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Springs Utilities escapes possible $2.7 million fine 

Records blunder

click to enlarge Gas lines lacking maintenance can explode, like this one did in 2010 in San Bruno, California. - COURTESY KRON 4 VIEWERS, VIA FLICKR.COM
  • Courtesy KRON 4 Viewers, via Flickr.com
  • Gas lines lacking maintenance can explode, like this one did in 2010 in San Bruno, California.

It was just a records problem, according to Colorado Springs Utilities' CEO Aram Benyamin. But the enterprise's failure to keep tabs on corrosion inspections of the city's natural gas lines nearly cost Utilities $1 million in fines, according to documents obtained by the Independent.

Benyamin says the missteps posed no danger to the community, and Utilities has persuaded the Colorado Public Utilities Commission to back away from assessing any monetary penalty, which stemmed from a 2017-2018 audit that found documentation problems for hundreds of sites in the city's natural gas system.

"We own up to the issue of documentation we've not properly done," Benyamin says. "We own up on the understanding of what the repair cycles should be, but at no given time was the system in danger. That is the finding of the PUC, and that's why they went to zero fine for us."

However, the PUC told Utilities in a Dec. 22, 2017, letter that "areas of noncompliance that could lead to an imminent hazard to the public or property should be repaired immediately."

Utilities now will spend at least $166,000 on a consultant this year to set up a system that enables officials to properly monitor gas-line corrosion in compliance with federal regulations for transporting natural gas. An update on CSU's progress is due to PUC in January.

At issue are rules that require gas utilities to monitor buried lines for corrosion once a year (no more than 15 months may elapse between inspections) and document those inspections and findings.

After the PUC's Pipeline Safety Program audited Utilities' inspection system from August 2017 to March 2018, it issued a seven-page "notice of probable violation."

In the April 18 letter, the PUC noted the inspection revealed that 341 test points were identified that hadn't been tested within the allowed interval of time. Another 333 test points also were found to be problematic in terms of lacking "prompt remedial action."

Joe Molloy, PUC pipeline program chief, noted in the letter that the audit uncovered "substantial" problems.

"Specifically," he wrote, "there was no documentation whatsoever regarding CSU's bare steel assets and the [federal] requirements. Bare steel has been identified by the natural gas distribution industry as a poorly performing material and unknown integrity and public safety risk."

Moreover, Molloy noted that data acquisition, management and integration issues went beyond just the corrosion control program to affect Utilities' overall compliance with federal regulations regarding transportation of natural gas.

But he also credited Utilities with being "responsive" to past pipeline safety audits. While total fines based on the number of problems and per-day penalties totaled $2.7 million, the statutory limit is $1 million. The PUC reduced the fine to $50,000, citing Utilities' mitigation plan, then suspended the $50,000 fine after Utilities asked to apply that sum to the cost of hiring a consultant to analyze compliance with pipeline safety regulations.

Asked about that, Benyamin downplayed the audit and the proposed penalty, saying, "The fine was zero."

"We were on top of the repairs," he adds. "The recording-keeping was a big issue, which we're fixing. I'm not going to say we're all there. We still have a lot room to improve, but we will get there. We want to be sure when the inspections are done, the findings are recorded and the actions are recorded and all these things come together on the dashboard, so everybody knows exactly who did what."

Utilities spokesperson Amy Trinidad says via email that Utilities hired Structural Integrity Associates of Englewood, which will conduct a "strengths, weakness, opportunities and threats analysis" of the city's natural gas processes and procedures. Utilities expects to be billed $166,411 by the end of 2018, she says.

Benyamin also noted that Eric Tharp, another Utilities executive who served as interim CEO before Benyamin took over Oct. 2, also kept the Utilities Board informed of the PUC audit.

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