Kentucky Utility Fined $395,000 for 2014 Gas Line Rupture

The Kentucky Public Service Commission (PSC) has fined Louisville Gas and Electric Co. (LG&E) $395,000 for a series of violations that led to the September 2014 rupture of a high-pressure natural gas pipeline in Goshen, Oldham County.

The penalty is the largest ever assessed by the PSC in a natural gas safety case.

The fact that the accident occurred in close proximity to homes, a school, and businesses – what is known as a “high consequence area” – was a factor in determining the amount of the penalties.

According to the PSC, the pipeline ruptured because a mechanical coupling between two sections of pipe had not been installed properly. The coupling, which was installed in 1998, failed when the 12-inch line was being excavated for modifications.

Investigations into the accident by LG&E and the PSC found that the coupling had not been installed in accordance with LG&E’s own requirements and could not withstand the pressures at which the line was operated.

Specifically, the principal factors leading to the failure were:

• There were not enough bolt assemblies securing the two halves of coupling.
• The brackets for the bolts were not properly welded to the pipe segments.
• The steel used in the brackets was too weak.
• The bolt assemblies lacked washers.
• The bolt assembles were not properly positioned on the pipe segments.

According to LG&E, there are about 1,350 mechanical couplings on high-pressure distribution lines, and no more such couplings on high-pressure lines will be installed. The company is also committed to removing existing couplings and the use of mechanical couplings in other circumstances will be limited and closely monitored.

In determining the penalty, the PSC found that the maximum amount LG&E could be fined was $1.5 million. The penalties are set by federal natural gas safety regulations, which are enforced in Kentucky by the PSC for any entity operating a gas distribution system.

The PSC found that LG&E committed six violations, with the most serious the three associated with the improper installation of the coupling on the 12-inch pipeline. The PSC also found violations stemming from problems with the second coupling, which was on an 8-inch pipeline; from the failure to inspect the welds on the 12-inch pipeline; and from operating the 12-inch pipeline at higher pressures than permitted with the faulty coupling in place.

Each of the three most serious violations warrant a penalty of $100,000, with the other three violations earning penalties of $30,000, $50,000, and $15,000, respectively.

Under the terms of the order, through 2022, LG&E must annually report on its progress in implementing its plan to address safety issues with mechanical couplings, including the progress made in removing and replacing them in its system.