A Michigan utility will pay $1.4 million in response to two separate natural gas explosions in the Detroit area that killed three people, injured others and caused millions of dollars in property damage.
Consumers Energy, one of the state’s two largest utility companies, will create a $1 million fund to help victims of natural gas disasters with shelter, food and clothing — a portion of which will go to study best safety practices and train utility workers along with first responders.
State Attorney General Bill Schuette said he sought the agreement after a February blast killed Daniel Malczynski, 58, of Detroit suburb Royal Oak, and damaged 30 homes.
State regulators on Monday fined Consumers Energy $340,000 for the incident because its crew failed to dig properly, which led to a gas leak, and then didn’t properly investigate how far that leak had spread. A worker knocked on Malczynski’s door but after getting no answer, left minutes before the deadly explosion.
The utility also got a $90,000 fine for not thoroughly investigating a leak before a December 2010 blast destroyed a furniture store in the Detroit suburb of Wayne, killing two employees and injuring the owner who was inside and a driver passing by.
Schuette said victims helped by the fund will not waive their right to sue Consumers, a unit of Jackson-based CMS Energy Corp. They also will be able to accept charitable assistance and insurance payments.
Schuette said the Royal Oak incident was “inexcusable.”
“It’s not good enough to just respond to victims after the fact. We must do all we can to ensure mistakes of the past are not repeated,” he said.
The utility said it fully accepted the fines and agreement with the state.
It previously fired employees involved in the Royal Oak explosion and has settled a lawsuit with Malczynski’s family for an undisclosed amount.
“As we’ve said previously, these incidents failed to meet our standards, or the standards expected by our customers across Michigan. … We have reinforced our training and policy education for all employees who work on our natural gas system,” Consumers said in a statement.
A lawsuit filed by the estates of the two workers killed inside the William C. Franks Furniture store also ended up settled.
The state Public Service Commission, in a report released Monday, said “outside force” damaged a nearby gas main. The four factors blamed were the city of Wayne’s installation of a nearby sewer line, construction of a residential chain-link fence, the city’s pouring of a concrete wall and a possible sinkhole.
The PSC also found crews in Royal Oak, in replacing a steel main with a plastic main, made no attempts to remove sidewalks to see existing gas lines — a violation of the utility’s own rules — nor did they keep required distances between new and old lines. Regulatory staff also faulted Consumers for not having a supervisor on site.
Because the new Natural Gas Incident Response Fund is a charitable donation, the utility cannot recover the cost through natural gas rates charged to customers, according to the state.