APGA Weekly Update March 3, 2016

03-03-2016 12:32

House Energy and Power Subcommittee Holds Hearing on Pipeline Safety

The House Energy and Power Subcommittee held a hearing on March 1 on a draft pipeline safety
reauthorization bill titled the Pipeline Safety Act of 2016.

The House Energy and Commerce Committee and the House Transportation and Infrastructure
Committee both have jurisdiction over pipeline safety. Consequently, both committees will have to pass
their own versions of pipeline safety legislation, which will then be merged together and will have to be
voted on by the full House of Representatives. Once the Senate passes its version of pipeline safety,
either one chamber will have to accept the other’s version, or the chambers will go into conference
committee to negotiate a compromise draft that then has to be passed by both the House and Senate.
As drafted, the Pipeline Safety Act of 2016 appears to be noncontroversial. It largely focuses on pushing
the Pipeline and Hazardous Materials and Safety Administration (PHMSA) to complete the numerous
outstanding rulemakings from the 2011 pipeline safety bill, expediting the hiring of inspectors, “direct
hire authority” and the establishment of standards, and implementing user fees for underground
storage.

As with the recent Transportation and Infrastructure Committee hearing, APGA submitted testimony
arguing that given that 16 of the mandates from the 2011 pipeline safety bill have yet to be
implemented by PHMSA, it would be unwise for Congress to layer on additional regulations that may
have conflicting and contradictory impacts to those that are still pending. Moreover, the testimony
argues that the current user fee system in which user fees are collected by interstate transmission
pipelines and paid for by customers in their base rates is efficient and equitable and no changes should
be made to the system. In addition, the testimony also raised an issue with the SAFE Pipes Act, which
includes a study that would require the Comptroller General of the United States to submit a report to
Congress on the effectiveness of the natural gas integrity management program including an analysis or
recommendations regarding changes to the current definition of High Consequence Areas (HCA) or
expanding integrity management beyond HCAs. APGA’s concern is that PHMSA’s current definition of transmission also captures small diameter local distribution company (LDC) pipelines, which are not high stress transmission lines. The testimony stresses that this study should include an analysis of the appropriateness of PHMSA’s definition to ensure that LDC pipelines are not adversely impacted in the expansion of HCAs.

As in the earlier hearing, the issues broke along party lines with Democrats urging that the Pipeline
Safety Act be strengthened with tougher standards and new requirements, while Republicans seemed
satisfied with finishing the 2011 regulations and standards setting, and expediting hiring of PHMSA
employees. For example, the SoCal gas leak in Los Angeles was constantly referenced by both sides but
with very different interpretations of what to do about it. Democrats used the incident to call for more
stringent regulations, while Republicans generally argued for appropriate standard settings.
Two noteworthy items that were discussed are HCAs and emergency order authority. Representative
Capps (D-Calif.) seemed very much focused on HCAs. Rep. Capps asked Marie Therese Dominguez,
Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA), about and
seemed interested in expanding HCAs and in increasing the frequency of inspections of pipelines in
HCAs. Given the PHMSA’s current definition of transmission which includes not just high stress transmission lines but also some lower stress LDC pipelines, these changes could impose high costs with no safety benefits.. That said, given Republican control and the lack of
Republican enthusiasm in the hearing for these changes, it doesn’t appear likely that either of these
proposals would be implemented as Rep. Capps’.

Representative Doyle (D-Pa.) asked Administrator Dominguez what it would allow the agency to do if
PHMSA had emergency order authority. Administrator Dominguez responded that it would allow the
agency to order the removal of pipelines or joints that were inappropriately manufactured and have
operators remove it.

APGA will keep members apprised of any developments with these issues and pipeline safety in general.
For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or
by email at smorrison@apga.org.

Get Involved in the 2016 ICC Code Development Process

Recently, APGA has been discussing the importance of involvement in the International Code Council
(ICC) code development process as March 18 is the last day to register and still vote on the 2016 building
code amendments.

The ICC develops the International Green Construction Code (IgCC), the International Fuel Gas Code
(IFGC) and the IECC (International Energy Conservation Code) as well as many other codes. The ICC is
the main source of standards for the residential construction segment and they impact how, where and
when natural gas can be used in a home or business. An overwhelming majority of state and local
jurisdictions already use some version of the ICC’s model codes.
Now, more than ever, APGA members need to participate in the development of the model building
codes that form the basis of construction regulations across the country. As a Government Member,
systems may designate 4-12 voting representatives. Dues are also based on population and range from
$135-370 per system.

In an effort to promote wider participation, the process was recently streamlined to allow members to
participate without having to travel by using an online, cloud-based process called cdpACCESS (code
development process access). Now, systems can submit code change proposals, watch testimony, view
data, and vote on codes online.

Different advocacy groups are beginning to rally their supporters. Recently, ACEEE encouraged state
affiliates and like-minded code officials to get involved. In this code cycle, the direct-use of natural gas
may face multiple proposals that could try to eliminate or severely limit the use of natural gas in homes.
It is known that there will be a proposal to ban the use of vent-free fireplaces, and it is anticipated that
there will be proposals to limit home refueling stations.
The basic structure of the ICC code development is a two-tiered process. The first part of the code
development process allows for a wide range of proposals that are accepted, debated and eventually
voted on by both Government and Corporate Members for approval of adoption. Because these votes
have historically had a low voter turnout, a recommendation of a final standard has often been made
based on very narrow margins. Participation by APGA members as well as investor owned utilities
would have an immediate impact on what codes are allowed to proceed to the final adoption vote. As
an example, recent votes to augment the International Fuel Gas Code standards were decided on a
margin of less than five votes in some cases.

Once a list of tentative amendments have been voted on by the ICC committee, the proposals are then
sent for final adoption vote. Only Government Members are allowed to vote on what ultimately makes
up the final code amendments. APGA members would qualify to vote in these proceedings and
participation by APGA members would have an immediate impact on what codes are included in the
next version of the ICC code.

It is imperative that systems help develop the next generation of building codes. These updated model
codes form the basis for uniformity in building safety in all 50 states. To aid in APGA’s participation of
the code development process, there will be an informational webinar on March 8 at 1:00 p.m. EST to
discuss the ICC process as well as to help in registration for the ICC.

Register at https://attendee.gotowebinar.com/register/3757008515233712900

Please make participation in the ICC’s model code development process a top priority every year. APGA
appreciates your time and looks forward to working with you. For questions on this article or on the ICC
development process, please contact Dan Lapato of APGA staff by phone at 202-464-2742 or by email at
dlapato@apga.org.

EIA Reports Storage Decrease of 48 Bcf to Put Working Gas Storage at 2,536 Bcf

Here is the weekly EIA Summary Report issued on Thursday, March 3, 2016, which reports the week’s
storage report highlights for Friday, February 26, 2016. A 48 Bcf decrease has been reported.
Working gas in storage was 2,536 Bcf as of Friday, February 26, 2016, according to EIA estimates. This
represents a net decline of 48 Bcf from the previous week. Stocks were 794 Bcf higher than last year at
this time and 666 Bcf above the five-year average of 1,870 Bcf. At 2,536 Bcf, total working gas is above
the five-year historical range.

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