APGA Weekly Update July 7, 2016

07-07-2016 13:15

APGA Weekly Update, July 7, 2016
House Subcommittee Appropriates LIHEAP Funds
On July 7, 2016, the House Appropriations Subcommittee on Labor, Health and Human Services,
Education, and Related Agencies marked up their fiscal year 2017 budget bill. The subcommittee
appropriated $3.49 billion for the Low Income Home Energy Assistance Program (LIHEAP), which would
be an increase of $100 million over 2016 funding. This subcommittee appropriation bill will now go to
the full House for a vote.
In early June, the Senate Subcommittee on Labor, Health and Human Services passed a budget bill that
kept LIHEAP funding level with 2016 at $3.39 billion. Normally, after the full Senate and House of
Representatives pass their respective budget bills, a conference committee would reconcile the two
versions so it can go to the President for final passage. Because of the slow pace of legislation this year,
there will likely be some form of an omnibus bill that will resolve differences between the funding
APGA has signed an open letter from the National Energy and Utility Affordability Coalition (NEUAC), to
congressional appropriations committees asking them to increase the amount of LIHEAP funding for
fiscal year 2017 to $4.7 billion. At the same time, APGA continues to push for full funding at the
authorized $5.1 billion level.
Earlier this year, the Obama administration recommended reducing spending on LIHEAP to $3 billion in
fiscal year 2017, which is a $390 million decrease. APGA will keep members informed of any
developments. It is important to note that while fiscal year 2017 does not start until October 1, 2016,
the budgets will face many election year obstacles. For questions on this article, please contact Todd
Brady of APGA staff by phone at 202-464-2742 or by email at tbrady@apga.org.
APGA Urges PHMSA to Modify Proposed Transmission Rule Changes
On July 7, APGA filed written comments with the Pipeline and Hazardous Materials Safety
Administration (PHMSA) urging them to modify proposed changes to pipeline safety regulations
primarily affecting transmission pipelines. Only 62 public natural gas systems have pipe classified as
transmission, however virtually all APGA members receive gas through transmission lines, therefore
transmission operators would try to pass any additional costs imposed by PHMSA’s rules on to their
municipal gas customers.
The proposed rule changes stemmed from requirements in the 2011 pipeline safety reauthorization,
recommendations from the National Transportation Safety Board (NTSB), and the 2010 pipeline
accident in San Bruno, Calif. In that accident, the pipeline operator’s records indicated a different type of
pipe than what was actually in the ground, therefore a significant portion of the proposed rules dealt
with ensuring operators have records that are “reliable, traceable, verifiable, and complete.”
Although PHMSA stated that the rule changes would only affect transmission, APGA’s comments
pointed out that many of the proposed changes were to sections of the pipeline safety regulations that
apply to both transmission and distribution. For example, PHMSA proposed to amend Appendix D that
deals with criteria for cathodic protection, to require an “instant off” measurement of pipe to soil
potential, requiring the cathodic protection system to be turned off just before the reading is taken. This
could require significant costs for distribution systems that typically use galvanic anodes physically
connected to the pipe for cathodic protection. APGA’s comments pointed out that such costs would
provide little benefit as only three out of 592 distribution reportable incidents since 2010 occurred on
pipe under cathodic protection, and none of those three incidents caused any injury or property loss to
the public; the only cost was to the operator to repair the pipe.
APGA strongly supported PHMSA’s proposal to define “distribution center” as the point where gas is
metered or pressure is reduced. The existing rules define any pipe from a storage facility to a
distribution center as transmission regardless of operating pressure, but distribution center is not
currently defined, and many of the “transmission lines” operated by APGA members would be
reclassified as distribution under PHMSA’s proposal. APGA’s comments also urged PHMSA to limit the
proposed changes to pipelines operating over 30 percent of Specified Minimum Yield Stress (SMYS).
Even if damaged or corroded, pipelines operating below 30 percent SMYS are unlikely to rupture but
would start to leak and the leak could grow over time rather than suddenly rupture like the pipe in San
Bruno. While any leak is serious, the current industry practices of odorizing gas and performing patrols
and leakage surveys has proven effective at finding leaks before the leak grows to the point it poses a
threat to public safety.
The proposed rule covers 136 Federal Register pages and proposed many complex and interrelated
changes. A copy of the proposed rule APGA’s written comments can be found here. For questions on
this article, please contact John Erickson of APGA staff by phone at 202-464-0834 or by email at
EIA Reports Storage Increase of 39 Bcf to Put Working Gas Storage at 3,179 Bcf
Here is the weekly EIA Summary Report issued on Thursday, July 7, 2016, which reports the week’s
storage report highlights for Friday, July 1, 2016. A 39 Bcf increase has been reported.
Working gas in storage was 3,179 Bcf as of Friday, July 1, 2016, according to EIA estimates. This
represents a net increase of 39 Bcf from the previous week. Stocks were 538 Bcf higher than last year at
this time and 599 Bcf above the five-year average of 2,580 Bcf. At 3,179 Bcf, total working gas is above
the five-year historical range.

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