Missouri has lost regulatory authority over its gas pipelines

In January, the federal government took over regulating Missouri’s more than 1.5 million miles of natural gas pipelines.

The pipelines had been regulated by the state, but the federal government said the fines for violations were too low and not in line with federal requirements.

If a gas company is violating safety standards, federal regulators can issue a fine of anywhere between $272,000 and $2.7 million. For the same violation, the state of Missouri could issue just a fraction of that financial penalty — between $20,000 and $200,000.

At the beginning of 2025, the federal Pipeline and Hazardous Materials Safety Administration said that was too low.

But the only way to raise the fines at the state level is through legislation, which has not happened over the last decade when the bill has been proposed.

“The federal government finally said Missouri can no longer do this because they’re not in compliance,” said state Sen. Mike Cierpiot, R-Lee’s Summit.

Cierpiot is sponsoring a bill to raise Missouri’s violation fee rate, bringing the state back into compliance with federal standards and therefore regaining its jurisdiction.

Changing the number of fines requires the legislature to pass a bill. Cierpoit sponsored similar legislation last year and in the years preceding.

The federal government warned Missouri lawmakers and utility regulators that the state was at risk of losing regulation authority. Cierpiot’s attempts to pass a law to change the fee structure to ward off this outcome have been unsuccessful.

“The last three or four years has been kind of a tough thing to get through bills through the Senate — and so utility bills, as most things, have got clogged up at the end,” he said.

Although a casualty of the machinations of the Missouri lawmaking process before, Cierpoit is feeling positive about this year’s bill.

“It’s just been caught up — as many things have been caught up lately — just because of the dysfunction of the Senate,” he said.

The legislation includes an emergency clause, which would allow it to take effect as soon as the governor signs it. However, the gas pipeline safety bill is tied to other, more controversial, proposed utility laws such as “future test year” — a policy that allows utilities to set prices based on projected expenses instead of incurred costs.

That bill ran into a filibuster Wednesday evening but received initial approval by the Senate Thursday afternoon. It will need to be approved once more by the Senate before going to the Missouri House.

Fines are the last resort

Kathleen McNelis is the pipeline safety manager with the Missouri Public Service Commission, the state agency that regulates utilities, including gas pipelines. She said the commission conducts between 100 and 150 routine pipeline inspections each year.

“At the end of each inspection, our staff will have a verbal discussion with the operator and say, ‘This is what we’re seeing.’ They come back to the office if there was a probable violation, we would send them a letter and say, ‘This is what we found,’” McNelis said.

Inspectors are looking for leaks, corrosion and any mechanical issues that could cause issues, in addition to ensuring that safety protocols are being met and staff are correctly trained.

Improperly attended to gas pipelines can cause explosions and fires. McNelis said an accident like that would be investigated; if the company was found negligent, a fine would be issued, but those instances are relatively rare.

McNelis said the agency has a good relationship with utilities and that’s because they both want the same thing — safety. When a violation is identified, they work with the company to ensure it gets fixed.

“What steps are you going to take to ensure that this doesn’t happen in the future?” she said.

According to the U.S. Census Bureau, gas is used to heat approximately 50% of homes in Missouri, but that comes with some level of risk.

“Gas is a combustible material, and we want to make sure that everything’s operating as well as it can,” said Rich Germinder, Public Service Commission senior policy adviser.

“If we do have an incident, that incident is controlled and safe, that we don’t have a major situation and that we’re able to react to it for the safety of the public,” he said.

He said what a gas company may be fined for a violation matters because the higher the fine, the more likely a company will take steps to avoid it.

“As a general concept to the idea of a penalty or a fine is that the cost of the violation is sufficient to deter or to ensure compliance,” Germinder said.

But, the state of Missouri doesn’t issue many, if any, fines. According to a public records request obtained by KBIA, in 2023 state regulators found 74 violations, but no fines were issued. Germinder said that’s because fixing the problem is the priority.

“Your ability to return to compliance quickly, in a timely manner, is our number one priority,” he said. “We are not driven to issue fines or penalties as a matter of first resort. It’s a matter of last resort.”

Germinder said any money collected from gas utility fines goes to the local school fund where the violation occurs.

“When those penalties are levied by the federal government, they go to the federal treasury,” he said.

He said other “legislative battles” have taken precedence over getting Missouri back into compliance with federal guidelines.

“The feds basically had given us an opportunity to make the corrections and make the changes over time, and (we) were offered some leniency towards our noncompliance,” he said. “Eventually, the feds just believe that it had been too long.”

This story originally appeared in the Columbia Missourian and was published through an agreement with Missouri Independent, a nonpartisan, nonprofit news organization covering state government, politics and policy.