A07965 Summary:

COSPNSRCook, Lifton, Mosley, Galef, Cahill, Joyner, Colton, Peoples-Stokes, Richardson, Robinson, Bichotte, Hunter, Otis, Walker
MLTSPNSRBraunstein, Buchwald, Glick, Lopez, Skartados, Steck
Add §68-b, Pub Serv L
Requires gas corporations to file a plan with the public service commission addressing aging or leaking pipelines within their service territory and outlining plans for the replacement of such pipelines.
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A07965 Actions:

06/02/2015referred to corporations, authorities and commissions
01/06/2016referred to corporations, authorities and commissions
05/17/2016amend and recommit to corporations, authorities and commissions
05/17/2016print number 7965a
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A07965 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Rodriguez
  TITLE OF BILL: An act to amend the public service law, in relation to requiring gas corporations to file a plan addressing aging or leaking pipelines within their service territory   PURPOSE OR GENERAL IDEA OF BILL: To require gas corporations to develop strategic pipeline infrastructure replacement.   SUMMARY OF SPECIFIC PROVISIONS: This legislation would amend Public Service law by creating a new § 68-b. This legislation would: -Provides definitions, including; "eligible infrastructure replacement" and "gas infrastructure rate plan"; -Require gas corporations to file with the Public Service Commission (PSC) a plan to address aging or leaking pipeline. Such plan would be required to: *Prioritize the replacement of aged and leak prone pipeline, including *Pipeline made of cast iron and wrought iron; *Include a timeline for removing leak prone pipeline; and, -Require the PSC to review each gas corporation's plan within six months of its filing. In reviewing the plan, the PSC would be required to consider ratepayer impact, the reduction of lost or unaccounted gas and improvements to public safety. -Require a gas corporation to file an annual summary with project documentation for projects performed within the previous year; -Direct the PSC to allow gas corporations to recover charges for infras- tructure replacement projects up to one-and-one half percent each corpo- ration's annual revenues, including revenues from transmission and distribution customers.   JUSTIFICATION: New York's gas corporations are responsible for the maintenance of thou- sands of miles of gas pipeline infrastructure, much of which has outlived its useful life. According to a March 23, 2014 article published in the New York Times, nearly half of the gas mains operated by two of New York's major gas corporations were installed prior to 1940, most of which are constructed from cast iron, wrought iron or unprotected steel. These materials are vulnerable to stress and frac- ture. Vulnerable pipeline infrastructure including service mains and pipes creates significant safety hazards, particularly combustion. This legislation is intended to ensure that gas corporations identify and replace vulnerable pipelines - many of which run beneath busy streets and residential areas. This bill would accelerate current pipeline replacement programs and reduce the amount of lost gas, providing a significant savings to customers. For additional information on this topic, see the Public Service Commission's proceeding entitled a "Proceeding on Motion of the Commission to Consider Implementation of a Recovery Mechanism to Support the Accelerated Replacement of Infrastruc- ture on the Natural Gas System," case number 15-00652.   PRIOR LEGISLATIVE HISTORY: none   FISCAL IMPLICATIONS: Likely costs related to administrative work of the Department of Public Service.   EFFECTIVE DATE: This bill shall take effect immediately.
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A07965 Text:

                STATE OF NEW YORK
                               2015-2016 Regular Sessions
                   IN ASSEMBLY
                                      June 2, 2015
        Introduced  by  M. of A. RODRIGUEZ, COOK, LIFTON, MOSLEY, GALEF, CAHILL,
          -- Multi-Sponsored by -- M. of A. BRAUNSTEIN, BUCHWALD, GLICK,  LOPEZ,
          SKARTADOS,  STECK -- read once and referred to the Committee on Corpo-
          rations, Authorities and Commissions -- recommitted to  the  Committee
          on Corporations, Authorities and Commissions in accordance with Assem-
          bly  Rule  3,  sec.  2  -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to said committee
        AN ACT to amend the public service law, in  relation  to  requiring  gas
          corporations  to  file  a  plan  addressing aging or leaking pipelines
          within their service territory
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  The public service law is amended by adding a new section
     2  68-b to read as follows:
     3    § 68-b. Aging or leaking pipelines. 1. Definitions. For  the  purposes
     4  of  this section, the following words, shall, unless the context clearly
     5  requires otherwise, have the following meanings:
     6    (a) "Customer" shall mean a retail customer receiving end use  service
     7  from a gas corporation.
     8    (b)  "Eligible infrastructure replacement" shall mean a replacement or
     9  an improvement of existing pipeline of  gas  corporation  that:  (i)  is
    10  performed  on  or  after  January first, two thousand seventeen; (ii) is
    11  designed to improve public  safety  and/or  infrastructure  reliability;
    12  (iii)  does  not increase the revenue of a gas corporation by connecting
    13  an improvement or installing new pipeline for the principal  purpose  of
    14  serving  new  customers;  (iv)  reduces, or has the potential to reduce,
    15  lost and unaccounted for gas through a reduction in gas leaks;  and  (v)
    16  is  not  included  in  the  approved rate base of the gas corporation as
    17  determined in the gas corporation's most recent approved rate plan.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 7965--A                          2
     1    (c) "Gas infrastructure rate plan" shall mean a  pipeline  replacement
     2  program  construction plan that a gas corporation files with the commis-
     3  sion pursuant to subdivision two of this section.
     4    (d)  "Project"  shall  mean  an  eligible pipeline replacement project
     5  proposed by a gas corporation in a plan filed under this section.
     6    2. A gas corporation shall file with the commission a plan to  address
     7  aging or leaking pipeline within its respective service territory in the
     8  interest  of  public  safety  and  reducing lost and unaccounted for gas
     9  through a reduction in gas leaks. The filing of the plan required pursu-
    10  ant to this subdivision shall be submitted no  later  than  the  thirty-
    11  first of October, two thousand seventeen.
    12    3.  (a)  Any  plan filed with the commission shall include, but not be
    13  limited to: (i) eligible pipeline replacement of mains,  service  lines,
    14  metering  sets,  and other ancillary facilities composed of non-cathodi-
    15  cally protected steel, cast iron, wrought iron, and any  other  material
    16  the  commission  deems  leak-prone, prioritized to implement the federal
    17  gas distribution pipeline integrity management plan  annually  submitted
    18  to  the  commission and consistent with subpart P of 49 C.F.R. part 192;
    19  (ii) an anticipated timeline for the completion of each  project;  (iii)
    20  the  estimated  cost  of  each project; (iv) rate change requests; (v) a
    21  description of customer costs and benefits under the plan; and (vi)  any
    22  other  information  the  department  considers necessary to evaluate the
    23  plan.
    24    (b) Upon the filing of the plan required under  this  section,  a  gas
    25  corporation  shall  include a timeline for removing all leak-prone pipe-
    26  line on an accelerated basis, specifying an annual replacement pace  and
    27  program  end  date  with a target end date of either:  (i) not more than
    28  twenty years; or (ii) a  reasonable  target  end  date  considering  the
    29  allowable  recovery  cap established pursuant to subdivision six of this
    30  section.  The commission shall not approve a timeline as part of a  plan
    31  unless  the  allowable  recovery cap established pursuant to subdivision
    32  six of this section provides  the  gas  corporation  with  a  reasonable
    33  opportunity  to recover its expenditures related with removing all leak-
    34  prone infrastructure and the accelerated basis set forth under the time-
    35  line utilizing the cost recovery mechanism established pursuant to  this
    36  section.  After  filing  the  initial  plan, a gas corporation shall, no
    37  later than the thirty-first of October of each succeeding year, at annu-
    38  al intervals, provide the commission with a summary of  its  replacement
    39  progress  to  date,  a summary of work to be completed during the subse-
    40  quent year and any additional information the  commission  may  require.
    41  The  commission  may  require a gas corporation to file an updated long-
    42  term timeline as part of a plan if it alters the cap established  pursu-
    43  ant to subdivision six of this section.
    44    4. If a gas corporation files a plan on or before October thirty-first
    45  for  the  subsequent  construction year, the commission shall review the
    46  plan within six months. The plan shall be effective as of  the  date  of
    47  the  filing, pending commission review. The commission may modify a plan
    48  prior to approval at the request of a corporation or make other  modifi-
    49  cations  to  a  plan  as  a  condition of approval. The commission shall
    50  consider the costs and benefits of the plan including, but  not  limited
    51  to,  ratepayer impact, with special consideration of customers receiving
    52  assistance through the home energy assistance plan, reductions  of  lost
    53  and  unaccounted  for  gas through a reduction in gas leaks and improve-
    54  ments to public safety. The commission shall give  priority  review  and
    55  give  preliminary  acceptance  to plans specifically designed to address

        A. 7965--A                          3
     1  leak-prone pipeline most immediately in need of  replacement,  based  on
     2  standards established by the commission.
     3    5.  If  the  commission  determines  a  plan is in compliance with the
     4  requirements of this section and would  reasonably  accelerate  pipeline
     5  replacements and provide benefits, the commission shall issue acceptance
     6  in whole or in part. A gas corporation shall then be authorized to begin
     7  recovery  of the estimated costs of projects included in the plan begin-
     8  ning on May first of the year following the initial filing  and  collect
     9  any  revenue  requirement,  including  depreciation,  property taxes and
    10  return associated with the plan.
    11    6. On or before May first of each year, a gas corporation  shall  file
    12  final  project documentation for projects completed in the prior year to
    13  demonstrate substantial compliance with the plan  approved  pursuant  to
    14  subdivision five of this section and that all project costs were reason-
    15  ably  and  prudently  incurred. The commission shall investigate project
    16  costs within six months of submission and shall  approve  and  reconcile
    17  the  authorized rate factor, if necessary, upon a determination that the
    18  costs were  reasonable  and  prudent.  Annual  changes  in  the  revenue
    19  requirement  eligible  for  recovery  shall  not exceed one-and-one half
    20  percent of the gas corporation's most recent calendar year of total firm
    21  revenues, including revenues attributable to transmission  and  distrib-
    22  ution  customers.  Any revenue requirement approved by the commission in
    23  excess of such cap may be deferred for recovery in the following year.
    24    7. All rate change requests made to  the  commission  pursuant  to  an
    25  approved  plan  shall  be  filed  annually on a fully reconciling basis,
    26  subject to acceptance by the commission pursuant to subdivision five  of
    27  this section. The rate change included in a plan pursuant to subdivision
    28  three  of  this  section,  reviewed pursuant to subdivision five of this
    29  section and taking effect on May first pursuant to  subdivision  six  of
    30  this  section shall be subject to review by the commission, to determine
    31  whether the gas corporation has over-collected  or  under-collected  its
    32  requested  rate  adjustment with any such discrepancies reconciled on an
    33  annual basis. If the commission determines that any of  the  costs  were
    34  not  reasonably  or prudently incurred by a gas corporation, the commis-
    35  sion shall disallow the costs and direct the gas corporation  to  refund
    36  the  full  value  of the costs charged to customers with the appropriate
    37  carrying charges on the over-collected amounts. If the commission deter-
    38  mines that any of the costs were not in  compliance  with  the  approved
    39  plan,  the  commission  shall  disallow the costs from the cost recovery
    40  mechanism established under this section and shall direct the gas corpo-
    41  ration to refund the full value of the costs charged to  customers  with
    42  the appropriate carrying charges on the over-collected amounts.
    43    8.  The  commission may promulgate any rules and regulations necessary
    44  to effectuate the pipeline replacement program pursuant to this section.
    45  The commission may discontinue the replacement program and require a gas
    46  corporation to refund any costs charged to customers due to  failure  to
    47  substantially  comply with a plan or failure to reasonably and prudently
    48  manage project costs.
    49    § 2. This act shall take effect immediately.
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