Arizona Regulators Penalize Natural Gas Company $2M Over Defective Piping Linked to Explosions

Southwest Gas must also increase inspections to prevent future leaks and hazards.

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Oil pipes remain in storage on April 24, 2020 near Odessa, Texas. - Oil and gas is one of the main economic drivers of this area, and the industry has taken a hit after the price of oil dropped below zero earlier this week due to decline in demand from the novel coronavirus pandemic and a price war between Russia and Saudi Arabia. PAUL RATJE/AFP via Getty Images

The utility regulator of Arizona has moved to penalize a natural gas company over defective piping vulnerable to heat, considering the hot weather in the state.

The company, Southwest Gas, will be paying the Arizona Corporation Commission $2 million. Besides Arizona, there were also unsafe pipes installed in other parts of California where Southwest Gas serves more than 2 million customers.

Faulty Piping in Southwest Gas

AP News shared that the faulty piping was known as Driscopipe polyethylene (PE) M7000 and M8000 and has been a concern since 2012. At that time, regulators already warned that it could degrade in high templates, particularly in areas with extreme heat such as the Southwest and the Mohave Desert.

More than that, these faulty pipes are also prone to wear, which means increasing risks of gas leaks. The company, unfortunately, did not properly identify the said pipes, putting nearby communities at risk from gas leaks and explosions.

To address the issue, 12 News reported that Southwest Gas has now employed strategies to inspect, replace, and abandon sections of the defective piping if it's in the high-risk zones. Currently, there are an estimated 10,00 miles of this piping across Arizona but the utility regulator aims to target the most vulnerable areas first.

Southwest Gas will be mandated to report any leaks, to avoid the same incidents in 2021 that injured 4 people.

Now, besides the $2 million penalty, Southwest Gas and the regulator reached an agreement to expand its leak patrols so it can detect potential hazards early. To further ensure safe operations and customers won't have to shoulder fees, any rate hikes to cover the costs of replacing these pipes would also require regulatory approval.

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