Natural gas bill on gov’s desk
PITTSFIELD -- A bill that tightens regulation of natural gas line maintenance, repair and replacement -- and could lead to a statewide infrastructure upgrade -- has passed the Legislature and reached the desk of Gov. Deval Patrick.
The bill was approved by the House and Senate last week. Sen. Ben Downing, D-Pittsfield, chairman of the Joint Committee on Telecommunications, Utilities and Energy, said he expects the governor to sign the legislation.
"We worked closely with the administration on this, and there is every indication the governor will sign it," Downing said.
The bill covers some 5,000 miles of gas line infrastructure across Massachusetts, controlled by Berkshire Gas Co., National Grid, NStar, Columbia Gas of Massachusetts and other utilities. It does not cover the interstate gas lines, such as those owned by Tennessee Gas Pipeline Co., which are regulated at the federal level.
The bill will address "public safety concerns and greenhouse gas emissions, helping us to meet our global warming goals," Downing said. "And it will promote economic development because it will create jobs and put people to work."
In addition to reducing the release of methane, a greenhouse gas, preventing leaks could lower the cost to consumers in the form of lower utility bills.
Berkshire Gas Co. spokesman Christopher Farrell said the company, which operates in three Western Massachusetts counties, views the bill favorably, particularly sections that could speed up replacement of aging infrastructure and allow expansion of gas service to new areas.
"We think it is a well-balanced piece of legislation," Farrell said, "both for the industry and for the consumers. I give Ben Downing a lot of credit. It was not an easy bill to [craft and have enacted]."
The legislation requires gas companies to conduct annual inspections of their infrastructure and identify leaks, classifying them as Grade 1, 2 or 3 level leaks, and to file reports with the state Department of Public Utilities.
Grade 1, under the legislation, refers to leaks representing "an existing or probable hazard to persons or property," and requiring action as soon as possible.
Grade 2 leaks are those "recognized as non-hazardous ... at the time of detection," but which also require scheduling repairs or replacement to avoid a hazardous condition in the future. They must be repaired or replaced within one year.
Grade 3 leaks are recognized as non-hazardous and expected to remain non-hazardous. Those leaks must be re-evaluated every 12 months, and a municipality or state official can request an earlier re-evaluation.
Under the bill, gas companies also "may file with the department a plan to address aging or leaking natural gas infrastructure ... in the interest of public safety and reducing lost and unaccounted for natural gas through a reduction in natural gas system leaks."
Downing said repair and replacement plans submitted by companies, which must have a target completion date of less than 20 years, will allow them to apply to the DPU for incremental rate increases to help cover the cost.
The DPU would consider the condition of the infrastructure to be repaired or replaced, the effectiveness of the project in reducing leaks and the reasonableness of the costs. Rate increases would be capped annually and based on a percentage of recent calendar year revenue and other factors.
A principal target for replacement is the cast iron or wrought iron gas infrastructure. "It is some of the oldest in the country," Downing said.
Farrell said Berkshire Gas, which serves Berkshire and Franklin counties and areas of Hampshire County, already has a 20-year plan in place for replacing its oldest gas lines, which are made of cast iron and bare steel, while modern lines are plastic-coated steel or plastic lines. What the bill should allow companies to do, he said, is greatly accelerate the replacement of old lines, which pose the greatest safety and leakage threats.
Berkshire Gas already has "the lowest leakage rate of all of Massachusetts," Farrell said, and the utility spent $17 million from 2002-12 replacing aging infrastructure.
However, of the 750 miles of gas line in the Berkshire Gas service area, about 127 miles is older cast iron or bare steel line, he said.
"This [bill] is huge for the industry and for Massachusetts and New England," Farrell said, referring to the potential to replace some of the nation’s oldest infrastructure in a relatively short period.
As for the 20-year goal for updating the infrastructure, Downing said, "We think they can do this much quicker."
Equally important for the industry and the regional economy, Farrell said, are sections of the bill that allow gas companies to apply to the DPU to expand service to unserved areas without having contracts in hand to cover the cost -- as is now required.
That means a utility could extend gas mains to new streets or sections of communities when it believes customers switch to natural gas. "Hopefully, this will allow us to extend service and lower the costs to consumers," he said, referring to the current lower cost for natural gas compared to fuel oil.
Provisions of the legislation would begin to take effect Oct. 1.
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