APGA Weekly Update April 7, 2016

04-07-2016 13:32

APGA Joins Letter in Support of Unmanned Aerial Vehicle Legislation

On April 5, APGA joined a letter to the Senate signed by numerous energy associations in support of
legislation drafted by Senator Inhofe (R-Okla.) titled the Unmanned Aerial Vehicles (UAV) for Energy
Infrastructure Act, intended to allow energy infrastructure operators to use UAVs to comply with federal
inspection and safety requirements that operators already have authority to use manned aircraft for
compliance. Several public natural gas systems have utilized or are in the process of moving towards
utilization of UAVs to assist them in the operation of their utility, particularly at is pertains to
inspections. In addition to APGA, the letter was signed by the American Gas Association, the Interstate
National Gas Association of America, and the American Petroleum Institute.

In the letter, APGA and the other groups express support for the Federal Aviation Administration (FAA)
to establish a process by which owners and operators of crucial infrastructure may incorporate the use
of UAVs into regulatory compliance, safety, emergency response, and operational activities. The groups
also stated that this legislation will “improve both safety and reliability through the use of these new
UAV technologies.”

Senator Inhofe hopes to have this legislation attached to other legislation being debated on the Senate
floor that reauthorizes the FAA. For questions on this article, please contact Dave Schryver of APGA
staff by phone at 202-464-2742 or by email at dschryver@apga.org.

APGA Speaks at Georgia Pipeline Safety Seminar

On April 7, APGA’s Vice President of Operations, John Erickson, spoke at the Georgia Pipeline Safety
Seminar in Macon, Ga. John provided an update to the nearly 300 operators and regulators in
attendance on APGA programs to assist members to improve operational efficiency and described
APGA’s efforts to communicate to Washington regulators the importance of ensuring that pipeline
safety rules are reasonable for public natural gas utilities, which make up the majority of utilities
regulated by the Pipeline and Hazardous Materials Safety Administration (PHMSA). He cited the recent
final rule on construction inspection that would have required most APGA members to hire outside
inspectors to inspect new mains constructed by utility crews. Thanks to APGA’s efforts, that rule has
been indefinitely stayed until APGA’s concerns can be addressed. He reviewed APGA’s positions on
several proposed rules including excess flow valves, operator qualification plastic pipe and incident
notification.

John described the APGA System Operational Achievement Recognition (SOAR) program that
established criteria to challenge members to strive for excellence in natural gas distribution operations.
This is the third year of the SOAR program. So far, 28 members have achieved one of the three levels of
SOAR. He also demonstrated how utilities can use bar coded information that will be placed on plastic
pipe and components under the new ASTM 2897 standard. Encoded in the bar code are the name of the
manufacturer, the date of manufacture, lot number, material, type of component and size. APGA is
working with a smart phone application developer to customize a $0.99 bar code reading and data
storage program to provide an inexpensive method to record and store these data as well as the date
and GPS coordinates where the pipe and components were installed. Such data will be invaluable in case
problems are identified with any pipe or component in the future, similar to what occurred with pre-
1973 Aldyl A pipe in the 1990s.

John also described improvements that have been made or are in the works for the APGA Security and
Integrity Foundation’s (SIF) SHRIMP program. Most important were recent enhancements to allow users
to track and statistically analyze performance measure. The Distribution Integrity Management
Programs (DIMP) regulation requires utilities to reevaluate DIMP plans at least every five years and 2016
will be the fifth year the rule has been in effect. The critical step in reevaluation is assessing whether
performance measures indicate that additional actions to reduce risk are working. Using SHRIMP’s
statistical analysis tools, users can quickly see whether performance measures are trending in the right
direction. He also talked about upcoming improvements to SHRIMP’s threat assessment interviews, risk
ranking model and written plan.

For questions on this article, please contact John Erickson of APGA staff by phone at 202-464-0834 or by
email at jerickson@apga.org.

Exploring the U.S. Anti-Production Movement and Effective Counter-Messaging Webinar on April 19
at 2 p.m. EST

Join APGA for a webinar on gas production messaging on April 19 at 2 p.m. The U.S. anti-oil and gas
movement has shifted tactics in recent years from trying to obtain a federal ban on domestic
production, to using state and local laws, ballot measures, and other maneuvers to prohibit oil and gas
production. In order to understand the anti-production movement’s shift in tactics and messaging, and
to discuss techniques on how to counter these actions, APGA has invited the Consumer Energy Alliance
to put on a webinar to explore these critical issues. The webinar is free for APGA members. Please
register at https://attendee.gotowebinar.com/register/1602515480718659844.

2016 Government Relations Conference Webinar on April 26 at 3 p.m. EST

APGA staff will host a webinar on April 26 at 3 p.m. to go over current legislative issues and how to
effectively lobby at the federal level for your municipal natural gas system in preparation for our 2016
Government Relations Conference. All APGA members, even if they not attending the 2016 Government
Relations Conference, are encouraged to participate. The webinar is free for APGA members. Please
register at https://attendee.gotowebinar.com/register/1602515480718659844.

LDC Southeast Forum Fast Approaching

The 16th Annual Southeast Forum this April 11-13 in Atlanta is the premier event where 500+ of the
natural gas industry’s leaders gather in Atlanta for three days of networking, insights and deal making.
APGA Executive Vice President Dave Schryver will be speaking to attendees on Wednesday, April 13.
Register today at
https://www.eiseverywhere.com/ereg/index.php?eventid=153303&reference=aboutpage

Senate Energy Bill Stalled Due to Legislative Hold

The Senate began its debate on its energy bill, the Energy Policy Modernization Act (S. 2012) at the end
of January with high hopes for passage given the bill’s strong bipartisan support. However, the crisis
over contaminated drinking water in Flint, Mich., and the inclusion of language to provide aid to the city
of Flint has stalled the passage of the overall bill due to a legislative hold being placed on S. 2012.
A hold is a Senatorial courtesy extended to all Senators that allows each individual Senator to block
consideration of a bill. The hold can be overcome by 60 votes, but pursuing a vote to override the hold is
very rare due to the fact that each member wants to preserve holds as a tool for their use down the
road. If overrides become common, then holds lose their efficacy.

Senator Lee (R-Utah) has placed a hold on S. 2012 over his concerns about the bipartisan Flint aid
package. He originally argued that the issue is purely a state problem and should be dealt with by the
state given that it has a rainy day fund and a budget surplus. He has more recently argued that the aid
package isn’t actually paid for, despite the bill sponsors providing a rescission of funding from the
Advanced Technology Vehicle Manufacturers (ATVM) loan program that provides loans to automobile
manufacturers to retool their production facilities to produce advanced technology vehicles including
electric vehicles, plug-in hybrids, natural gas vehicles, etc. Lee argues that though the entire cost of the
aid package is covered by the rescission, the money from the ATVM program must be released in the
same year as the aid packages are dispersed.

Negotiations between Lee and bill sponsors are ongoing with numerous offers to resolve the impasse
being exchanged. On April 6, a new offer was given to Senator Lee and bill sponsors are awaiting a
counteroffer.

The hold on S. 2012 is an issue for APGA members as the bill contains language supported by APGA that
delays the Department of Energy’s (DOE) implementation of the furnace rule to allow stakeholders the
opportunity to negotiate and reach agreement on a rule that makes sense. Specifically, the furnace
language in the bill would prohibit DOE from prescribing a final natural gas furnace rule until:
1. DOE convenes a representative advisory group of interested stakeholders, including, among others,
manufacturers, distributors, contractors, home builders, energy efficiency advocates, natural gas
utilities, electric utilities, and consumer groups;
2. That advisory group completes an analysis of a nationwide requirement of a condensing furnace
efficiency standard within one year including a complete analysis of current market trends regarding the
transition of sales from non-condensing furnaces to condensing furnaces, the projected net loss in the
industry of the present value of original equipment manufactured after adoption of the standard, the
projected consumer payback period and lifecycle cost savings, a determination of whether the standard
is economically justified, and other common economic principles; and,
3. The advisory group makes a determination as to whether a nationwide requirement of a condensing
furnace efficiency standard is technically feasible and economically justified and that determination
would be published in the Federal Register.

Should the advisory group determine that a nationwide requirement of a condensing furnace efficiency
standard is not technically feasible and economically justified, DOE is required to, within 180 days from
the date the determination is published in the Federal Register, establish amended standards through a
negotiated rulemaking process.

APGA will keep members apprised of any developments with the S. 2012. 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.

EIA Reports Storage Increase of 12 Bcf to Put Working Gas Storage at 2,480 Bcf

Here is the weekly EIA Summary Report issued on Thursday, April 7, 2016, which reports the week’s
storage report highlights for Friday, April 1, 2016. A 12 Bcf increase has been reported.
Working gas in storage was 2,480 Bcf as of Friday, April 1, 2016, according to EIA estimates. This
represents a net increase of 12 Bcf from the previous week. Stocks were 1,008 Bcf higher than last year
at this time and 874 Bcf above the five-year average of 1,606 Bcf. At 2,480 Bcf, total working gas is
above the five-year historical range.

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