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Proposed California Decision: Require Pressure Test or Replace Pipe

All California operators of intrastate natural gas transmission pipelines -- four major private-sector utilities -- must prepare implementation plans to pressure test or replace all gas pipeline segments that have not been tested or lack sufficient records verifying such tests, according to a proposed decision released Tuesday by a state regulatory commission judge. Plans would be required to be submitted 60 days after the order is approved.

The five-member California Public Utilities Commission (CPUC) cannot take up the matter until its June 9 meeting, allowing 30 days for public comment. Administrative Law Judge (ALJ) Maribeth Bushey issued the proposed decision.

Bushey's proposed decision would allow for the utilities -- Pacific Gas and Electric Co. (PG&E), Las Vegas, NV-based Southwest Gas Corp., and the two Sempra Energy utilities, Southern California Gas Co. (SoCalGas) and San Diego Gas and Electric Co. (SDG&E) -- to file rate proposals for recovering the estimated costs of the programs and to outline timelines for completing the work, which could take years.

A PG&E utility spokesperson called the proposed decision "a positive step in raising the public safety bar," noting that the utility's greatest priority remains the safe and reliable operation of its gas pipeline system. The Sempra utilities said they were "encouraged" by the proposed decision and the inclusion of technical workshops to develop the utility implementation plans. In the meantime, more documentation for hydrostatically tested pipe has been uncovered by the Sempra utilities, they reported in a letter sent to the CPUC last Monday.

Unusual emphasis is being placed on this proceeding as part of the CPUC's and federal government's response to the rupture and explosion of a PG&E gas transmission pipeline in San Bruno, CA, last year. In particular, PG&E has been scrambling to address federal, state and local community concerns, and the effort eroded its first quarter earnings results (see Daily GPI, May 5). It is still facing fines from the CPUC.

The proposed order recognizes that the CPUC will be asking the major gas utilities to undertake a task that will take years and require an unprecedented amount of pipeline inspections and manipulations, including the use of pressure reductions in some segments. Ultimately, each of the operators' pipelines at the end of the implementation program must have all pipeline segments covered in the CPUC order pressure tested with "traceable, verifiable and complete records" readily available, and where warranted, be capable of accommodating inline inspection devices inside the pipe segments.

The proposed decision said the utility plans "must include interim safety enhancement measures, including increased patrols and leak surveys, pressure reductions, prioritization of pressure testing for critical pipelines that must run at or near maximum allowable operating pressure [MAOP] values which result in hoop stress levels at or above 30% 'specified minimum yield stress [SMYS],' and other such measures that will enhance public safety."

The implementation plans are to assure that all in-service gas transmission pipelines operating in the state have been pressure tested to meet state standards. "[These] implementation plans shall be completed as soon as practicable, due to significant public safety concerns and must include interim safety enhancement measures as described," the proposed decision said.

Bushey noted in the proposed decision that PG&E must complete its current work on the determination of MAOP through a pipeline features analysis and apply that analysis to imposing additional pressure reductions on parts of its system as needed, pending the eventual replacement or testing work. The utility is currently squabbling with CPUC safety staff over the adequacy of its approach to making these determinations (see Daily GPI, April 29).

Given the highly technical nature of this proposed order, the ALJ has provided for a series of CPUC-sponsored workshops to be held prior to the utility implementation plans being unleashed "to assist the operators in prioritizing segments in their implementation plans."

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