AGA Perspectives on DA

1. AGA Perspectives on DA OPS Direct Assessment Workshop November 4, 2003 Houston, TX Paul Gustilo American Gas Association pgustilo@aga.org 202-824-7335

2. Presentation Outline • General Outlook • DA Challenges • Review of Legislative/Regulatory Deadlines • Use of ECDA • Research and Demonstration Efforts • Confirmatory Direct Assessment (CDA) as a re-assessment method • Path forward

3. General Outlook on DA • Majority of LDCs will rely on DA (primarily ECDA) to meet legislative and regulatory mandates • Mandates are forcing a steep learning curve on the application of DA • Many challenges - industry is committed to working with stakeholders on meeting challenges

4. Some DA Challenges • Refining applicability and limitations of DA • Gaining confidence of regulators on applicability and limitations of DA • Meeting demand for DA services (particularly ECDA) • Coordination among stakeholders (gov’t & industry)

5. Some DA Challenges • Development and maintenance of DA standards • Maintaining flexibility on applying the DA standards, i.e. variations in testing protocols

6. Review of Legislation/Regulation Key Dates(assuming a Dec. 17, 2003 FR) Re-assessment: every 7 years *** TPSSC/OPS meeting discussion (transcripts) indicate support for providing DA the same schedule as ILI and testing. NPRM indicates DA is on a shorter schedule.

7. ECDA – Users Based on OPS Cost Benefit Report: • Potentially 35 pipeline companies (interstate) • Potentially 240 LDCs and intrastate pipeline operators • Potential application of ECDA for baseline assessment ~ 12,500 miles

8. Possible Outlook on use of ECDA(Potentially 275 Operators by 2012) ~275? Chart for Illustrative Purposes Only. Main point: Expect a ramp up in need for service providers near deadlines No. Of Operators Using ECDA 2009 is when re-assessments will likely be required. 15-20? 2002 2007 2009 2012 Year

9. Possible Outlook on use of ECDA(12,500 Miles by 2012) Chart for Illustrative Purposes Only. Main point: Expect a ramp up in need for service providers near deadlines 2,000? 1,400 Miles Assessed Per Year 2009 is when re-assessments will likely be required 200? 2002 2007 2009 2012 Year

10. DA Research/Demonstration • PRCI/GTI ECDA and ICDA Efforts, 2000-2002, 2003-2004 (OPS supporting some of these projects) • Keyspan Energy ECDA projects • PG&E ECDA projects • Northeast Gas Association (NGA) ECDA Effort, 2001-2002 (Phase I) • NGA ECDA and ICDA efforts, 2003-2004

11. DA Research/Demonstration, Cont. • GTI/AGA LDC ECDA Effort (Phase I), 2002-2003 • GTI/AGA LDC ECDA (Phase II), ICDA (Phase III) – both projected for 2004

12. GTI/AGA LDC ECDA Research/Demonstration • 30 LDCs participating • 6 Field Demonstrations (IL, MI, MS, PA, TX, OK) • Regulators from OPS and state representatives from CA, CT, IL, MI, MS, NY, PA, TX, and VT have observed field work • Detailed 50+ page protocol developed • Development of “Yellow Pages” of DA related service providers (~ 100 companies listed)

13. 7 Yrs - CDA 7 Yrs - CDA 7 Yrs - CDA ?? ?? ?? CDA – Use in Re-assessment Schedule (Table 3 ASME B31.8S, Intervals for Time Dependent Threats)

14. Path Forward • Continue research and demonstration (ECDA, ICDA, SCC DA) • Provide opportunities for regulators to observe DA process (begin to end) • Refine standards based on lessons learned on use of DA • Provide opportunities for service providers and operators to communicate • Coordinate/communicate DA activities among stakeholders (regulators, researchers, operators, service providers, etc.)