Utility company forced to pay millions for the sins of an uninsured contractor


A gas utility company buried a plastic gas main in close proximity to a number of underground electrical cables. An uninsured excavating contractor who did not call to have the utilities marked caused damage to one of the electrical cables while digging a trench for a new water line. The damage to the cable resulted in faulting and arcing of several of the electrical cables located extremely close to the plastic gas line. The arcing melted holes in the line, causing gas to leak through the ground into the insured’s shopping center, which then exploded in dramatic fashion. The gas utility company defended on the basis that the industry standard at the time when the gas main had been installed did not require more than very minimal clearance between plastic gas lines and underground electrical cables. Plaintiffs discovered several private industry standards requiring separation between plastic gas lines and underground electrical cables in order to prevent this type of accident. The gas utility company then offered expert testimony said to prove that both the gas line and the electrical cables had shifted several feet underground since installation, and that, therefore, the gas utility company had left adequate clearance between the line and the wires. Cross-examination during depositions revealed a lack of scientific support for either theory and as a result the utility paid $1.5 million to settle the case.

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