SW Gas to pay $2 million in penalties, improve gas line safety after explosion

CHANDLER, AZ — Southwest Gas has agreed to pay a $2 million fine and make safety improvements to settle allegations of utility regulations violations after two major gas leaks in 2021.

One of the leaks led to an explosion at a Chandler strip mall that seriously injured four men. The other leak, in Scottsdale, led to evacuations of nearby homes.

In both cases, the leaks were due to heat degradation of Driscopipe 8000 gas lines, which were not properly mapped in the Southwest Gas system.

For years, Driscopipe 8000 was known to have the potential to become brittle and crack in hot desert environments. The company's website said premature degradationmay occur only when several conditions were involved including the pipe had gas inside, but it was not flowing. The company’s examples included “inactive services” that have been disconnected from a customer for years or a “stub” pipe never extended to a customer.

After a similar 2014 explosion, Southwest Gas had agreed to conduct more frequent leak patrols and expedite the removal of certain sections of the Driscopipe 8000 lines. Those safety precautions did not occur in the areas of the 2021 Chandler and Scottsdale leaks due to the mapping problems discovered in a subsequent investigation.

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The new consent agreement between Southwest Gas and the Arizona Corporation Commission is dated October 30, and it is subject to final approval by the commissioners.

Southwest Gas agrees to pay $2 million to the Slate General Fund as a civil penalty, which shall not be recoverable in rates.

In addition, the agreement includes enhanced safety inspections and remediation including:

In the consent agreement, Southwest Gas does not admit nor deny any safety violations. The utility has previously settled a lawsuit by victims of the Chandler shopping center explosion.

Southwest Gas issued the following statement regarding the agreement:

"Southwest Gas worked closely with the Arizona Corporation Commission’s Office of Pipeline Safety during its investigation of the incidents in Scottsdale and Chandler to identify root causes and opportunities to enhance the safety, service, and reliability of our infrastructure in the State of Arizona. The Consent Agreement is the result of these efforts and ensures the insights gained from this process lead to positive change reflective of Southwest Gas’ continued commitment to safely deliver natural gas service for our customers and the communities we serve."

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