State sets policy to enhance safety, modernize and update pipeline system
Program allows pipeline companies to recover costs quicker
OLYMPIA, Wash. – State regulators today issued a policy that encourages Washington’s natural gas companies to replace older pipe that is relatively more likely to fail. The plan also provides a mechanism to allow gas companies to recover the cost of replacing this pipe.
In an effort to update and modernize the state’s pipeline system, the Utilities and Transportation Commission (UTC) is encouraging Washington’s four natural gas utilities to accelerate the pace in replacing the highest-risk segments of pipeline in the state.
The state’s four natural gas companies are Avista, Puget Sound Energy (PSE), Cascade Natural Gas Corp. and Northwest Natural Gas Co. The utilities serve almost 2 million customers in Washington.
All of the utilities have older polyethylene pipe as part of the pipeline infrastructure. Some older pipes may develop leaks or become damaged over time. These older pipes will be replaced with a modern, durable plastic pipe. Washington gas companies have replaced all cast iron and have programs in place to remove all wrought iron, copper and bare-steel pipe from service over the next five years.
“In Washington, we are fortunate to have a relatively modern pipeline infrastructure,” said the three-member commission in their policy statement. “However, while we are fortunate to have very little of the highest risk, or even dangerous pipe in service, the companies report they have other kinds of elevated-risk gas infrastructure in service, including some plastic mains and services manufactured before 1986 and coated-steel mains and services that may not have adequate corrosion protection throughout their service life.”
In the interest of public safety, the commission is encouraging the gas companies to take a proactive approach to replace pipeline that present a higher risk immediately. The companies report three barriers to replacing high-risk pipes quickly: a shortage of qualified workers, local government restrictions and winter weather conditions that slow down progress.
The UTC is requiring each of the four natural gas distribution companies to file a pipe- replacement plan by June 1, 2013 for all pipes that pose an elevated risk for failure, a two-year pipeline-replacement plan and a plan to identify the location of high-risk pipelines. Subsequent plans need to be filed by June 1 every two years thereafter. Companies that already have plans in place may only need to revise them.
Currently, each gas company regulated by the commission recovers costs through general rate cases, which can take up to 11 months for a final decision. The commission would create a special cost-recovery mechanism (CRM) for the gas companies to replace high-risk pipe while allowing a faster cost recovery in customer rates. CRMs will be subject to commission approval.
Information included in the pipe-replacement plans include the type, condition and age of pipe to be replaced. The plan should identify the location of the pipe that presents an elevated risk of failure or a timetable to locate the high-risk pipe.
The UTC monitors natural gas pipeline safety regulations on PSE’s 12,000 miles of natural-gas distribution system in Washington. Bellevue-based Puget Sound Energy supplies natural gas to 785,000 customers, primarily in the Puget Sound area of Washington. The UTC sets the natural gas rates for all four natural gas distribution companies in Washington.
Kennewick-based Cascade Natural Gas Corp. has 4,358 miles of natural-gas distribution system in Washington. The company serves about 195,000 residential and business customers in communities throughout the state, including Bremerton, Bellingham, Aberdeen, Moses Lake, Wenatchee and Yakima.
Headquartered in Portland, Ore., Northwest Natural serves 70,746 residential and business customers in Clark, Skamania and Klickitat counties in Washington. Northwest Natural has 1,695 miles of natural-gas distribution in the state.
Spokane-based Avista serves more than 149,000 natural gas customers, primarily in Eastern Washington. The company has 3,340 miles of natural-gas distribution in the state.
Established by the Legislature in 1955, The UTC’s Pipeline Safety Program regulates the safety practices of 31 pipeline companies and conducts safety inspections on more than 24,000 miles of natural gas and hazardous-liquid pipelines in Washington.