Requires gas corporations to file a plan with the public service commission addressing aging or leaking pipelines within their service territory; outlines plans for the replacement of such pipelines.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2692
SPONSOR: Hyndman (MS)
 
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:
Section 1 amends the public service law by adding a new section, 63-gg
called Pipeline modernization and consumer protection. Part 1 estab-
lishes the definition of "gas pipeline facility", which is a distrib-
ution facility and gas utility.
Part 2 establishes that each operator of a gas pipeline facility will
accelerate the repair, rehabilitation, and replacement of gas piping or
equipment that is: (a) leaking; or (b) may pose high risks of leaking,
or may no longer be fit for service, because of: (i) inferior materi-
als,(ii) poor construction practices, (iii) lack of maintenance, or (iv)
age.
Part 3 establishes that in complying with subdivision two of this
section, the commission shall: (a) develop prioritized timelines to
repair all leaks based on the severity of the leak; (b) adopt a cost-re-
covery program; (c) adopt a standard definition and methodology for
calculating and reporting unaccounted for gas to improve data quali-
ty;(d) adopt limits on cost recovery for the lost and unaccounted for
gas; and (e) require the use of the best available technology to detect
gas leaks.
Part 4 establishes that the New York State energy research and develop-
ment authority will issue non-binding guidelines to identify the best
practices for classifying high-risk pipeline infrastructure and leaks
for repair or replacement. This will take place no later than one year
after the effective date.
Part 5 establishes that the New York State energy research and develop-
ment authority and the commission, no later than a year after the effec-
tive date, will create and publish forms that adopt a standard defi-
nition and methodology for calculating and reporting unaccounted for
gas.
Part 6 establishes that operators of gas pipeline facilities in cities
with a population of one million or more shall establish a database of
pipeline infrastructure that will be shared with the coordinated build-
ing inspection date analysis.
 
JUSTIFICATION:
Federal requirements related to repairing pipeline leaks are limited to
hazardous leaks, which are leaks that represent an existing or probable
hazard to persons cr property and require immediate repair. There are
no Federal requirements to address slower or less hazardous leaks, which
can allow the leaks to persist =repaired indefinitely. According to the
Pipeline and Hazardous Materials Safety Administration, the United
States natural gas distribution system still includes 61,000 miles of
bare steel pipe without adequate corrosion protection and 32,000 miles
of cast iron pipe, which was installed beginning in the 1830s and can be
prone to failure. Major recent pipeline explosions that led to human
fatalities occurred in: Austin, Texas; Philadelphia, Pennsylvania; and
Allentown, Pennsylvania. These explosions were the result of aging,
leaking, and high-risk pipeline infrastructure. This bill will help
create a higher standard of safety in terms of pipe-line infrastructure
and will lower the cost of the rate that consumers have to pay for lost
and unaccounted for gas. This bill will also help to improve the envi-
ronment by limiting the amount of natural gas that leaks out of faulty
pipelines.
 
PRIOR LEGISLATIVE HISTORY:
A656 2017/18-referred to Corporations, Authorities and Commissions
 
FISCAL IMPLICATIONS:
Likely costs related to administrative work of the Department of Public
Service.
 
EFFECTIVE DATE:
This bill shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
2692
2023-2024 Regular Sessions
IN ASSEMBLY
January 26, 2023
___________
Introduced by M. of A. HYNDMAN, PEOPLES-STOKES, COOK, HUNTER, WALKER,
JOYNER -- Multi-Sponsored by -- M. of A. GLICK -- read once and
referred to the Committee on Energy
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 twenty-four; (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.
18 (c) "Gas infrastructure rate plan" shall mean a pipeline replacement
19 program construction plan that a gas corporation files with the commis-
20 sion pursuant to subdivision two of this section.
21 (d) "Project" shall mean an eligible pipeline replacement project
22 proposed by a gas corporation in a plan filed under this section.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04525-01-3
A. 2692 2
1 2. A gas corporation shall file with the commission a plan to address
2 aging or leaking pipeline within its respective service territory in the
3 interest of public safety and reducing lost and unaccounted for gas
4 through a reduction in gas leaks. The filing of the plan required pursu-
5 ant to this subdivision shall be submitted no later than the thirty-
6 first of October, two thousand twenty-four.
7 3. (a) Any plan filed with the commission shall include, but not be
8 limited to: (i) eligible pipeline replacement of mains, service lines,
9 metering sets, and other ancillary facilities composed of non-cathodi-
10 cally protected steel, cast iron, wrought iron, and any other material
11 the commission deems leak-prone, prioritized to implement the federal
12 gas distribution pipeline integrity management plan annually submitted
13 to the commission and consistent with subpart P of 49 C.F.R. part 192;
14 (ii) an anticipated timeline for the completion of each project; (iii)
15 the estimated cost of each project; (iv) rate change requests; (v) a
16 description of customer costs and benefits under the plan; and (vi) any
17 other information the department considers necessary to evaluate the
18 plan.
19 (b) Upon the filing of the plan required under this section, a gas
20 corporation shall include a timeline for removing all leak-prone pipe-
21 line on an accelerated basis, specifying an annual replacement pace and
22 program end date with a target end date of either: (i) not more than
23 twenty years; or (ii) a reasonable target end date considering the
24 allowable recovery cap established pursuant to subdivision six of this
25 section. The commission shall not approve a timeline as part of a plan
26 unless the allowable recovery cap established pursuant to subdivision
27 six of this section provides the gas corporation with a reasonable
28 opportunity to recover its expenditures related with removing all leak-
29 prone infrastructure and the accelerated basis set forth under the time-
30 line utilizing the cost recovery mechanism established pursuant to this
31 section. After filing the initial plan, a gas corporation shall, no
32 later than the thirty-first of October of each succeeding year, at annu-
33 al intervals, provide the commission with a summary of its replacement
34 progress to date, a summary of work to be completed during the subse-
35 quent year and any additional information the commission may require.
36 The commission may require a gas corporation to file an updated long-
37 term timeline as part of a plan if it alters the cap established pursu-
38 ant to subdivision six of this section.
39 4. If a gas corporation files a plan on or before October thirty-first
40 for the subsequent construction year, the commission shall review the
41 plan within six months. The plan shall be effective as of the date of
42 the filing, pending commission review. The commission may modify a plan
43 prior to approval at the request of a corporation or make other modifi-
44 cations to a plan as a condition of approval. The commission shall
45 consider the costs and benefits of the plan including, but not limited
46 to, ratepayer impact, with special consideration of customers receiving
47 assistance through the home energy assistance plan, reductions of lost
48 and unaccounted for gas through a reduction in gas leaks and improve-
49 ments to public safety. The commission shall give priority review and
50 give preliminary acceptance to plans specifically designed to address
51 leak-prone pipeline most immediately in need of replacement, based on
52 standards established by the commission.
53 5. If the commission determines a plan is in compliance with the
54 requirements of this section and would reasonably accelerate pipeline
55 replacements and provide benefits, the commission shall issue acceptance
56 in whole or in part. A gas corporation shall then be authorized to begin
A. 2692 3
1 recovery of the estimated costs of projects included in the plan begin-
2 ning on May first of the year following the initial filing and collect
3 any revenue requirement, including depreciation, property taxes and
4 return associated with the plan.
5 6. On or before May first of each year, a gas corporation shall file
6 final project documentation for projects completed in the prior year to
7 demonstrate substantial compliance with the plan approved pursuant to
8 subdivision five of this section and that all project costs were reason-
9 ably and prudently incurred. The commission shall investigate project
10 costs within six months of submission and shall approve and reconcile
11 the authorized rate factor, if necessary, upon a determination that the
12 costs were reasonable and prudent. Annual changes in the revenue
13 requirement eligible for recovery shall not exceed one-and-one half
14 percent of the gas corporation's most recent calendar year of total firm
15 revenues, including revenues attributable to transmission and distrib-
16 ution customers. Any revenue requirement approved by the commission in
17 excess of such cap may be deferred for recovery in the following year.
18 7. All rate change requests made to the commission pursuant to an
19 approved plan shall be filed annually on a fully reconciling basis,
20 subject to acceptance by the commission pursuant to subdivision five of
21 this section. The rate change included in a plan pursuant to subdivision
22 three of this section, reviewed pursuant to subdivision five of this
23 section and taking effect on May first pursuant to subdivision six of
24 this section shall be subject to review by the commission, to determine
25 whether the gas corporation has over-collected or under-collected its
26 requested rate adjustment with any such discrepancies reconciled on an
27 annual basis. If the commission determines that any of the costs were
28 not reasonably or prudently incurred by a gas corporation, the commis-
29 sion shall disallow the costs and direct the gas corporation to refund
30 the full value of the costs charged to customers with the appropriate
31 carrying charges on the over-collected amounts. If the commission deter-
32 mines that any of the costs were not in compliance with the approved
33 plan, the commission shall disallow the costs from the cost recovery
34 mechanism established under this section and shall direct the gas corpo-
35 ration to refund the full value of the costs charged to customers with
36 the appropriate carrying charges on the over-collected amounts.
37 8. The commission may promulgate any rules and regulations necessary
38 to effectuate the pipeline replacement program pursuant to this section.
39 The commission may discontinue the replacement program and require a gas
40 corporation to refund any costs charged to customers due to failure to
41 substantially comply with a plan or failure to reasonably and prudently
42 manage project costs.
43 § 2. This act shall take effect immediately.