One of Michigan's largest utilities has agreed to pay $1 million to create a new response fund after a natural gas line exploded, killing a Royal Oak man.
Attorney General Bill Schuette said Monday Consumers Energy will spend $900,000 to help victims affected by natural gas disasters with shelter, food and clothing. Another $100,000 will help study best safety practices and train utilities and first responders.
Also Monday, state regulators fined Consumers $430,000 for the February explosion that killed Daniel Malczynski and damaged 30 homes and a 2010 furniture store explosion in Wayne that killed two employees.
Related story: Royal Oak gas line under repair months after explosion
Schuette says victims helped by the fund won't waive their right to sue the unit of Jackson-based CMS Energy Corp.
The utility says it fully accepts the fines and agreement.
The money will be broken up into:
- Helping victims - $900,000 will be made available to Consumers Energy customers impacted by natural gas disasters through a new Natural Gas Incident Response Fund. The fund will provide for immediate practical needs, including food, clothing, and shelter. Victims who access the Response Fund will not be required to waive their right to pursue private litigation against Consumers Energy following a natural gas incident. Victims will also retain the ability to accept additional charitable assistance and insurance payments.
- Strengthening safety standards - According to the agreement, the remaining $100,000 will be used for two important safety initiatives: Consumers Energy will fund an independent study of best safety practices in the natural gas industry. The independent study must be completed within one year and the final product submitted to Schuette, the Michigan Public Service Commission, and the Michigan Legislature. Consumers Energy will develop statewide training for utility workers and first responders to ensure they are prepared to respond to natural gas incidents in a way that prioritizes public safety.
Full statement from Consumers Energy:
“We fully accept the Commission’s conclusions and the fine announced today by the MPSC and Attorney General Schuette. As we’ve said previously, these incidents failed to meet our standards, or the standards expected by our customers across Michigan. For the Royal Oak incident, we have announced disciplinary measures, including terminations, for employees involved in this incident who failed to follow established policies and procedures. We have reinforced our training and policy education for all employees who work on our natural gas system. We continue to proactively reach out offering support to our neighbors, schools and businesses. We are also investing over $200 million this year to enhance and ensure the safe delivery of natural gas, part of our overall strategy to maintain system integrity, and keep our communities safe. At Consumers Energy, safety is number one, 24 hours a day, 7 days a week, and remains our top priority.”