A northern Indiana utility is facing a $1.1 million fine, the largest in state history, after state regulators cited it for natural gas pipeline safety violations and specified that the company cannot pass that cost onto its ratepayers.
The Indiana Utility Regulatory Commission cited the Northern Indiana Public Service Co. for instances of failing to locate or mark underground pipelines within two days of a request being made, as is required by pipeline safety procedures in advance of any excavation work.
The commission, which released its decision last week, said the violations dating to 2018 posed a public safety threat.
“Properly responding to and locating pipelines is critical to avoiding property damage and personal injury potentially resulting from natural gas explosions,” the commission said in a news release.
The commission said in its order that the $1.1 million fine against Merrillville, Indiana-based NIPSCO is the largest in state history.
The utility is not allowed to pass that cost onto consumers as a rate hike, the commissioners wrote, so the fine will not result in higher electric or gas bills.
The commission’s latest judgment against the utility stems from a 2017 ruling that fined NIPSCO $900,000 in civil penalties for violations dating back to 2015. The utility had agreed to pay further fines if later caught for similar violations, the commission said. Regulators said NIPSCO was fined $765,000 in February 2019 for violations that occurred in 2017.
“Both the Commission’s Pipeline Safety Division and the utility agreed on the dollar amount for each violation NIPSCO commits in 2017, 2018, and 2019 with respect to locating its underground gas pipelines and facilities,” the commission said in a statement.
NISPCO spokeswoman Nichole DeMario said the utility has acknowledged the fine and pledged to correct issues around line locations. She said in a statement that NIPSCO’s goal is to ensure public safety while maintaining a safe natural gas system.
DeMario said the utility typically completes more than 450,000 requests to locate gas lines each year.
“The violation addresses 230, a very small number of instances in which NIPSCO failed to locate or provide an accurate locate for underground utilities when requested by someone doing excavation work,” she said.
NIPSCO is focused on addressing the “root cause” of the violation by using new pipeline safety management system, ensuring maps and records are up to date, more training and internal process improvements to address and identify underground lines, DeMario said.
She said the company cut damage to underground lines by 13%, while reducing the number of locating errors by nearly one-quarter from 2017 to 2019.
This article was first published in Insurance Journal.