PUC seeks $2,576,627 from UGI over 2023 Palmer Chocolate Factory gas explosion

UGI Utilities inc is facing a more than $2.5 million penalty from the Pennsylvania Public Utility Commission in the wake of a 2023 explosion that killed seven and people and injured 10 others at the R.M. Palmer Chocolate Factory in West Reading. 

 The complaint filed Wednesday alleges multiple violations of the Public Utility Code, commission regulations, and federal pipeline safety standards related to the design, operation, and oversight of UGI’s gas distribution facilities serving the factory. 

The explosion and resulting fire destroyed one Palmer factory building, severely damaged another, and destroyed a nearby apartment building, displacing several families. 

In addition to the seven workers killed in the blast, four individuals suffered serious injuries and six others were injured. The explosion caused approximately $42 million in property damage and prompted a large-scale emergency response involving 56 responding agencies, including fire and rescue units, law enforcement, emergency medical services, and search and rescue teams. 

The investigation determined that natural gas leaked from a retired plastic service tee connected to a vintage Aldyl-A plastic pipeline located beneath Cherry Street near the Palmer facility. Gas migrated underground and entered the factory building, where it was ignited by an unknown source. 

Investigators also identified significantly elevated ground temperatures in the area caused by steam escaping from a corroded underground steam pipe belonging to the Palmer facility that was located near UGI’s pipeline infrastructure. 

 The PUC is seeking $2,576,627 in civil penalties — the maximum amount permitted by law — along with a series of corrective actions aimed at strengthening pipeline safety oversight, addressing risks associated with aging plastic pipeline materials, and expanding advanced methane leak detection technologies. 

 Among the key corrective actions proposed in the complaint, I&E calls for UGI to expand the deployment of smart remote methane detection systems, capable of identifying natural gas leaks and alerting operators or emergency officials through modern communications networks. 

It is also calling on UGI to establish new procedures for retiring aging Aldyl-A plastic service tees with Delrin inserts, which have been linked to failures in vintage plastic pipeline systems. 

Other measures include an increase in leak survey frequency for older plastic pipelines, particularly in dense urban areas where underground leaks may quickly become hazardous. 

The utility is also being called on to improve tracking, mapping, and risk analysis of vintage plastic pipeline assets installed prior to 1983 and strengthen emergency response coordination procedures and integrity management programs designed to identify and mitigate risks affecting pipeline infrastructure. 

 The complaint alleges 27 violations of state and federal safety regulations governing natural gas distribution systems.  

UGI said in a statement that it is carefully reviewing the formal complaint issued by the PUC regarding the explosion. 

 “What occurred at R.M. Palmer was a heartbreaking tragedy, and our deepest sympathies remain with the victims’ families, the West Reading community, and all those affected,” the statement said.  

 As UGI reviews the complaint, the Company will continue to cooperate with the PUC’s investigation. 

The I&E complaint will be reviewed through the PUC’s formal adjudicatory process before the Commission’s Office of Administrative Law Judge. UGI will have an opportunity to respond to the allegations before the Commission determines whether violations occurred and what penalties or corrective actions may ultimately be imposed.