(The following press release from the Kentucky Public Service Commission
was received by e-mail. The sender verified the statement.)
LG&E to Pay $125,000 Fine in Natural Gas Safety Case
Problems found during investigation of December 2011 explosion in Louisville
FRANKFORT, Ky. (Feb. 5, 2013) - Louisville Gas & Electric Co. (LG&E) will pay a
$125,000 penalty to the Kentucky Public Service Commission (PSC) in settlement
of alleged safety violations that were uncovered during the PSC's investigation
of a Dec. 6, 2011 natural gas explosion that destroyed a house in southern
Another $125,000 in penalties is suspended pending LG&E's completion of several
requirements set forth in a settlement agreement approved today by the PSC.
Both the $125,000 payment and the $250,000 total penalty are the largest ever
assessed by the PSC in a safety case. The maximum possible fine in this case
In an order issued today, the PSC noted that LG&E has since taken a number of
steps to improve training and emergency response. The PSC also noted that the
settlement requires LG&E to make changes in how it maintains proper operating
pressures in its natural gas distribution system.
The settlement was reached through negotiations between LG&E and PSC staff.
The explosion destroyed a house at 5206 River Trail Place and damaged several
nearby properties. The explosion and fire resulted in no serious injuries to
residents; however, a dog in the home was killed.
Fire investigators determined that a high-pressure leak in a water line cut a
hole in a plastic gas main, allowing gas to work its way into nearby homes. The
cause of the leak in the water line has not been determined.
The explosion occurred at about 7 a.m., 2½ hours after the first LG&E worker
arrived at the scene to investigate a report of a possible gas leak in the
neighborhood. Following the explosion, LG&E workers checked three nearby houses
and evacuated those homes when gas was detected.
A fourth home, where the three residents of the destroyed house had taken
refuge, was not checked. That house was evacuated two hours later, when
firefighters tested it and found gas inside.
In reviewing LG&E's initial response to the odor complaint, PSC investigators
determined that the first company worker at the scene did not take the
necessary steps - including properly checking for gas in sewers - to determine
how far the gas had migrated and to establish a safe perimeter around the leak.
Subsequent review of LG&E records determined that the company had allowed
pressure in the neighborhood's gas system to slightly exceed allowable levels
on a regular basis.
The PSC alleged that LG&E violated four pipeline safety regulations:
·Not following proper safety procedures during an emergency response.
·Failing to minimize the danger of a gas explosion by not checking for gas
levels in all nearby homes and eliminating all possible ignition sources.
·Operating a gas system in excess of the established maximum allowable
·Not taking the required corrective actions when abnormal pressure levels are
Each of the alleged violations is tied to a specific provision in federal
pipeline safety regulations. The PSC, under certification by the federal
Pipeline and Hazardous Materials Safety Administration, enforces those
regulations for natural gas distribution companies in Kentucky.
The PSC's responsibility is to determine whether any safety regulations have
been violated and to see that those violations are corrected. Therefore, the
investigation made no findings as to whether the alleged violations in this
case caused or contributed to the explosion.
Measures that LG&E is required to take under the settlement agreement include:
·Providing additional and enhanced training for its employees who respond to
reports of gas leaks.
·Strengthening protocols for the response to leak reports.
·Improving its gas training facility to allow a greater variety of emergency
·Conducting surprise drills for field response personnel, with PSC natural gas
safety investigators in attendance.
·Making sure that operating pressure of its natural gas distribution system
does not exceed maximum allowable levels under normal operating conditions.
LG&E is required to provide the PSC with documents showing that it has
implemented all of the corrective measures.
Before today, the largest penalty ever paid in a natural gas safety case was
$100,000. That amount was assessed in 1981 against Union Light Heat & Power Co.
(now Duke Energy Kentucky) for violations connected to two Oct. 9, 1980,
explosions that leveled a portion of Simon Kenton High School in northern
Kentucky, killing one person and injuring 37.
When adjusted for inflation, the 1981 penalty would come to about $250,000 in
today's dollars. The maximum penalty per violation per day in 1981 was $1,000,
with the maximum penalty for a series of related violations set at $200,000.
At the time of the 2011 LG&E explosion, the maximum penalty per violation per
day was $25,000, with an aggregate maximum of $500,000 for related violations.
Last year, the maximum penalties were increased to $100,000 per day, with a
total maximum of $1 million for a series of related violations.
Today's order and documents in the case are available on the PSC website,
psc.ky.gov. The case number is 2012-00239.
The PSC is an independent agency attached for administrative purposes to the
Energy and Environment Cabinet. It regulates more than 1,500 gas, water, sewer,
electric and telecommunication utilities operating in Kentucky and has
approximately 90 employees.
Director of Communications
Kentucky Public Service Commission
211 Sower Boulevard
Frankfort, KY 40601
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