Distribution Integrity Management Program

1. Distribution Integrity Management Program DIMP 2007/08

2. DISTRIBUTION INTEGRITY MANAGEMENT PROGRAM RULEMAKING AUTHORITY Not later than December 31, 2007, the Secretary shall prescribe minimum standards for integrity management programs for distribution pipelines. May require operators of distribution pipelines to continually identify and assess risks on their distribution lines, to remediate conditions that present a potential threat to line integrity, and to monitor program effectiveness.

3. Motivation for Pursuing Distribution Safety Improvements • Hazardous liquid IM rule published in 2000 • Gas transmission IM rule published in 2003 • AGF study (in 2004) concluded that distribution safety is consistent with transmission • DOT IG testified to Congress (in 2004) that DOT should pursue distribution system safety improvements • DOT required to report to appropriations committees (in 2005) on how IMP elements can be applied to distribution

4. American Gas Foundation (AGF) Study • Independent Report: Safety Performance and Integrity of the Natural Gas Distribution Infrastructure • Included State Regulators and Utility Operators • Incidents analyzed over a 12-year period (1990 – 2002) • Compared distribution and transmission systems 4

5. AGF Findings • 62% of incidents are property damage only (no fatalities or injuries) • Excavation or outside force damage is the leading cause of incidents • All identified threats currently addressed by regulatory measures and/or industry practices, often in multiple ways • Distribution systems differ significantly from transmission systems – similar approach to integrity management is not appropriate

6. Distribution IMP – Phase 1 • OPS Formed DIMP Team after IG Challenge • DIMP Team met March and May,2005 • Report to Congress filed June ’05 • Public Meeting June 16 – EFV’s • DIMP public meeting Sept., 2005 • GPTC asked to Develop Guide Material during Rule Development

7. Phase 1 Findings • Distribution pipelines are generally safe but there are opportunities for improvement • Impractical to apply transmission IMP to distribution systems • Integrity management should apply to all distribution pipelines IMP

8. Phase 1 Findings • Excavation damage is leading cause of distribution incidents • Federal legislation is needed to support the development and implementation of comprehensive damage prevention programs at the state level • Requires a partnership of all stakeholders

9. Phase 1 Findings • EFVs can be a valuable incident mitigation option but it should not be appropriate to mandate EFVs under DIMP • Management of leaks is fundamental to management of risk and an effective leak management program is vital to risk control

10. Moving Forward (Phase 2) • Most desirable option to implement DIMP; A high level, flexible federal regulation done in conjunction with: • Implementation guidance • Federal legislation to help develop and implement comprehensive state damage prevention programs • National 3-digit calling (811) • Continued R & D

11. DIMP Phase 2 Three Parallel Paths 1. Rulemaking 2. Legislation 3. Guidance

12. Rulemaking • PHMSA is currently finalizing NPRM • “High level” regulation • Rule will have a “significant” impact

13. Expected Schedule • NPRM publication ~ March/April ‘08 • 90-Day Comment Period (not 60) • GPTC Guidelines Written (pending NPRM publication) • DIMP Final Rule ~ Fall 2008 • Implementation Period

14. PHMSA’s Latest Count • >200 Large Distribution Operators • Nearly 1100 Smaller Operators • 8000+ Master Meter and LPG Operators

15. 2. Legislation PIPES 2006 -- • Mandated DIMP by 12/31/07 • Mandated EFVs by 6/01/08 • Promoted Improvements to One-Call Legislation and 3rd Party Damage Prevention • Provided Funds to Promote 811

16. 3. Guidance • GPTC asked to develop guidance describing approaches to implement regulation • Draft Guidance pending NPRM Publication • APGA, with PHMSA funding, is developing a model DIMP plan (SHRIMP, for Simple Handy Risk-based Integrity Management Program) for small operators • PHMSA proposed rule will include simple guidance concepts for MM and LPG operators

17. Challenges in Creating DIMP Rule and Guidance Material • One size rarely fits all in gas distribution • Flexibility in how different states will implement elements of rule • Many options available – operator’s choice • Minimize justifying non-use of some options • Avoid forcing inefficient use of customer $ • In some cases, “doing more” may not be needed

18. DIMP =“Process” Regulation • Formal Written Program • Management Commitment & Support • Defined Roles & Responsibilities • Use of Industry Standards/Guidelines • Long-term vs. Short-term Approach • Monitoring Progress • Periodic Formal Evaluation & Review • Management of Change • Continuous Improvement

19. Mission- Enhance Safety • Develop a risk based approach • Identify • Risks to the system – (understand the infrastructure, identify and characterize the threats) Maps & Records • Risk control options – (prevention, detection and mitigation and/or replacement) Process

20. 7 Key Elements of DIMP Rule • Develop and implement a written IM plan. • Know the infrastructure. • ID threats. • Assess and prioritize risks. • ID and implement appropriate measures to mitigate risks. • Measure performance, monitor results, evaluate the effectiveness and make changes as needed. • Periodically report performance measures.

21. Element 1: Written Plan • Develop a Written Plan to Address Seven Elements • Tailor Plan to Fit Operator’s System or Systems • Use Available Guidance (GPTC, SHRIMP, Other) • Include Application/Use of EFVs • Don’t Procrastinate

22. Element 2 : Know the Infrastructure • Materials • Type of construction • Operating conditions • Other relevant factors within surroundings • Use best information available to make decisions about what is in the system • Don’t have to dig up system to collect data • Update information as new or better data becomes available • Be Creative and Innovative • Don’t Procrastinate

23. Know the Infrastructure DOT Annual Report Information • Includes basic information on what is in the system • Material, diameter, # of services, installation decade, leaks eliminated/repaired during the year • Use and compare reports from previous years

24. Know the Infrastructure Knowledge of What is Happening in the System • Review data gathered through O&M activities, as well as special field surveys or patrols • Field personnel may be the best source of local system knowledge and what is happening in and to the system

25. Know the Infrastructure • Review data gathered through O&M activities, as well as special field surveys or patrols * Leaks * Repairs * Maintenance * Failures * Damages * Pipe condition * Work records * Corrosion inspections * Personnel performance evaluations, etc.

26. Element 3 : Identify Threats to Address Associated Risks • Know the System Before You ID Threats • Threats may vary based on the makeup and location of the system • Different materials should be analyzed relative to the eight primary threats • Review past incidents and accidents

27. Eight Primary Threats • Corrosion • Natural forces • Excavation • Other outside force damage • Material or welds • Equipment • Operations • Other

28. Things to Consider • Does the threat exist throughout the system (general) or is it limited to a certain geographic region or material (local)? • Consider subdividing the primary threats into sub-categories to better assess the relevance of a threat • Ask questions to define or eliminate a threat

29. Examples of Corrosion Sub-Category Threats • External corrosion – bare steel • External corrosion – cast iron • External corrosion – coated & wrapped pipe • External corrosion – other metallic materials • Internal corrosion • Atmospheric corrosion

30. Element 4 : Assess and Prioritize Identified Risks

31. What is Risk? Risk is the product of the likelihood of a problem occurring and the consequences that could be caused by the problem if it occurs. Risk = Likelihood x Consequences

32. Purpose of Risk Evaluation • Determine if additional risk management practices are needed for the identified threats, • Result should show relative risk ranking of facilities (pipe or components) relative to other facilities or groups of facilities. (i.e. bare steel versus coated steel or plastic) • Two general approaches: • Use of subject matter experts (SMEs) • Use of mathematical (algorithm) methods

33. Sample Relative Risk Calculation *Determined by Operator

34. Example: Group Facilities Group facilities into categories (buckets) based on common traits and problems. Examples:

35. Good Facilities May be Excluded Facilities or groups of facilities that do not experience problems may be removed from the risk evaluation and no further action taken (except excavation threats)!

36. Element 5: Identify and Implement Appropriate Techniques to Manage Risk

37. Manage Risk Based on the results of the relative risk ranking, implement appropriate techniques to manage risk. • Facilities or groups of facilities with low relative risk management techniques. • Facilities or groups of facilities with high relative risk will require additional risk management techniques.

38. Risk Management • Risk management techniques and practices address the likelihood of a problem occurring or the consequence of a problem. • Risk can be managed by eliminating or reducing the likelihood of a problem occurring or by lessening the consequences of a potential problem.

39. Additional or Accelerated Actions (A/A’s) • Activities that are performed in addition to the requirements of the 192 Code to manage risk. • May implement one or more A/A when addressing one or more of the risks. • Need to identify and rank the risks to the system and determine which risk management techniques and practices are most appropriate.

41. Leak Management Program Five elements: • Locate the leaks in the distribution system. • Evaluate the action or potential hazards associated with the leaks • Act appropriately to mitigate these hazards • Keep records, and • Self-assess to determine if additional actions are necessary to keep people and property safe

42. Element 6 : Measure Performance and Monitor Results

43. Performance Measures • Determine if risk management techniques or practices are effective. • Develop performance measures that match the risk management technique or practice in your DIMP. • Measures may be gathered and tracked for an entire system, specific geographic areas, material type, each facility or group of facilities or other reasonable organization.

44. Performance Measures • Should address specific RM practices in the DIMP. • Should be something that can be counted, tracked, monitored and supported. • Select “a critical few” measurements. • Develop or select performance measures that can use data already collecting or have accumulated. • Where practical, use numeric performance measures. • Do not ignore non-numeric methods.

45. Example Performance Measures Corrosion • Leaks due to external or internal corrosion • Exposed pipe condition reports that found corrosion or coating damage • Repairs required due to non-leaking pitting or coating damage (above/below ground) • CP zones found with low protection levels Excavation • Excavation caused damages (1st/2nd/3rd party) • Damages per 1,000 tickets (normalized damages) • Ratio of ticket no-shows to total tickets received • Failure by notification center to accurately transmit tickets to the operator • Damages by cause, facility type (mains, services) and responsible party

46. Element 7 : Periodically Evaluate and Improve the Program Should include at least 2 activities: • A periodic review of the written DIMP Plan content to ensure it remains accurate and appropriate. • Analysis of the success or effectiveness of risk management techniques, practices, or A/A actions adopted to respond to specific threats.

47. Evaluate and Improve the Program • Review on same frequency as other programs (O&M, OQ, Public Awareness) • Review when major change occurs, (replacement program, all meters go to AMR) • Review performance measures for effectiveness. • Some measures may only need to be reviewed after several years, (CP improvements)

48. Report to Regulators Based on whatever ends up being written into the rule.

49. Questions?