PGW would pay $400,000 to the PUC and $100,000 to a Philadelphia Fire Department program that provides free smoke alarms and fire-safety education.
In urging Judge Jones to accept the settlement, the PUC's prosecutors emphatically noted the financial settlement "HAS THE REAL POTENTIAL TO SAVE LIVES."
PGW did not admit to any wrongdoing in a statement signed by PGW attorney Howard Lebofsky and Daniel Clearfield of Eckert Seamans Cherin & Mellott.
"PGW has substantial factual and legal defenses to each of the claimed violations of law," the attorneys said.
But the lawyers wrote that the utility recognizes "that all aspects of its operations, including gas safety, can be enhanced and that it sometimes takes difficult events to identify those areas and the way in which its procedures can be improved or clarified."
The complaint by PUC investigators, which was filed last December, alleged the utility failed to properly follow procedures in connection with the explosion on Jan. 18, 2011, which injured five other PGW employees and destroyed a rowhouse that contained a chiropractic clinic and two apartments. The blast flattened cars, shattered windows for blocks, and burned for two hours before being brought under control.
The PUC's enforcement bureau alleged that PGW "failed to take required steps to minimize the danger of accidental ignition of gas" after its workers responded to a reported gas leak in the 6900 block of Torresdale Avenue.
The complaint also said that PGW failed to shut off gas mains and electricity to the neighborhood in violation of its own policies. Fire investigators said the blast was triggered when built-up gas was sparked by the electronic pilot light of a furnace.
In its formal response in February, PGW asserted that its actions before and after the blast "were legally justified and in full accordance" with regulations.
Contrary to investigators' stinging rebuke, PGW said its training, response, and procedures were in compliance.
Regulators also cited PGW for only giving drug and alcohol tests to three of 38 employees who responded to the incident. PGW said only 18 employees were on the scene at the time of the explosion and it "tested all personnel who were available to be tested, who were in charge of the leak investigation, could have caused the accident, or contributed to the accident."
One of the utility's key defenses was that the agency had reviewed PGW's procedures in recent years "and never questioned" the utility on the quality of the procedures, on their completeness or for noncompliance.
PGW would not be allowed to recover the penalties by increasing rates. But the payment would effectively reduce the equity of PGW's owners - city taxpayers - at a time when Mayor Nutter is exploring a possible sale of the utility to private investors.
The proposed settlement is posted on the PUC's website: www.puc.pa.gov//pcdocs/1199455.pdf.
Contact Andrew Maykuth at 215-854-2947, @Maykuth on Twitter or firstname.lastname@example.org.