State’s nat­u­ral gas lines sub­ject of $500 mil­lion update plan

Austin American-Statesman - - BUSINESS & PERSONAL FINANCE - By El­iz­a­beth Souder

Texas Rail­road Com­mis­sion’s chief wants all of state’s steel lines for nat­u­ral gas to be re­placed with plas­tic.

Texas Rail­road Com­mis­sioner Michael Wil­liams pro­posed Tues­day that the com­mis­sion re­quire util­i­ties to re­place the lines that bring nat­u­ral gas from pipe­lines un­der neigh­bor­hood streets to homes.

Texas has at least 525,000 steel lines and per­haps as many as 1 mil­lion, he said.

The project could cost more than $500 mil­lion, with that pos­si­bly be­ing borne by cus­tomers.

“It would be the largest re­place­ment pro­gram the Rail­road Com­mis­sion has ever done,” Wil­liams said.

The com­mis­sion took no ac­tion at its meet­ing Tues­day; the in­dus­try is study- ing the pro­posal.

Reg­u­la­tors tar­geted the ser­vice lines af­ter sev­eral deadly home ex­plo­sions.

The prob­lem is that the old ser­vice lines are made of rigid steel, which can shift and cor­rode. Wil­liams said he wants util­i­ties to re­place the steel with new plas­tic lines.

Depend­ing on how the com­mis­sion might struc­ture an or­der, the re­place­ments could take as long as 10 years to com­plete. Cre­at­ing a rule to re­quire the re­place­ments will take months.

Lori Moreno, a spokes­woman with Texas Gas Ser­vice, which serves Austin, El Paso and the Rio Grande Val­ley, said the com­pany had not had the same prob­lems that prompted Wil­liams’ pro­posal.

“We un­der­stand pipe­line safety is the Rail­road Com­mis­sion’s goal. It’s ours, too,” she said. Moreno said Texas Gas Ser­vices just got Wil­liams’ pro­posal the night be­fore the meet­ing and could not es­ti­mate what the im­pact might be.

“Our en­gi­neer­ing depart­ment is as­sess­ing how it will im­pact us,” she said.

It’s un­likely that util­i­ties would be on the hook for the $500 mil­lion cost. Util­i­ties typ­i­cally can charge ratepay­ers for the cost of new in­fra­struc­ture, plus a 10 per­cent profit.

Steel was used for ser­vice lines in the 1960s, ’70s and ’80s.

“It’s pipe that prob­a­bly should have

been re­moved many years ago, but it def­i­nitely needs to be re­moved now, over the course of the next few years,” said Ge­of­frey Gay, a lawyer with Lloyd Gosselink who rep­re­sents a num­ber of North Texas cities in the mat­ter.

In 2006, a Wylie cou­ple died when a nat­u­ral gas leak ig­nited their home. In 2007, an ex­plo­sion in Cle­burne killed two women and in­jured three other fam­ily mem­bers.

Of­fi­cials blamed those blasts on leaks at cou­plings, which are pieces used to join pipes. The com­mis­sion or­dered util­i­ties to re­place a par­tic­u­lar style of cou­pling im­pli­cated in those ex­plo­sions.

Last year, a house in Mesquite ex­ploded. The com­mis­sion told the gas com­pany, At­mos, to stop us­ing steel ser­vice lines like the one at the home. At­mos de­cided to re­place each of the 680 lines in the sub­di­vi­sion.

Wil­liams said it would take years to re­place all of the steel ser­vice lines.

Wil­liams said he will pro­pose re­quir­ing util­i­ties to re­place lines in the leaki­est ar­eas within two years. That in­cludes cities where leaks are de­tected at 25 per­cent or more of the struc­tures served by the natu- ral gas util­ity, he said.

The util­i­ties would have to re­place 10 per­cent of the steel lines ev­ery year in cities with leaks in 5 to 25 per­cent of struc­tures.

Steel lines in cities with leaks in less than 5 per­cent of the struc­tures would have to be re­placed if the util­ity runs across a leak.

If the other com­mis­sion­ers agree to the pro­posal — and Wil­liams said he will give them at least a cou­ple of weeks be­fore ask­ing them to vote — writ­ing and im­ple­ment­ing the rule would take months.

Util­i­ties, cities and cus­tomers would get 60 days to com­ment on the pro­posal. The com­mis­sion some­times holds town hall meet­ings to gather opin­ions on a new rule, which could lengthen the time.

Even though some houses have had ex­plo­sions, Wil­liams said the safety is­sue with the ser­vice lines isn’t so se­vere that they must be re­placed im­me­di­ately.

“It’s just im­por­tant to re­place the in­fra­struc­ture,” Wil­liams said. “Just as we need to do re­pairs to roads and bridges and high­ways, we have to do re­pairs to ser­vice lines.”

Michael Wil­liams

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