The Commission voted 5-0 to publish the proposed settlement for public comment.
If ultimately approved, the proposed settlement would resolve the Commission's investigation while establishing a series of measures intended to strengthen future construction oversight, enhance quality assurance, improve safety reporting and expand the use of operational data to support the continued safe and reliable operation of Pennsylvania's natural gas distribution system.
The investigation did not identify any gas leaks, explosions, fires, property damage or injuries associated with the plastic pipe fusion joints addressed in the proposed settlement.
Investigation and Proposed Settlement
According to the proposed settlement, concerns first came to light during a Pipeline Safety Division inspection of a UGI construction project in Nazareth in late 2022, where inspectors observed a contractor failing to follow UGI construction procedures during the installation of plastic natural gas main.
Following that inspection, UGI expanded its review to additional construction projects involving the same contractor personnel.
Between March 2023 and July 2025, the company conducted integrity inspections at multiple projects in Allentown, Bethlehem, Nazareth and Emmaus, ultimately investigating 273 pipeline facilities.
The investigation identified 27 plastic butt fusion joints and 25 electrofusion joints that failed visual inspection or company construction procedures.
According to the settlement, UGI excavated, removed and replaced all identified unacceptable fusion joints, and the contractor employees involved are no longer permitted to perform work on UGI's natural gas distribution system.
As part of the proposed settlement, I&E alleged that UGI violated provisions of the Public Utility Code and federal pipeline safety regulations related to pipeline construction, inspection and quality assurance. UGI disputes those allegations and does not admit any violations as part of the proposed settlement.
Beyond resolving the allegations raised during the investigation, the proposed settlement is intended to strengthen future construction practices by improving oversight, enhancing quality assurance, expanding safety reporting and leveraging better operational data to identify and address potential issues before they can affect customers or the public.
Among its key provisions, the proposed settlement would:
-- Strengthen accountability by requiring UGI to pay a $150,000 civil penalty while prohibiting recovery of certain costs for work completed by the contractor from ratepayers.
-- Enhance construction oversight through expanded quality assurance measures, reinforced inspection practices and improved procedures for identifying and correcting unacceptable plastic pipe fusion installations before they are placed into service.
-- Improve safety reporting and operational awareness by expanding documentation of plastic fusion installations and failures, increasing the use of GPS location data for new plastic fusion joints where practical, and strengthening data collection to support future inspections, investigations and construction oversight.
-- Support continuous safety improvement by incorporating additional analysis of plastic pipe fusion performance into UGI's integrity management and risk assessment programs, helping identify trends, improve construction practices and reduce future risks across the distribution system.
== Strengthen regulatory oversight and transparency by continuing detailed reporting of fusion failures to the Commission's Pipeline Safety Division and documenting compliance with the settlement's required safety enhancements.
The settlement also recognizes UGI's cooperation throughout the investigation, including providing requested information, conducting extensive integrity inspections and remediation activities, and implementing a number of safety enhancements while the investigation was underway.
Public Comment on the Settlement
The proposed settlement will be published in the Pennsylvania Bulletin, marking the beginning of a 25-day public comment period.
Complete instructions for submitting public comments will be provided when the proposed settlement is formally published.
A copy of the Commission's order and the proposed settlement will also be provided to the Pennsylvania Office of Consumer Advocate and the Pennsylvania Office of Small Business Advocate for their review and comment.
Following the close of the public comment period, the Commission will carefully consider all comments received before issuing a final decision regarding the proposed settlement.
Documents related to this case can be found at PUC Docket No.: M-2026-3051981.
Click Here for the PUC announcement.
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[Posted: July 17, 2026] PA Environment Digest
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