UGI Utilities Inc. must pay the state a $750,000 penalty to settle a case rooted in a Christmas 2020 natural gas eruption that flipped a moving SUV and killed a passenger in Monroe County.
The state Public Utility Commission voted 5-0 to approve the settlement between UGI and the commission’s Bureau of Investigation and Enforcement at its meeting Wednesday.
The bureau originally sought a $1.6 million penalty.
Why the SUV flipped
The SUV was upended as Luis Mercado, of Floral Park, New York, drove west on Route 314 in Pocono Township about 1:30 a.m.
His fiancée, Ana Abreu, their baby son, Lucas Mercado, and another man, Jobanni Peralta, were passengers, according to lawsuits Mercado and Peralta filed against UGI and three other companies.
Suddenly, high-pressure natural gas leaking from an underground pipe erupted through the road, according to PUC and court documents. As the SUV traveled over the eruption, the gas shot upward with enough force to flip the SUV into the air, according to a PUC document. No gas exploded.
The SUV landed on a road shoulder, its roof crushed. Luis Mercado helped Peralta get free of his seat belt and Peralta kicked out a window to escape, according to their suit. A police officer helped Mercado escape and both cut the straps of a car seat that hung upside down and held Lucas Mercado.
Abreu, 33, trapped between the seat and roof, had trouble breathing, but was alert and responsive at first. Firefighters arrived and helped pull her out.
Ambulances took the four to Lehigh Valley Pocono Hospital where Luis and Lucas Mercado were treated and released. Peralta was transferred to Lehigh Valley Allentown and survived. Abreu, 33, died at the hospital, according to the lawsuit.
The eruption required the temporary evacuation of two homes and cut gas service to an unspecified number of customers in the middle of winter, according to a Dec. 19, 2023, PUC investigative complaint against UGI.
The eruption's criminal investigation
The county district attorney’s office found no criminal negligence, but the 2023 PUC complaint says the eruption occurred because UGI’s contractor, Leeward Construction of Honesdale, improperly fused two, foot-wide plastic pipes on Aug. 22, 2019. That led to a leak that worsened over time because of underground soil conditions, according to the report.
At the time, Leeward was installing high-density plastic natural gas pipes to serve the Great Wolf Lodge resort and so the Monroe County Transit Authority could fuel natural gas-powered buses.
The eruption blew a 6-foot wide, 8-foot long, 4-foot-deep void in the road.
About 975,000 cubic feet of gas were released into the air and the damage and initial emergency response cost $60,000, according to the PUC.
What the PUC found wrong
PUC investigators reported finding six joints with incorrectly fused pipes just by looking at them. They also found “the pipeline was in a near-failure condition for some time prior to the incident” and that and a combination of soil factors around the pipe produced the leak that led to the eruption.
The investigators also found UGI:
- Lacked procedures to record the maintenance of equipment used to fuse pipes.
- Used the wrong machine to fuse pipes based on the company’s fusion procedures.
- Used miter joints — pipes cut and joined at angles — which are forbidden under federal standards.
- Failed to properly inspect fused pipes.
- Lacked proper procedures and specific training for fusing pipes with specific equipment under gas pressure.
- Used outdated construction standards to fuse pipes.
PUC investigators alleged all that violated state law and federal regulations for installing natural gas pipes.
What UGI said about it
UGI said its piping system for the project complied with federal regulations and contractors received “appropriate training," that its contractor used an alternative fusion procedure “proven by test or experience to produce strong gas-tight joints,” and that miter joints used were unintentional and did not cause the leak.
What else UGI has to do
Under the rest of the settlement, first reached last July, the company must also, among other things:
- Replace about 15,000 feet of foot-wide pipe already installed during the project.
- Adopt updated fusion procedures and keep updating them.
- Require contractors to show they know how to properly fuse pipes before beginning a job by producing samples.
- “Destructively” test a contractor’s demonstration samples.
- Continue to maintain a staff that knows how to test the quality of pipe installations.
- Implement all the changes within two years and regularly keep the PUC updated.
- Cannot deduct the penalty on tax returns or seek reimbursement for it in future rate hike requests.
The injured filed suits
In December 2022, Mercado, as administrator of Abreu’s estate, and Peralta filed suits in Lackawanna County Common Pleas Court against UGI, Leeward, Quality Integrated Services, of Guymon, Oklahoma, and Charter Plastics.
Quality Integrated inspected the pipes; Charter Plastics supplied them.
In its response to the suits, UGI says the utility never did any of the work so it shouldn’t have to pay damages.
Those suits are still pending.
