Idaho-based Intermountain Gas Co., owned by MDU Resources Group, is seeking regulatory approval in the state for a planned $158 million pipeline integrity management program.
Earlier this year the Idaho Public Utilities Commission (PUC) accepted the utility's infrastructure integrity management mechanism for recovering costs of pipeline maintenance and upgrades.
A PUC spokesperson said Friday regulators are expected to act on the proposal later this month.
The funding mechanism is considered a way to permit Intermountain Gas to accelerate its efforts to assess and replace aging infrastructure.
Intermountain has created separate integrity management programs for transmission and distribution pipeline systems.
In outlining its program for the PUC, Intermountain engineers discussed the proposed rule of the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA), which would require the use of automatic and remotely controlled shut-off valves.
The 600 miles of pipe identified for replacement is in southern Idaho, and it represents about 5% of Intermountain's 12,700 miles of pipelines, a MDU Resources spokesperson said.
PUC staff is recommending the three-member commission reject the utility's proposal, arguing that Intermountain has not proved that the costs be dealt with outside the normal general rate case process.
"The costs are not volatile, unpredictable, related to the acquisition of energy efficiency, or urgent enough to warrant an annual adjustment mechanism," staff concluded.
On the distribution side, low-pressure, small diameter pipelines are the target of efforts to replace aging pipes made of a plastic material named Aidyl-A, which has been associated in recent years with some explosions and fires in the Pacific Northwest.
The case relates to one in Washington state, where regulators in 2011 assessed Spokane-based Avista Utilities a $200,000 fine following a December 2008 distribution pipeline explosion and fire. Investigators concluded that the explosion was caused by a leak from a cracked section of plastic natural gas distribution pipeline that may have been improperly installed.
Other incidents were drivers for Intermountain's program, which also recognizes that PHMSA has been pushing for more proactive work among pipeline operators nationally.
Last Wednesday Washington state regulators approved an updated settlement agreement allowing $500,000 of penalties to be waived in the case of another MDU Resources utility, Kennewick, WA-based Cascade Natural Gas Corp., which is trying to correct past violations after it was unable to provide required pipeline documentation on 40% of its transmission system.
Originally, Cascade paid $1 million of a $2.5 million penalty, with the remaining $1.5 million suspended on the condition that it comply with provisions of the settlement. In the updated agreement, the UTC said Cascade had demonstrated a commitment to compliance to have the rest of the penalty waived.