Cascade Natural Gas in Kennewick has reached an agreement to pay $2.5 million to settle a complaint claiming that the company violated state and federal pipeline safety regulations.
In July, the state Utilities and Transportation Commission announced that Cascade could not provide required documentation for nearly 40 percent of its high-pressure pipelines in the state, prompting the commission to file a complaint.
Pipeline safety staff recommended the commission impose the maximum penalty of $4 million.
The settlement agreement would suspend $1.5 million of the penalty on the condition that the company completes a compliance program by set deadlines.
The program will require Cascade to validate the maximum allowable operating pressure for pipelines operating above 60 pounds-per-square-inch gauge, focusing on high-risk pipelines. It also will be required to submit a third-party audit evaluating the company’s pipeline safety management program.
“Cascade recognizes the importance of having accurate records and is committed to achieving compliance through the settlement agreement,” said Cascade spokesman Mark Hanson.
“We view the settlement agreement as a compromise of each side’s positions, but one that assures continued public safety and allows Cascade to achieve compliance,” he said.
Cascade has about 200,000 residential and business customers in Washington, including customers in Benton and Franklin counties and much of the rest of the Mid-Columbia.
The agreement, announced Thursday, still must be approved by the three-member Utilities and Transportation Commission.
The report released in July said Cascade had demonstrated “a lax attitude toward compliance that exposes the public to an unacceptable level of risk.”
Cascade allegedly failed to maintain records and documentation of the maximum allowable operating pressure for at least 116 pipeline segments, according to the commission.
Commission staff brought up a 2010 Pacific Gas & Electric explosion in San Bruno, Calif., that killed eight people, saying inadequate oversight can have catastrophic consequences.
An investigation into the California accident found that a contributing factor was the failure to maintain records to establish and confirm maximum allowable operating pressure.
Federal standards establish the highest pressure at which each segment of pipeline can safely operate and companies are require to maintain records to prove compliance. The federal government issued an advisory bulletin in May 2012 in response to the California accident, reminding pipeline operators to verify records related to maximum allowable operating pressure.