PUC Begins Implementation of New Pipeline Safety Law

The Pennsylvania Public Utility Commission held a workshop on Wednesday, January 4, 2012, to present a summary of Pennsylvania’s new Gas and Hazardous Liquids Pipelines Act (“Act 127”) and to solicit comments and suggestions from industry members and other interested parties about details of the implementation of the Act’s provisions.  The PUC indicated that it will schedule another meeting between its staff and industry representatives in early-mid February to obtain further comments and input as it finalizes its plans for the implementation of the Act.

Act 127, signed into law by Governor Corbett on December 22, 2011 and scheduled to become effective February 20, 2012, expands PUC jurisdiction over pipeline safety to include all intrastate pipeline facilities, not just those of PUC regulated utilities, and vests the PUC with expanded regulatory authority and duties, all of which will be funded by assessments on facility operators.  As explained by Commission staff members during the workshop, the Act authorizes or requires the PUC to take the following actions: (1) exercise gas safety authority over the transportation of gas or hazardous liquids by pipeline or pipeline facilities regulated under federal pipeline safety laws; (2) establish and maintain a registry of all Pennsylvania pipeline operators; (3) determine and collect assessments based on total pipeline mileage; and (4) develop a registration form and charge a registration fee and an annual renewal fee.  Safety regulations enacted by the PUC may not be inconsistent with or more stringent than the minimum standards and regulations adopted under the Federal Pipeline Safety Law.  The Act states that it does not give the PUC “jurisdiction over any pipeline operator for purposes of rates or ratemaking . . . .”

Of particular interest to attendees at the workshop was the assessment process and the calculation of total pipeline mileage for assessment purposes.  Several industry representatives noted that it may be very difficult to provide this information with respect to older lines due to a lack of accurate records.  Commission staff noted that the PUC recognizes this as a legitimate concern and would expect a good faith, best estimate only for such facilities.  The PUC further noted that it anticipates an annual budget requirement associated with the implementation and enforcement of the Act of approximately $1.5 million.  The PUC will assess pipeline operators on an annual basis based upon the total pipeline mileage reported by them.

The Commission expects to announce the time and date of its next workshop meeting in the very near future.

A copy of Act 127 is attached.

Act 127

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