Excess Flow ValveCustomer Notification

Passage 1[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)] [Proposed Rules] [Pages 33476-33480] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-16384] ======================================================================= ----------------------------------------------------------------------- Research and Special Programs Administration [Docket PS-118A; Notice 1] RIN 2137-AC55 Excess Flow Valve--Customer Notification AGENCY: Research and Special Programs Administration (RSPA), DOT. ----------------------------------------------------------------------- SUMMARY: This notice proposes to require operators of natural gas distribution systems to notify in writing their customers of the availability of excess flow valves (EFVs) meeting DOT-prescribed performance standards, the safety benefits of these valves, and the costs of installation. If a customer requests installation, the notice proposes that an operator will be required to install the EFV if the customer pays all costs of installation. EFVs restrict the flow of gas by closing automatically when a service line is severed, thus mitigating the consequences of service line failures. This proposed regulation would enhance public awareness of the safety benefits that can be derived from installation of EFVs. DATES: Comments on this notice of proposed rulemaking (NPRM) must be received on or before August 26, 1996. Late-filed comments will be considered to the extent practicable. Interested persons should submit as part of their written comments all the material that is considered relevant to any statement or argument made. ADDRESSES: Written comments must be submitted in duplicate and mailed or hand-delivered to the Dockets Unit, room 8421, U.S. Department of Transportation, Research and Special Programs Administration, 400 Seventh Street, SW., Washington, DC 20590. Identify the docket and notice numbers stated in the heading of this notice. All comments and materials cited in this document will be available for inspection and copying in room 8421 between 8:30 a.m. and 4:30 p.m. each business day. Non-federal employee visitors are admitted to the DOT headquarters building through the southwest entrance at Seventh and E Streets.#

Passage 2FOR FURTHER INFORMATION CONTACT: Mike M. Israni, (202) 366-4571, regarding the content of this document, or the Dockets Unit (202) 366- 4453 for copies of this NPRM or other material in the docket. In the process of routine excavation activities, excavators often sever gas service lines causing loss of life, injury, or property damage by fire or explosion. EFVs restrict the flow of gas by closing automatically when a line is severed, thus mitigating the consequences of service line failures. Despite efforts, such as damage prevention programs, to reduce the frequency of excavation-related service line incidents on natural gas service lines, such incidents persist and continue to result in death, injury, fire, or explosion. Because damage prevention measures are not foolproof, RSPA has sought to determine an appropriate means to mitigate the consequences of these incidents. The National Transportation Safety Board (NTSB) and others have recommended the use of EFVs as a means to mitigate the consequences of such incidents, thus saving lives and lessening the extent of property damage. By informing customers of the availability of EFVs for installation at a cost and the resultant safety benefits, customers can decide for themselves if they want the operator to install an EFV on their service line. Notification giving information on EFVs may encourage the increased use of EFVs and, by encouraging such use, may lead to a reduction in fatalities, injuries, and property damage that can result from excavation-related incidents on gas service lines. Federal law requires DOT to prescribe regulations requiring operators to notify customers in writing about EFV availability, the safety benefits derived from installation, and costs associated with installation. The regulations are to provide that, except where installation is already required, the operator will install an EFV that meets prescribed performance criteria at the customer's request, if the customer pays all costs associated with installation. (49 U.S.C. 60110).#

Passage 3Before DOT prescribes notification regulations, the statute requires DOT to issue regulations prescribing the circumstances under which operators of natural gas distribution systems must install EFVs, unless DOT determines that there are no circumstances under which EFVs should be installed. RSPA published an NRPM (Notice 2; 58 FR 21524; April 21, 1993), titled ``Excess Flow Valve Installation on Service Lines,'' proposing to require installation of EFVs on single-residence gas service lines. During the rulemaking process RSPA reviewed technical information, sought advice from state safety representatives, and analyzed available operational data. RSPA determined, primarily for cost reasons, that there were no circumstances under which RSPA should require EFV installation. As required by the statute, RSPA reported this determination to Congress on April 4, 1995. A copy of this report is available in the docket. As further required by 49 U.S.C. 60110, RSPA developed performance standards for EFVs to ensure that an EFV installed in a single-residence gas service line operates reliably and safely. These standards were published as a final rule 61 FR 31449; June 20, 1996.#

Passage 4On July 14, 1995, the American Gas Association (AGA) submitted a petition for a rulemaking on EFV customer notification requirements. In this petition, AGA urged RSPA to develop customer notification regulations that minimize any regulatory burden on gas operators. AGA said that the congressional committee responsible for the original notification mandate, as well as proposed changes to that mandate in current pipeline re-authorization legislation, intended that an operator be required to notify a customer about EFVs if the operator was installing a new service line or replacing a part of a service line, the line would accommodate an EFV, and the operating conditions on the line were the same as those prescribed in the performance standards. AGA further said that Congress intended an operator be required to install an EFV if the customer agreed to pay all the costs associated with the installation, maintenance, and operation of the EFV. AGA's other main concerns about customer notification are listed as follows: (a) Operators are concerned about potential liability should an EFV fail to perform to the satisfaction of the customer and the customer claims that the gas company overstated the merits of the product. (b) Because operators may have difficulty determining whom to notify if the occupant is not the owner, the regulation should clearly identify the customer who is to receive notification. (c) The notification requirements should acknowledge and accommodate that state or local restrictions may prevent or restrict the gas utility's ability to accept a customer's payment for anything except gas service. (d) Notification should be required only on services where the conditions are identical to those in the EFV performance standards. (e) Exemption should be allowed from the notification requirements where compliance would be infeasible, impractical or unreasonable. AGA's petition is on file in the docket and was taken into consideration during development of this notice of proposed rulemaking.#

Passage 5On August 2 and September 6, 1995, RSPA met with representatives of AGA, the American Public Gas Association (APGA), NTSB, and the Gas Safety Action Council (GASAC). These meetings were early consultations for RSPA to gather information before proposing a notification rule. APGA generally had the same concerns as AGA. AGA and APGA again recommended that the costs associated with installation include EFV maintenance and replacement costs, as well as the initial installation cost. As support, they pointed to the proposed change in the pipeline re-authorization legislation allowing for such costs. AGA and APGA also recommended that RSPA limit required notification to only new and replaced service line customers to minimize the burden on operators. They explained that because an operator could have difficulty in determining if operating conditions on existing service lines are the same as those found in the prescribed performance standards an operator should be allowed to determine whether to expand notification to all its existing residential customers. NTSB and GASAC, on the other hand, suggested that a notification rulemaking include all residential natural gas customers, as well as commercial enterprises. They pointed out that 49 U.S.C. 60110 did not limit notification to single-residence customers. NTSB also recommended that a notification rule should require operators to include brochures from two or three EFV manufacturers, along with a consumer group's telephone number, to help customers make an informed decision on installation. RSPA proposes to amend part 192 by adding Sec. 192.383 prescribing requirements for excess flow valve customer notification.#

Passage 6The statute requires notification of customers with service lines in which EFVs that meet prescribed performance criteria can be installed. Because the final rule setting EFV performance standards covers only EFVs installed on single-residence service lines operating continuously throughout the year at a pressure not less than 10 psig, RSPA proposes to limit the scope of customer notification to those customers. RSPA developed the performance standards from the comments and recommendations received during the rulemaking process on proposed EFV installation on single-residence gas service lines. Of those single-residence services for which performance standards were prescribed, RSPA proposes to require operators to notify in writing their new and replaced service line customers. This proposal is based on RSPA's belief that it would not be practical for operators to send notifications to all single-residence customers because determining whether EFVs can be installed on existing lines presents difficulties (such as lack of relevant records and historical data) not encountered on new and replaced lines. Furthermore, RSPA's preliminary economic evaluation showed that requiring notification to all single- residence customers would result in substantially higher costs with marginal safety benefits due to the increased time an operator would have to spend in responding to inquiries from customers and determining operating conditions on existing lines. Because of the increased installation costs to retrofit an existing line, it would be unlikely that many existing customers would choose to pay the costs of installation. Nonetheless, RSPA encourages operators to consider expanding notification to all single-residence customers. RSPA may consider extending the scope of notification to hospitals, schools, commercial enterprises, and apartment buildings after publication of EFV standards by the American Society of Testing and Materials (ASTM) F17.40 committee and the American National Standards Institute (ANSI)/Gas Piping Technology Committee (GPTC) Z380. RSPA proposes to define a ``replaced'' service line as a natural gas service line undergoing a repair in which a section of pipe is replaced between the gas main and the meter set assembly.#

Passage 7RSPA recognizes that determining whom an operator should notify may be difficult because the occupant of the residence where the EFV may be installed is not always the owner. RSPA is proposing to define the service line customer an operator should notify as the person who pays the gas bill, or where service has not yet been established, the owner of the property. Under this proposed definition, the person who pays the gas bill may be the tenant, the owner, or a third party. In cases where service has not yet been established, such as a new subdivision or cluster of homes, the property owner at the time the service is installed may be the home builder. RSPA is proposing that the notification contain the minimum amount of information required by the statute. Under the proposal, the operator can decide how to word that information as long as sufficient information is given to provide the customer a basis to decide whether to pay for EFV installation and the information is written in language easily comprehended by the average customer. This flexibility should address operators' concerns about potential liability problems. An explanation that an excess flow valve meeting minimum DOT- prescribed performance standards is available for the operator to install on the service line if the customer pays the cost of installation. The explanation should make clear to the customer that EFV installation is not mandatory, but that if the customer requests installation and pays all costs associated with installation, the operator will install an EFV. An explanation of the potential safety benefits of installing an EFV, to include that an EFV is designed to shut off the flow of natural gas automatically when the service line is ruptured. The rule proposes that as long as the operator describes the benefits to be derived from installation, the operator may choose how best to describe those benefits.#

Passage 8An explanation that if the customer requests the operator to install an EFV, the customer bears the costs associated with installation and what those costs are. AGA suggested in its petition that costs ``associated'' with installation should include initial installation, maintenance, and replacement costs of the EFV. Although such costs are allowed in proposed re-authorization legislation, RSPA is following the language in 49 U.S.C. 60110 that limits costs to costs associated with installation. RSPA believes the reason for the customer notification requirement was to allow customers to have a reasonably available extra safety protection. Therefore, to assure costs are not prohibitive to customers desiring EFV installation, RSPA is proposing that an operator be limited in recoupment of its costs of installation, specifically, to direct costs (parts and labor) of installation. Thus, excavation costs for new and replaced services are not to be included in the direct cost of EFV installation. Additional information, such as EFV manufacturers' brochures and a consumer group's telephone number, may help customers in deciding whether to have an operator install an EFV. However, RSPA believes requiring such information to be included would burden operators with trying to include every manufacturer's brochure and every applicable consumer group's telephone number, or would leave operators open to criticism from those whose information was not included. Nonetheless, RSPA encourages operators to include additional information, such as one or more EFV manufacturer's brochures or a consumer group's telephone number, if in the operator's judgment the information would aid the customer's decision making. RSPA proposes that an operator notify each applicable service line customer the later of 1 year after date of publication of a final rule in the Federal Register or at least 30 days before the operator installs a new service line or replaces the service line. One year should be adequate time for operators to learn which customers to notify, to draft notices, and to instruct personnel to handle inquiries.#

Passage 9In RSPA's judgment the regulatory waiver process now in place should alleviate concern about an operator's recourse if a jurisdiction (state or local) prevents or restricts the gas utility from accepting a customer's payment for anything other than gas service. To RSPA's knowledge, when a customer voluntarily asks for extra safety protection, a state or local jurisdiction may not prevent a gas operator from charging that customer for providing that extra service. However, if an operator is so prevented, it may apply for a waiver from the regulation. In any case, because we lack information on how prevalent this situation is, we seek comment from operators, state pipeline safety agencies, their representative associations and others on this issue. We also seek comment on whether the waiver process in such a situation would be too burdensome. Similarly, if an operator believes that in a particular situation, compliance would be infeasible, impractical or unreasonable, the operator may apply for a regulatory waiver. Again, we seek comment on this issue. RSPA is proposing that the notification requirements would not apply in certain limited circumstances-- (1) To service lines in which the operator will install an excess flow valve voluntarily or where installation is required by the state or local jurisdiction; (2) If excess flow valves meeting the RSPA-prescribed performance standards are not available to the operator; (3) Where an operator has prior experience with contaminants in the gas stream that could interfere with operation of the EFV, cause loss of service to a residence, or where the installation of an excess flow valve would interfere with necessary operation or maintenance activities, such as blowing liquids from the line. The burden will be on the operator to demonstrate that any of these circumstances prevent it from installing an EFV. As previously noted, AGA's petition requested that a notification rule allow an exemption in emergency situations. RSPA recognizes that in some situations an operator may not be able to notify a customer before replacing a service line. However, RSPA does not want such an exemption to be used on all repairs. We seek comment and information on how to implement and define this requested exclusion. What type of emergency repairs do operators see that could justify such an exemption? How can an exemption be limited so#

Passage 10that it can not be used for any repair needing replacement? To check compliance, RSPA and State inspectors will need to view a copy of the notice operators send customers and proof that notices have been sent to customers. Therefore, RSPA proposes that each operator must make the following records available for inspection by the Administrator or a State agency participating under 49 U.S.C. 60105 or 60106: (1) A copy of the notice currently in use; and (2) Proof that notices have been sent to customers within the previous three years. Executive Order 12866 and DOT Regulatory Policies and Procedures#

Passage 11This proposed rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was not subject to review by the Office of Management and Budget. The proposed rule is not considered significant under the regulatory policies and procedures of the Department of Transportation (44 FR 11034; February 26, 1979). A regulatory evaluation has been prepared based on the estimated expense involved in developing and sending customer notification to new and replaced single-residence service line customers. RSPA estimates that large and moderate-sized gas operators will develop their own customer notice. This should take approximately 40 hours at approximately $25 an hour or a one-time cost of $1,000 per company (40 hours x $25 per hour = $1,000). RSPA estimates in its regulatory evaluation (based on analysis done for an earlier rulemaking on customer-owned service lines) that there are 106 large gas operators and 145 moderate-sized gas operators. Therefore, the cost to the industry to develop this proposed notice will be a one-time cost of $251,000 (251 x $1,000). The cost of mailing this notice will be $0.32 plus the estimated $0.1 copying cost for a one-page notice, for a total cost of $0.42 per customer. If there are 900,000 new or renewed customers annually, the cost of this notice should be $378,000 (900,000 *.42 mailing) per year. Assuming 10% of all notified customers were to call operators for more information, that would result in 90,000 phone calls. Each call lasting five minutes would amount to 7,500 hours (90,000 * \5/60\ hrs) spent answering customer inquiries. If the employee responsible for answering were paid $15 per hour the additional cost of these conversations would be $112,500 (7,500 * $15) per year. The total cost to the industry will be the one time cost of developing the proposed notice, $251,000, and the additional cost per year of mailing and handling inquiries, $490,500 ($112,500 + $378,000). As discussed in the Regulatory Evaluation, the American Public Gas Association (APGA), which represents municipal gas distribution companies (the bulk of small operators), has agreed to assist small and medium-sized operators in developing a generic EFV notification. RSPA also believes that EFV manufacturers, as well as other large companies and state gas associations, are likely to assist smaller gas opera#

Passage 12tors in their development of an EFV notification. With this help, RSPA believes that small and medium-sized operators will choose to use a generic notification rather than incur the cost of developing their own notice. However, there will be the cost of notice reproduction, mailing, and handling phone inquiries as described above. Therefore, RSPA estimates that the cost of developing this notice as proposed will be minimal for small and medium-sized operators. RSPA considered requiring notification of the availability of EFVs to all customers, not simply new and renewed customers. This alternative was rejected as not being cost-beneficial for two reasons. First, the cost of this rule would be an additional $5.36 million (53.6 million customers x $.10 per copy) just for developing the notice. In addition, assuming 10% of all notified customers were to telephone operators for more information, that would result in 5.36 million additional phone calls. Each call lasting five minutes would amount to 446,666 hours (5.36 million* \5/60\ hours). If the employees responsible for answering these inquiries were paid a salary of $15 per hour, the additional cost of handling inquiries would be $6.7 million (5.36M * \5/6\ * 15) to the industry. Therefore, the total cost of notifying existing customers would be additional $12 million ($5.36M + $6.7M). Second, there would be marginal safety benefit as few existing service line customers would be likely to request EFV installation that could cost more than $500 per service line, mainly due to the excavation costs associated with such installation. Therefore, RSPA concludes that requiring operators to notify all existing customers would cost significantly more and would provide little additional benefit to the public. Benefits that are expected to result from this proposed rule are the increased use of EFVs, which could potentially reduce the fatalities, injuries and property damage that can result from excavation-related incidents on gas service lines. The regulatory evaluation is available for review in the docket. Based on the findings of this evaluation this proposed rule should have minimal economic impact on industry and the public.#

Passage 13The Federal Government is required to determine the impact of its regulations on small entities. Based on the regulatory evaluation, RSPA has determined that the proposed rule will not have a significant impact on a substantial number of small entities. Approximately 1,600 natural gas distribution operators will be affected by this rule. APGA, the trade association of the majority of small operators, has indicated it will assist operators in preparing a notification. Additionally, EFV manufacturers have also offered to assist operators. It is also likely that regional gas associations and large operators will assist smaller operators in developing the appropriate notification. All these actions will serve to minimize the costs to small operators because small operators are apt to use a generic notice created by one of these groups rather than incur the expenses of developing their own notice. This NPRM contains proposed information collections that have been submitted for review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995 (Pub. L. 104- 13). Interested persons are invited to comment on the proposed collection of information. Comments should address: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the agency's burden estimates, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the information collection burden on the respondents, including the use of automated, electronic, mechanical, or other technological collection techniques. Administration: Department of Transportation, Research and Special Programs Administration; Title: Excess Flow Valves: Customer Notification. Need for Information: By notifying customers that they may have an excess flow valve installed on their line at cost, some of the consequences of service line failures (fatalities, injuries and property damage) could be mitigated. Summary: Operators must demonstrate that they have sent the EFV notification to their customers. Proposed Use of Information: The notification will advise customers that#

Passage 14they may request an excess flow valve be installed on their service line at their own expense. Also, by keeping proof that notification was sent, RSPA will be able to ascertain that operators are complying with this regulation. Frequency: Occasionally, once for each new and renewed customer. Number of Respondents: 1,590. Estimate of Burden: 17,541 hours. Respondents: Natural Gas Distribution Operators. Estimated Total Annual Burden on Respondents: 11 hours (first year) 4.75 hours each subsequent year. For further information contact: Mr. Marvin Fell, Office of Pipeline Safety, Research and Special Programs Administration, 400 Seventh St., SW., Washington, DC 20590. Comments on the proposed information collection requirements should be submitted within 30 days of the publication of this notice to: the Office of Management and Budget, Office of Information and Regulatory affairs, New Executive Office Building, 725 17th St., NW., Washington, DC 20503, Attn: Desk Officer RSPA. Persons submitting comments to OMB are also requested to submit a copy of their comments to RSPA as indicated above under ADDRESSES. Persons are not required to respond to a collection of information unless it displays a currently valid OMB control number. This proposed rule will not have substantial effects on states, on the relationship between the federal government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with E.O. 12612 (52 FR 41685, October 30, 1987), RSPA has determined that this proposed rule does not have sufficient federalism implications to warrant preparation of a Federalism Assessment. Pipeline Safety, Reporting requirements. In consideration of the foregoing, RSPA proposes to amend 49 CFR part 192 as follows: 1. The authority citation for part 192 continues to read as follows: Authority: 49 U.S.C. 5103, 60102, 60104, 60110, and 60118; 49 CFR 1.53. 2. Part 192 would be amended by adding Sec. 192.383 to read as follows: Sec. 192.383 Excess flow valve Customer Notification.#

Passage 15(a) Prior to installing a new service line or replacing an existing service line that operates continuously throughout the year at a pressure not less than 10 psig and that serves a single residence, each operator of a natural gas distribution system shall notify the service line customer in writing that: (1) An excess flow valve meeting performance standards prescribed under Sec. 192.381 is available for installation by the operator if the customer bears the costs associated with installation; (2) Potential safety benefits may be derived from installing an excess flow valve. Benefits are to include that an excess flow valve is designed to shut off the flow of natural gas automatically when the service line is ruptured. (3) The costs the customer bears shall be the direct costs (parts and labor) of installing or replacing the excess flow valve and what those costs are. (4) The notice shall provide explanation in sufficient detail, and in language easily comprehended by the average customer, to provide the basis upon which the customer can decide whether to pay for installation. (5) For the purpose of this section, a ``replaced'' service line refers to a natural gas service line in which a section of pipe is replaced between the gas main and the meter set assembly. A ``service line customer'' means the person who pays the gas bill, or where service has not yet been established, the owner of the property. (b) The operator shall install an excess flow valve in accordance with paragraph (a) of this section if the customer agrees to pay all costs associated with installation. (c) Each operator shall notify each customer not later than [insert date 1 year after date of publication of a final rule] or at least 30 days before a new or replaced service line is installed, whichever is later. (d) Each operator must make the following records available for inspection by the Administrator or a State agency participating under 49 U.S.C. 60105 or 60106: (1) A copy of the notice currently in use; and (2) Proof that notices have been sent to customers within the previous 3 years. (e) The notification requirements of paragraph (a) of this section do not apply-- (1) To service lines in which the operator will install an excess flow valve voluntarily or where installation is required by the state or local jurisdiction; (2) If excess flow valves meeting the RSPA prescribed perfo#

Passage 16rmance standards are not available to the operator; (3) Where an operator has prior experience with contaminants in the gas stream that could interfere with the EFV, cause loss of service to a residence or where the installation of an excess flow valve would interfere with necessary operation or maintenance activities, such as blowing liquids from the line. Issued in Washington, DC, on June 21, 1996. Richard B. Felder, Associate Administrator for Pipeline Safety. [FR Doc. 96-16384 Filed 6-26-96; 8:45 am] BILLING CODE 4910-60-P#