Consumers Energy plan will create fund to help victims of natural gas accidents

Attorney General Bill Schuette this week announced an agreement with Consumers Energy to create a Natural Gas Incident Response Fund to help victims of natural gas disasters and to fund improved training and safety practices for utility workers and first responders in Michigan.

Schuette pursued the settlement following a natural gas explosion that took the life of a Royal Oak Consumers Energy customer, Daniel Malczynski, 58, and damaged 30 homes in February 2013.

"What happened to Daniel Malczynski was an inexcusable tragedy, and my heart goes out to his loved ones," said Schuette. "The two main goals of this $1 million agreement are, first, to ensure tragedies like this are not repeated, and second, to provide a safety net for Consumers Energy customers who face the unthinkable tragedy of a natural gas disaster.

"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," Schuette continued. "To accomplish this, Consumers Energy will complete an independent study of the best natural gas safety practices in the industry and train Michigan utility workers and first responders to better respond to natural gas incidents for the protection of the public."

The $1 million agreement with Schuette remains independent of the Michigan Public Service Commission's ongoing investigation of the Royal Oak explosion and any sanctions that may follow that investigation. In an interim report filed with the Commission in April 2013, Consumers Energy admitted that its employees failed to follow important safety standards intended to protect the public.

"Michigan families deserve the highest standards of safety, and the commitments achieved with this agreement are the first steps toward strengthening public safety for the citizens of Michigan," said Schuette.

According to the terms of the agreement between Schuette and Consumers Energy, Consumers will spend $1 million on the following purposes:

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 Paginsurnce payments.

Strengthening?Safety Standards - According to the agreement, the remaining $100,000 will be used for two important safety initiatives:

1) 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.

2) 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.

Schuette noted the creation of the Natural Gas Incident Response Fund is considered a charitable contribution made for the benefit of the citizens of Southeast Michigan. As a result, Consumers Energy will not be permitted to recover the cost of the fund through natural gas rates charged to consumers.

The relief fund also does not replace any other obligations and responsibilities Consumer's must fulfill under state law to address the consequences of natural gas pipeline disasters.

Consumers Energy will inform its customers of the creation of the Natural Gas Incident Response Fund through inserts included with monthly billing statements. It is also required to provide an annual report to the Attorney General detailing the use of the Fund.

Published: Thu, Aug 15, 2013