement customers want to recoup. .

“This matter has been before the commission long enough and the approval of this settlement is a major step toward maintaining public safety and holding the utility accountable,” Thompson said. “I do not believe that customers should bear full responsibility for manufacturer mistakes and their defective products, and I wish the utility had pursued this path more aggressively when they had the chance.”

Southwest Gas also agreed to increase leak patrols year-round.