The program, overseen by the Colorado Public Utilities Commission and Department of Regulatory Agencies, ignored issuing written compliance actions that would have administered safety enforcement on over 5,000 instances of operator “noncompliance” that occurred from 2017-2022.
BELLINGHAM, Washington [June 20, 2023] – In a full audit report published Monday June 12, the Colorado Office of the State Auditor discovered a plethora of major issues with the state’s Gas Pipeline Safety Program. Upon extensive review, the auditor found the Program failed to meet state and federal standards; including lack of proper training for its inspectors, refusal to enforce safety requirements, and failure to assess financial penalties for egregious violations of safety standards. The Program even allowed operators to be inspected by former operator employees promptly after being hired—an obvious conflict of interest.
From 2017 to 2022, the Program chose against updating penalty amounts and collected fines from just four of its 23 assessed penalties (17%). This amounted to a measly collected sum of $208,530 when it could have collected up to $10.9 million. The Program also refused to issue written compliance actions that would have enforced safety requirements for 94% of instances of noncompliance identified in the same period.
Even incidents resulting in death or injury did not warrant enforcement action by the Colorado PUC. Home explosions killing two people, dozens of incidents causing injuries, and millions of dollars of property damage earned no more than a verbal warning.
“Failure by the Colorado PUC to update penalty amounts required by both Colorado state and federal regulations allowed operators to walk away scot-free,” Pipeline Safety Trust Executive Director Bill Caram said. “No amount of money can bring back a life or truly repair the disastrous environmental damage that can be caused by pipeline incidents; but we need to hold operators fiscally responsible to influence behavior change. Operators have no incentive to change their ways with weak penalties such as those brought by the Colorado PUC.”
The audit also uncovered that operators got away with failing to report 54 natural gas safety accidents to the Program. The Colorado PUC, unaware that the accidents ever occurred, never investigated or penalized operators for these incidents. The auditor only learned about the incidents by browsing news media reports or digging through federal records.
Over the course of 2019 to 2022, the Program knowingly misrepresented critical data to the federal pipeline regulator, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), by reporting inaccurate numbers of gas pipeline incidents and compliance actions issued to those operators.
PHMSA is tasked with the duty to review state inspection programs and does so on a yearly basis, so how did it not uncover years of inaccurate reporting and other glaring issues with Colorado’s Gas Pipeline Safety Program?
“This audit demonstrates that PHMSA’s funding to states to administer state inspection programs should be based on meeting performance standards if it truly intends to keep the public safe,” Caram said. “These findings also present a true violation of public trust in the ability of both state and federal regulators to implement programs that keep the public safe and hold operators accountable for wrongdoing.”
The Colorado Office of the State Auditor completed the performance audit after receiving a legislative request that expressed “concerns regarding the Program’s investigations and enforcement activities.” The complete audit offers 12 recommendations to the PUC and Department of Agencies on how to improve.
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About Pipeline Safety Trust: The Pipeline Safety Trust is a nonprofit public watchdog promoting pipeline safety through education and advocacy by increasing access to information, and by building partnerships with residents, safety advocates, government and industry, that result in safer communities and a healthier environment.
For More Information Contact: Kenneth Clarkson, Communications Director -
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