$21M Settlement Reached with National Grid


Last month, New York Gov. Andrew M. Cuomo announced that a $21 million settlement had been reached regarding two New York City gas distribution companies owned by National Grid, a multinational electricity and gas utility company with roughly 1.8 million residential and commercial customers within the metropolitan area.

According to the Governor’s press release, National Grid had failed to properly maintain protections for its underground natural gas distribution system and inadequately supervised workers and contractors working on the gas lines.

"New York has zero tolerance for violations of its gas safety standards that are designed to protect people and property, and will continue to impose tougher, more significant penalties for violations," Cuomo said. "Today's settlement is a major victory for New Yorkers and puts utilities on notice - the State will continue to hold utilities accountable when they do not comply with our safety rules and blatantly put lives at risk."

What Happened

During an investigation conducted by the State Public Service Commission, officials were reported to have identified inadequate cathodic protection levels on pipes at National Grid's Northport Regulator Station, in addition to other regulator stations along Long Island.

While National Grid reports that it was in the process of correcting the cathodic protection issues at Northport, when investigators visited the Commack Regulator Station, they found the same problem. In this industry, it is required to have proper cathodic protection as to prevent corrosion on steel pipes. If and when corrosion does occur, it risks the integrity of the pipe and in worst case scenarios, could result in catastrophic failure.

Over the course of the investigation, officials conducted a review of operations and maintenance records associated with delivery points for the Iroquois Pipeline system at the Northport Regulator Station, the Commack Regulator Station, and one, specifically identified pipeline segment, found that underground control lines and a pipeline segment, subject to specific cathodic protection requirements, did not demonstrate adequate or compliant cathodic protection levels.

In a sperate investigation, officials were also able to determine that National Grid had failed to comply with the Commission's gas safety rules related to gas infrastructure work in their service territories. It was through this additional investigation that the Commission concluded that National Grid failed to inspect work completed by its contractors during construction at sufficient intervals to ensure compliance, and that it allowed work to be completed by plastic fusers and plastic fusion inspectors who were not properly qualified to do the work.

Public Service Commission Chair John B. Howard said, "As a result of these Commission-led gas safety investigations, we will ensure that our gas utilities will focus efforts on ensuring that the gas distribution system is safe and reliable, and utilities that fail to do that will pay a steep financial price."

The Settlement

The $21 million settlement was approved by the State Public Service Commission with National Grid's New York City and Long Island gas businesses for repeated violations of gas safety regulations that are designed to ensure that underground gas pipelines are protected from corrosion.

The actions taken were made possible by reforms to the Public Service Law put in place by Cuomo in 2013, which strengthened the Commission's enforcement mechanisms to ensure that major electric and gas utility companies are held accountable first and foremost for ensuring the safety of New Yorkers before utility failures cause any damage.

According to Cuomo, the settlement money will be used as a credit to offset the costs of National Grid's Commission-approved energy efficiency and demand response programs. Use of the funds will be subject to separate approval by the Commission in National Grid's currently pending rate cases, or in other future proceedings.


Tagged categories: Cathodic protection; Corrosion; Corrosion protection; Government; Health & Safety; Health and safety; NA; North America; Oil and Gas; Program/Project Management; Quality Control; Safety

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