Pennsylvania is seeking $2.65 million in penalties from a utility company over the March 2023 natural gas explosion at a chocolate factory that killed seven workers and injured 10 others.
The Pennsylvania Public Utility Commission’s (PUC) has filed a formal complaint against UGI Utilities, Inc. following its investigation into the explosion at the R.M. Palmer Co. chocolate factory in West Reading, Berks County. The complaint alleges 27 violations of state and federal safety regulations governing natural gas distribution systems.
PUC is seeking a total of $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.
UGI Response
UGI must be given an opportunity to respond to the allegations before the commission determines whether violations occurred and what penalties or corrective actions may ultimately be imposed.
UGI said in a statement sent to Insurance Journal that it is “carefully reviewing the formal complaint” and it “will continue to cooperate” with the PUC’s investigation.
“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 company added.
Chocolate Factory Blast a Deadly Reminder of Combustion Risks
The explosion and resulting fire destroyed one Palmer factory building, severely damaged another, and destroyed a nearby apartment building.
PUC said the explosion caused approximately $42 million in property damage and prompted a large-scale emergency response by 56 agencies including fire and rescue, law enforcement, emergency medical and search and rescue units.
Investigations
PUC said its investigation determined that natural gas leaked from a retired plastic service tee connected to a vintage 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 National Transportation Safety Board (NTSB} also conducted an investigation that concluded the retired polyethylene service tee was the probable cause. The NTSB also cited as contributing factors the elevated ground temperatures from the leaking steam pipe and nearby infrastructure and environmental conditions affecting UGI’s pipeline facilities.
NTSB ad PUC were at odds over the federal agency’s request that PUC turn over five years of inspection records. PUC balked, citing a state law that protects “confidential security information” about key utility infrastructure from public disclosure, even to other government agencies. The utility commission offered federal investigators a chance to inspect the reports at its Harrisburg office or to sign a nondisclosure agreement, but the safety board refused and then issued a subpoena.
In April 2024, a federal judge ordered PUC to comply with NTSB’s request.
Palmer was fined more than $44,000 by the U.S. Occupational Safety and Health Administration for failing to evacuate. Palmer denied it violated any workplace safety standards and contested the OSHA citations.
Wrongful death and negligence lawsuits have been filed against R.M. Palmer and UGI.
About 70 Palmer production workers and 35 office staff were working in two adjacent buildings at the time of the blast. Employees told federal investigators they could smell gas before the explosion.
Photo: In this screen grab from video provided by WPVI-TV/6ABC, smoke rises from an explosion at the R.M. Palmer Co. plant in West Reading, Pa., Friday, March 24, 2023. (WPVI-TV/6ABC via AP)
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