# New Mexico Public Regulation Commission — Pipeline Safety Interpretation - **operation:** document - **citation:** PI-09-0019 - **title:** New Mexico Public Regulation Commission — Pipeline Safety Interpretation - **source type:** guidance - **agency:** Pipeline and Hazardous Materials Safety Administration - **status:** guidance - **official:** true - **published on:** 2010-03-22 - **effective on:** Not available - **summary:** PI-09-0019 response to New Mexico Public Regulation Commission concerning 192.3. - **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-interpretation-pi-09-0019.json - **markdown:** https://regulus.evalyn.ai/document/phmsa-interpretation-pi-09-0019.md - **app url:** https://regulus.evalyn.ai/document/phmsa-interpretation-pi-09-0019 - **source url:** https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/legacy/interpretations/Interpretation%20Files/Pipeline/2009/PI-09-0019.pdf **body:** <<>> u . S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Avenue, SE Washington, D.C. 20590 MAR 2 2 2010 Mr. Joe M. Johnson Acting Bureau Chief New Mexico Public Regulation Commission Pipeline Safety Bureau 1120 Paseo de Peralta Santa Fe, New Mexico 87504 Dear Mr. Johnson: In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) dated September 15,2009, you requested an opinion/interpretation on whether the following pipelines operated by New Mexico Gas Company (NMGC) should be regulated as transmission pipelines or distribution pipelines (as described by New Mexico Public Regulation Commission): 1. Animas Power Plant 6" diameter - an intrastate natural gas pipeline that transports natural gas from a transmission line to a large volume customer (Animas Power Plant). 2. Farmington (Bluffview) Power Plant 8" diameter - an intrastate natural gas pipeline that transports natural gas directly from a transmission line to large volume customers (Animas and Bluffview power plants). 3. Tucumcari Mainline - an intrastate natural gas pipeline that transports natural gas directly from a transmission to distribution centers (Tucumcari Townplant, Northeast Regulator Station, and Baker Kelso Regulator Station). This pipeline is a continuation of the Clovis Transmission Line that transports natural gas from EI Paso Natural Gas Company's intrastate pipeline system to New Mexico Gas Company's Northeast Area distribution centers, and is not downstream of a distribution center. NMGC has designated a valve at the Clovis Border Regulator Station as the end point of the Clovis Transmission Line and the beginning of the Tucumcari and Cannon mainlines. The Clovis Transmission line and the Tucumcari and Cannon mainlines all operate at 300 psig. The Tucumcari Mainline runs approximately 62 miles from Mile Post 0 at the Clovis Border Regulator Station to the Tucumcari Townplant distribution center. 4. Cannon Mainline - an intrastate natural gas pipeline that transports natural gas directly from a transmission to distribution centers (Northwest Regulator Station, Mixon lane Regulator Station, Hayfield Farmers Regulator Station, 6084 Regulator Station, Port Air Dairyman Regulator Station, Port Air Farmers Regulator Station, and Clovis Expansion Regulator Station). This pipeline is a continuation ofthe Clovis Transmission line that The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations. <<>> 2 transports natural gas from EI Paso Natural Gas Company's Intrastate pipeline system to New Mexico Gas Company's Northeast Area distribution centers, and is not downstream of a distribution center. 5. Northeast Distribution Mainline - an intrastate natural gas pipeline. The pipeline is a loop line that can be used to: (a) transports natural gas from EI Paso Natural Gas Company's interstate pipeline via NMGC's Clovis Transmission line to the Tucumcari Townplant distribution center without going to the Clovis Border Regulator Station, or (b) transport natural gas to the Clovis Townplant distribution center via the Tucumcari Mainline. 6. Portales Mainline - an intrastate natural gas pipeline that transports natural gas from the Clovis Transmission line, and Transwestern's interstate transmission line to distribution centers (Portales Townplant, Grinder Regulator Station, Baxter Regulator Station, Midway Regulator Station, and Cameo Regulator Station). Pressure on the pipeline is regulated at 200 psig just downstream of the Transwestern interconnect at the Clovis Transmission line. There are no service lines on the Portales Mainline and the pipeline runs approximately 20 miles to the Portales Townplant distribution center. Based on the provided information, we agree with the Commission's determination that all of the specified lines meet the definition of a transmission line. PHMSA' s responses concerning each of the specified lines are as follows: 1. Regarding the Animas Power Plant 6" line, we believe this line is a transmission line because under the first definition of a transmission line this line transports gas from a transmission line to a large volume customer that is not downstream from a distribution center. 2. Regarding the Farmington (Bluffview) Power plant 8" line, we believe this line is a transmission line because under the first definition of a transmission line this line transports gas from a transmission line to a large volume customer that is not downstream from a distribution center. 3. Regarding the Tucumcari Mainline, we do not consider a decrease in pressure to below 20 percent SMYS at a transmission line to be a "distribution center" and lines downstream of that point to be distribution lines - this would violate the intent of the pipeline safety regulations. We consider a "distribution center" to be the point where gas enters piping used primarily to deliver gas to customers who purchase it for consumption as opposed to customers who purchase it for resale. Therefore, in our opinion, this line is an extension of the Clovis transmission line. 4. Regarding the Cannon Mainline, we do not consider a decrease in pressure to below 20 percent SMYS at a transmission line to be a "distribution center" and lines downstream of that point to be distribution lines - this would violate the intent of the pipeline safety regulations. We consider a "distribution center" to be the point where gas enters piping used primarily to deliver gas to customers who purchase it for consumption as opposed to The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations. <<>> 3 customers who purchase it for resale. Therefore, in our opinion, this line is an extension of the Clovis transmission line. 5. Regarding the Northeast Distribution Mainline, we do not consider a decrease in pressure to below 20 percent SMYS at a transmission line to be a "distribution center" and lines downstream of that point to be distribution lines - this would violate the intent of the pipeline safety regulations. We consider a "distribution center" to be the point where gas enters piping used primarily to deliver gas to customers who purchase it for consumption as opposed to customers who purchase it for resale. Therefore, in our opinion, this line is an extension of the Clovis transmission line or the Tucumcari Mainline as described by PSB. 6. Regarding the Portales Main line, we do not consider a decrease in pressure to below 20 percent SMYS at a transmission line to be a "distribution center" and lines downstream of that point to be distribution lines - this would violate the intent of the pipeline safety regulations. We consider a "distribution center" to be the point where gas enters piping used primarily to deliver gas to customers who purchase it for consumption as opposed to customers who purchase it for resale. Therefore, in our opinion, this line is an extension of the Clovis Transmission line and Transwestern transmission line. For your information, on September 25,2009, PHMSA received a letter from NMGC concerning your interpretation request. PHMSA is providing NMGC with a copy of this letter and a copy of PHMSA's response to NMGC is enclosed. I hope that this information is helpful to you. If! can be of further assistance, please contact me at (202) 366-4046. Enclosures The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 eFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations. <<>> U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Avenue, SE Washington, D.C. 20590 MAR 2 2 2010 Mr. Thomas M. Domme Vice President and General Counsel New Mexico Gas Company P.O. Box 97500 Albuquerque, NM 87199-7500 Dear Mr. Domme: In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) dated September 25,2009, you expressed your views concerning a September 15,2009, request for interpretation submitted to PHMSA by the New Mexico Public Regulation Commission (Commission). You explained that New Mexico Gas Company (NMGC) was engaged in settlement talks with the Commission concerning a matter that potentially involved the issues for which the Commission sought interpretation from PHMSA. To the extent you questioned the procedural validity of the Commission's request, we find it was properly submitted. PHMSA maintains open and continuous communications with our State regulatory partners at a variety of formal and informal levels. Note that requests for interpretation are explanatory in nature and are intended only to apply existing laws and requirements to a particular scenario presented by the requester. Interpretations do not create new requirements not already in the pipeline safety laws and regulations. To the extent you questioned the factual details set forth by the Commission in its request, please be advised that PHMSA must assume the scenario presented by the requester is the one the requester is interested in for purposes of obtaining information on how the regulations would apply. PHMSA makes no attempt to investigate or otherwise verify the information provided by the requester (in some cases, the scenarios presented to PHMSA by a requester may even be hypothetical). In preparing our response to the Commission, however, we were aware of the information you provided in your September 25,2009, letter, and as you know my staff had telephone conversations with NMGC as well as the Commission. For your information, a copy ofPHMSA's response to the Commission is enclosed with this letter. The Pipeline and Hazardous Materials Safety Administration. Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations. <<>> 2 I hope that this information is helpful to you. If I can be of further assistance, please contact me at (202) 366-4046. Sincerely, ~ John A. Gale Director, Office of Regulations Enclosure The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarifications of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations. <<>> PHP Controlled Correspondence Sheet PHMSA Control Number: Action Office: PHP- 30 PHP Control Number: 10-0008 Due Date: 12114/2009 Writer: Thomas M. Domme Subject: : Re: New Mexico Gas Company's Position Concerning New Mexico PSB September 15,2009 Request for Opinion/Interpretation of Certain Transmission and Distribution Pipelines Action: Opinion/Interpretation Date Action Action by Date Note Note by For more information please contact: Glenda Marshall, Glenda.marshall@dot.gov <<>> 15057974752 nmgco NMGCO 11:01:44a.m. 09-28-2009 1 16 New Mexico GAS COMPANY P.O. Box 97500 Albuquerque, NM 87199-7500 Thomas M. Domme Vice President & General Counsel 505·697·3834 (direct) 505·250.1419 (cell) tom.doollne@nmgco.com SEP 292009 FAX MEMORANDUM TO: FROM: Jeff Wiese USDOTIPHMSA Tom Domme New Mexico Gas Company Number of Pages (including this cover page): _....;6~_ FAX No.: 202-366-3666 Dear Me. Wiese: Attached please find a copy of my letter sent to you dated September 25, 2009. The original was sent on Friday September 25th and should arrive via first class mail. Also attached is the letter dated September 15, 2009 from the New Mexico Public Regulation Commission's Pipeline Safety Bureau regarding request for opinion/interpretation, which was inadvertently left out of the mailing. Thank you. Cc: A veIino Gutierrez (via emaiJ) Joe Johnson (via email) <<>> 15057974752 nmgco NMGCO 11 :01 :58 a.m. 09-28-2009 2/6 New Mexico GAS COMPANY Thomas M. [)onnne Vice President & General Counsd 505·697·.'834 (dimn 505·250-1419 (cell) September 25.2009 Jeff Wiese U.S Department of Transportation Pipeline & Hazardous Materials Safety Administration East Building, 2nd Floor 1200 New Jersey Avenue. SE Washington, DC 20590 A velino Gutierrez NM Public Regulation Commission P.O. Box 1269 Santa Fe, NM 87504-1269 Joe Johnson Pipeline Safety Bureau NM Public Regulation Commission P.O. Box 1269 Santa Fe, NM 87504-1269 Re: September 15,2009 New Mexico PSB request for opinion/interpretation. Gentlemen, New Mexico Gas Company ("NMGC") is in receipt of a September IS, 2009 request for opinion/interpretation ("Request") from Mr. Joe Johnson, Acting Bureau Chief of Pipeline Safety for the State of New Mexico ("PSB"). A copy of the Request is attached for your convenience. The Request asks for an opinion/interpretation on whether six identified pipelines operated by NMGC are transmission or distribution pipelines and provides an interpretation of 49 c.F.R. 192.3. Our initial review of the Request raises concerns and questions about the procedural validity of the Request, and well as the scope and factual details of the Request, and we will be preparing a detailed response to the Request. In short, in NMGC's view, the interpretation of the regulation in the Request is incorrect in several respects, and fails to recognize the provisions in the remainder of the definition as well as the history behind this issue. NMGC anticipates providing its response within ten days. By way of brief background, this issue has been the focus of many discussions and meetings in New Mexico between representatives of PSB and the gas utility since at least 1992. It was NMGC's understanding that these discussions were ongoing. As recently as 2007, a settlement discussion was held between PSB and the utility, and over the last two years additional conversations were held between the former PSB Bureau Chief, Bruno Carrara. and NMGC. NMGC anticipated and was told to anticipate a response from PSB directly to NMGC regarding PSB's latest position in these ongoing discussions. NMGC was never informed and was not aware that PSB was intending to suomi! the Request, and NMGCs input into the form of the requeo.;t wus not sought. NMGC remains of the opinion that discuso.;ion in New Mexico would he the Illore fruitful avenue for rc ... olution and intends to approach PSB to altcmpt further di ... cllssions on thc ... c i .... sllcs. P.O. Box 97500. Albuquerque, NM 87199-7500 • p: 888 NMGASCO • www.nmgco.com <<>> NMGCO 11:02:26a.m. 09-28-2009 3/6 15057974752 nmgco Jeff Wiese, et al. September 25,2009 Page 2 As an aside, it is not clear, but it appears that the Request is being made under 49 C.F.R. 190.11 for informal guidance and interpretation. If so, then the Request is technically misdirected to the Associate Administrator, and should be redirected or forwarded consistent with 190.11 (b) to the Office of Pipeline Safety generally for an informal interpretation. Further, although not spelled out in 190.11 (b), as indicated above, NMGC intends to respond to the Request to provide a fuller and more detailed picture of the issue presented. To the extent leave is required to provide such a response under 190.11(b), NMGC seeks such leave. Finally, because the Request could have far reaching implications throughout the State of New Mexico, to other states, and even to other utilities, NMGC will be soliciting input from other gas utilities and the American Gas Association on this issue and will either incorporate these positions in its response, or solicit direct input by these entities. cc: Rick Backes Gary Roybal Rebecca Carter P.O. Box 97500 . Albuquerque, NM 87199·7500 p: 888 NMGASCO . www.nmgco.com <<>> 15057974752 nmgco NMGCO 11 :02: 43a .m. 09-28-2009 4 /6 NEW MEXICO PUBLIC REGULATION CONIMISSION COMMISSIONERS DISTRICT I JASON MARKS DISTRICT 2 DAVID W. KING, VICE CHAIRMAN DISTRICT 3 JEROME D. BLOCK DISTRICT 4 CAROL K. SLOAN DISTRICT 5 SANDY JONES, CHAIRMAN Daniel Mayfield, Chief of Staff Transportation Diviswn Pipeline Safety Bureau 1120 Poseo de Peralta Santa Fe, New Mexico 87504 Main Line (50S) 476-0298 Emergency (505) 490-2375 Fax (505)827-4388 September 15, 2009 Mr. Jeff Wiese, Associate Administrator US DOT /PHMSA/OPS PHH-l . 1200 New Jersey Avenue, SE East Bldg., 2nd Floor Washington, DC 20590 Dear Mr. Wiese: I am writing to request an opinion/interpretation on whether the following pipelines operated by New Mexico Gas Company (NMGC) are transmission or distribution pipelines: 1) Animas Power Plant 6" 2) Farmington (Bluffview) Power Plant 8" 3) Tucumcari Mainline 4) Cannon Mainline 5} Northeast Distribution Mainline 6) Portales Mainline NMGC claims that the pipelines are not transmission lines because they operate at less than 20% of specified minimum yield strength. 1 <<>> 15057974752 nmgco NMGCO 11:03:01 a.m. 09-28-2009 5/6 Our staff has reviewed the definition of transmission lines in 49 CFR § 192.3 and the preamble of the most recent change In this regulation (RSPA-99.f)106;Amdt. 192-94) and concluded that the pipelines are transmission lines for the following reasons: 1) The Animas Power Plant 6" is an intrastate natural gas pipeline that transports natural gas from a transmission line to a large volume customer (Animas Power Plant). It Is our opinion that the pipeline is not downstream of a distributIon center. (See Drawing #1] 2) The Farmington (Bluffview) Power Plant 8" is an intrastate natural gas pipeline that transports natural gas directly from a transmission line to large volume customers (Animas and Bluffview power plants). [See Drawing #1] 3} The Tucumcari Mainline is an intrastate natural gas pipeline that transports natural gas directly from a transmission to distribution centers (Tucumcari Townplant, Northeast Regulator Station, and Baker Kelso Regulator Station). This pipeline is a continuation of the CloviS Transmission Line that transports natural gas from EI Paso Natural Gas Company's intrastate pipeline system to New Mexico Gas Company's Northeast Area distribution centers, and is not downstream of a distribution center. NMGC has designated a valve at the Clovis Border Regulator Station as the end point of the Clovis Transmission Line and the beginning of the Tucumcari and Cannon mainlines. (See Pictures 1,2&3, and Drawing #2) The Clovis Transmission line and the Tucumcari and Cannon mainlines all operate at 300 psig. The Tucumcari Mainline runs approximately 62 miles from Mile Post 0 at the Clovis Border Regulator Station to the Tucumcari Townplant distribution center. (See Drawing #3) 4) The Cannon Mainline is an intrastate natural gas pipeline that transports natural gas directly from a transmission to distribution centers (Northwest Regulator Station, Mixon lane Regulator Station, Hayfield Farmers Regulator Station, 6084 Regulator Station, Port Air Dairyman Regulator Station, Port Alr Farmers Regulator Station, and Clovis Expansion Regulator Station). This pipeline is a continuation of the Clovis Transmission Une that transports natural gas from EI Paso Natural Gas Company's Intrastate pipeline system to New Mexico Gas Company's Northeast Area distribution centers, and is not downstream of a distribution center. (See Drawing #2, and Pictures 1,2&3) 5) The Northeast Distribution Mainline is an intrastate natural gas pipeline. The pipeline is a loop line that can be used to: (a) transports natural gas from EI Paso Natural Gas Company's interstate pipeline via NMGC's Clovis Transmission Une to the Tucumcari Townplant distribution center without going to the Clovis Border Regulator Station, or (b) transport natural gas to the Clovis Town plant distribution center via the Tucumcari Mainline. (See Drawing 1t4) 2 <<>> 15057974752 nmgco NMGCO 11:03:29a.m. 09-28-2009 6/6 6} The Portales Mainline Is an intrastate natural gas pipeline that transports natural gas from the Clovis Transmission line, and Transwestern's interstate transmissIon line to distribution centers (Portales Townplant, Grinder Regulator Station, Baxter Regulator Station, Midway Regulator Station, and Cameo Regulator Station). Pressure on the ptpeline is regulated at 200 psigjust downstream of the Transwestern interconnect at the Clovis Transmission line. There are no service lines on the Portales Mainline and the pipeline runs approximately 20 miles to the Portales Townplant distribution center. If you have any questions or need further Information, please call me at (505) 490'()675. Sincerely, ~ t1JJl. JOa~ Johnson, A xc: Mr. Richard l. Backes, Vice President - Technical Services Gary Roybal, DOT Compliance Manager for NMGC Rebecca Carter, Regulatory Project Manager 3 <<>> - '\ ;;\ 't '" !. .. ~ .. ... !'; ... .. <<>> ~\ gJ I 1..-.... - j j j j j j j j j j j <<>> # 3 Tucumcari <<>> 1 I , i ,"-,j ... ~ I 1 I !' i_" "".~_+'}''T'.'0,.'''.~ -j ..... [ :::J -i I i} <<>> I I (\ ~ ii-' w '" Q .,. '" :} l r,I '" 0: ~. ~ \'"' ~ ~ \ i .~\-\ "'S':~"C ,,-- <<>> "i:", ,,- @ 'i., \' j 1. -"" ',,, <> 1t' '" '" ;r ~ , '\; '" ;t ;), V\ <. ~.$~- J~ ~ ..... ~ t·. t: '·\~::ii,. ',,' ---.-,. t' <<>> BEFORE T°C/ois Distributi Tucuncirí- <<>> TICTUre Tucuncari Marline <<>> Picture # 3 d. tonsa gifted siren CANNON Clois Distributi <<>> New Mexico GAS COMPANY Thomas M. Domme Vice President & General Counsel 505-697-3834 (direct) 505·250-1419 (eel!) tOnl.ciomme(jJ'nmgco.com September 25, 2009 OCT 0 1 2009 Jeff Wiese U.S Department of Transportation Pipeline & Hazardous Materials Safety Administration East Building, 2nd Floor 1200 New Jersey Avenue, SE Washington, DC 20590 A velino Gutierrez NM Public Regulation Commission P.o. Box 1269 Santa Fe, NM 87504-1269 Joe Johnson Pipeline Safety Bureau NM Public Regulation Commission P.O. Box 1269 Santa Fe, NM 87504-1269 Re: September 15,2009 New Mexico PSB request for opinion/interpretation. Gentlemen, New Mexico Gas Company ("NMGC") is in receipt of a September 15, 2009 request for opinion/interpretation ("Request") from Mr. Joe Johnson, Acting Bureau Chief of Pipeline Safety for the State of New Mexico ("PSB"). A copy of the Request is attached for your convenience .. The Request asks for an opinion/interpretation on whether six identified pipelines operated by NMGC are transmission or distribution pipelines and provides an interpretation of 49 c.F.R. 192.3. Our initial review of the Request raises concerns and questions about the procedural validity of the Request, and well as the scope and factual details of the Request, and we will be preparing a detailed response to the Request. In short, in NMGC's view, the interpretation of the regulation in the Request is incorrect in several respects, and fails to recognize the provisions in the remainder of the definition as well as the history behind this issue. NMGC anticipates providing its response within ten days. By way of brief background, this issue has been the focus of many discussions and meetings in New Mexico between representatives of PSB and .the gas utility since at least 1992. It was NMGC's understanding that these discussions were ongoing. As recently as 2007, a settlement discussion was held between PSB and the utility, and over the last two years additional conversations were held between the former PSB Bureau Chief, Bruno Carrara, and NMGC. NMGC anticipated and was told to anticipate a response from PSB directly to NMGC regarding PSB's latest position in these ongoing discussions. NMGC was never informed and was not aware that PSB was intending to submit the Request, and NMGC's input into the form of the request was not sought. NMGC remains of the opinion that discussion in New Mexico would be the more fruitful avenue for resolution and intends to approach PSB to attempt further discussions on these issues. P.O. Box 97500 * Albuquerque, NM 87199-7500 ., p: 888 NMGASCO • www.nmgco.com <<>> Jeff Wiese, et al. September 25,2009 Page 2 As an aside, it is not clear, but it appears that the Request is being made under 49 C.F.R. 190.11 for informal guidance and interpretation. If so, then the Request is technically misdirected to the Associate Administrator, and should be redirected or forwarded consistent with 190.11 (b) to the Office of Pipeline Safety generally for an informal interpretation. Further, although not spelled out in 190.l1(b), as indicated above, NMGC intends to respond to the Request to provide a fuller and more detailed picture of the issue presented. To the extent leave is required to provide such a response under 190.11 (b), NMGC seeks such leave. Finally, because the Request could have far reaching implications throughout the State of New Mexico, to other states, and even to other utilities, NMGC will be soliciting input from other gas utilities and the American Gas Association on this issue and will either incorporate these positions in its response, or solicit direct input by these entities . • u"-.....n. Domme Vice President and General Counsel cc: Rick Backes Gary Roybal Rebecca Carter P.O. Box 97500' Albuquerque, NM 87199-7500 p: 888 NMGASCO" www.nmgco.com <<>> New Mexico GAS COMPANY Thomas M. Domme Vice President & General Counsel 505-697-3834 (direct) 505-250-1419 (cell) tnrn.dommc(ai nmgco_col1l OCT 132009 October 12,2009 VIA FEDERAL EXPRESS Mr. Jeffrey Wiese U.S Department of Transportation Pipeline & Hazardous Materials Safety Administration East Building, 2nd Floor 1200 New Jersey Avenue, SE Washington, DC 20590 Mr. A velino Gutierrez NM Public Regulation Commission P.O. Box 1269 Santa Fe, NM 87504-1269 Mr. Joe Johnson Pipeline Safety Bureau NM Public Regulation Commission P.O. Box 1269 Santa Fe, NM 87504-1269 Re: New Mexico Gas Company's Position Concerning New Mexico PSB September 15, 2009 Request for Opinion/Interpretation of Certain Transmission and Distribution Pipelines Gentlemen: New Mexico Gas Company ("NMGC") is in receipt of correspondence dated September 15, 2009 from Joe M. Johnson, acting Bureau Chief of the New Mexico Pipeline Safety Bureau ("PSB"). As indicated in our initial correspondence to you on September 25, 2009, NMGC submits this more detailed response to the PSB's September 15, 2009 letter in order to set forth more facts and to provide NMGC's position with regard to these issues. OPERATIONAL BACKGROUND: NMGC is a local distribution company which provides service to approximately 500,000 customers throughout the State of New Mexico, and operates approximately 1502 miles of transmission lines and 13060 miles of distribution lines. NMGC purchased these gas assets from Public Service Company of New Mexico ("PNM") on January 30, 2009. At issue here are six separate distribution lines, which PSB seeks to have redesignated as transmission lines. Attached as Attachment A, is a map diagramming four of the lines in dispute: Tucumcari mainline, Northeast distribution mainline, Cannon mainline, and Portales mainline ("Clovis Area Lines"). Also shown on Attachment A is the Clovis mainline which is not part of this dispute. Attached as Attachment B is a diagram depicting a representation of the other two lines in P.O. Box 97500. Albuquerque, NM 87199-7500 • p: 888 NMGASCO • www.nmgco.com <<>> Wiese, et al. October 12, 2009 Page 20f9 dispute, the Animas Power Plant line, and the Farmington Bluffview Power Plant line ("Farmington Area Lines"). Clovis Area Lines (Attachment A) The five pipeline segments shown on Attachment A distribute gas to the eastern portion of NMGC's service area. As indicated on the map, EI Paso Natural Gas ("EPNG") and Transwestern Gas Company ("TWO') deliver gas to NMGC's system at two locations in this area, the Texico Border Station ("Clovis City Gate") and the TW Border Station ("Portales City Gate"). NMGC takes custody of the gas at these locations and delivers it to end-users. NMGC considers the Clovis City Gate, and Portales City Gates as "distribution centers" for this service area. Clovis City Gate: EPNG delivers gas to the Clovis City Gate at a pressure of approximately 300 psig. The pressure is reduced at the EPNG Border Station, located in Texas, from approximately 790 psig to approximately 300 psig for delivery into the Clovis City Gate, located in New Mexico. Clovis ML: The Clovis ML, consisting of 8.38 miles of 8-inch steel pipeline and 8.28 miles of IO-inch steel pipe, delivers gas from the Clovis City Gate to the Clovis Border Station. See Attachment C for a schematic of the Clovis Border Station. This segment of pipeline is downstream of the Clovis City Gate, is already designated a transmission line and is not subject to the request for interpretation contained in the PSB letter. Tucumcari ML: The Tucumcari ML has an MAOP of 300 psig and is comprised of 46.6 miles of 6-inch steel pipe and 15.6 miles of 8-inch steel pipe. The Tucumcari ML delivers gas to 20 service meters connected directly to the pipeline and to the community of Tucumcari. This segment of pipeline is downstream of the Clovis City Gate. Northeast Distribution ML: The Northeast Distribution ML has an MAOP of 300 psig and is comprised of 15.9 miles of 4-inch steel pipe and 8.3 miles of 6-inch steel pipe. The Northeast Distribution System is connected to the Clovis ML, east of the Clovis Border Station and ties into the Tucumcari ML. This segment of pipeline delivers gas to 43 service meters connected directly to the pipeline. This segment of pipeline is downstream of the Clovis City Gate. Cannon ML: The Cannon ML has an MAOP of 300 psig and is comprised of 8.7 miles of 6-inch steel pipe and 1.1 miles of 8-inch steel pipe. This segment of pipeline delivers gas to 26 service meters that are directly connected to the pipeline and to Cannon Air Force Base. This segment of pipeline is downstream of the Clovis City Gate. Portales City Gate: TW delivers gas to the Portales City Gate at a pressure of approximately 1000 psig. The pressure is reduced to approximately 300 psig for delivery into the Clovis ML and cut to 200 psig for delivery into the Portales ML. The Portales City Gate is the point where NMGC takes custody of the gas for distribution to the end-user. P.O. Box 97500. Albuquerque, NM 87199-7500 • p: 888 NMGASCO • www.nmgco.com <<>> Wiese, et al. October 12, 2009 Page 3 of9 Portales ML: The Portales ML has an MAOP of 200 psig and is comprised of 2.25 miles of 5-inch steel pipe, 2.95 miles of 6-inch steel pipe and 6.7 miles of 8-inch steel pipe. The Portales ML begins at the Portales City Gate and delivers gas to the community of Portales. Farmington Area Lines (Attachment B) Blanco Hub and Carlton Regulator Station: NMGC takes custody and transfer of gas into its system at the Blanco Hub. Gas is then transported through the Crouch Mesa Transmission Line to the Ronald Regan Regulator Station where the pressure is reduced and is delivered to the Bluffview ML. The Carlton Regulator Station comes off the Bluffview ML and drops the pressure to the Animas ML and the Farmington High Pressure Distribution Line. Custody of the gas entering this system is at the Blanco Hub. Farmington Power Plant Pipeline (Bluffview ML): The Bluffview ML has an MAOP of 770 psig and is comprised of approximately 3.77 miles of 8-inch steel pipe. NMGC takes custody of gas at the Blanco Hub, which ties into the Crouch Mesa Transmission line. The Bluffview ML is connected to the Crouch Mesa Transmission Line, which has an MAOP of 1220 psig. The pressure is reduced to 705 psig at the Ronald Reagan Regulator Station before entering the Bluffview pipeline. This segment of pipeline delivers gas to Animas ML, Farmington High Pressure Distribution Line and to the Farmington Power Plant. This line is downstream of a distribution center (Blanco Hub), is not dedicated for the sole use of the Farmington Power Plant, and is available to deliver gas to other end-users. Animas ML: The Animas ML has an MAOP of 600 psig and is comprised of approximately 0.56 miles of 6-inch steel pipe. The Animas ML is connected to the Bluffview ML. The pressure is reduced from 705 psig to 445 psig at the Carlton Regulator Station before entering the Animas pipeline. This segment of pipeline delivers gas to the Animas Power Plant. Additionally, gas is delivered into the Farmington high Pressure Distribution Line at the Carlton Regulator Station at a pressure of 200 psig. This line is downstream of the Blanco Hub distribution center and the Carlton Regulator Station distribution center, is not dedicated for the sole use of the Animas Power Plant and is available to deliver gas to other end-users. RELEVANT CHRONOLOGY REGARDING CLASSIFICATION ISSUES By way of background, NMGC sets forth this chronology of events which are relevant to consideration of these issues: • August 18-20, 1992 - Mr. Joe Johnson, Pipeline Safety Inspector, performs an annual compliance inspection for the Clovis and Portales, N.M. townplants. P.O. Box 97500. Albuquerque, NM 87199-7500 • p: 888 NMGASCO • www.nmgco.com <<>> Wiese, et al. October 12, 2009 Page 4 of9 • October 9, 1992 - PSB issues a Notice of Probable Violation ("NPV"), attached as Attachment D, in which it cited Gas Company of New Mexico, a division of Public Service Company of New Mexico ("Gas Company"), and NMGC's predecessor, regarding the Clovis ML and Tucumcari ML, citing non-compliance with § 192.705, Transmission Lines; Patrolling and § 192.706 (B), Transmission Lines: Leakage Surveys, for not operating the Clovis ML and the Tucumcari ML as transmission lines. • November 12, 1992 - The Gas Company responds to PSB acknowledging that the Clovis ML is operated at above 20% SMYS and, therefore, is a transmission line. The Gas Company, however, did not agree that the Tucumcari ML was a transmission line and submitted the following response: "The Clovisffucumcari mainline which is a 127 mile segment of pipeline has historically been designated as distribution pipeline using the definition that it did not transport gas from a gathering line or storage facility to a distribution center or storage facility. Designated as such, annual patrol and leakage survey was performed in accordance with Sections 192.721 and 192.723 respectively. GCNM has reviewed the System Certifications for the Clovisffucumcari mainlines and are in agreement that the Clovis pipeline segment which is operating at above 20% SMYS shall be patrolled and leak surveyed utilizing the Section 192.705 and 192. 706(B) as applicable to this segment. This segment of pipeline is scheduled to be patrolled and leak surveyed between November 16 thru November 30, 1992 and in the future shall be patrolled on a quarterly basis and leak surveyed annually." • January 21, 1993 - Albino O. Zuniga, P.E. and Pipeline Safety Engineer and Rey S. Medina, Director acknowledged and agreed with Gas Company of New Mexico's conclusion that the Clovis ML was a transmission line because it operated above 20% SMYS. They responded as follows: "In regard to the Clovisffucumcari area pipelines and the probable violations with Section 192.705 and Section 192.706(B) cited in the same letter, we agree with your conclusion that the Clovis pipeline segment operating above 20% SMYS is a transmission line." • Between 1992 and 2007, PSB conducted several Compliance Inspections regarding the operating status of the Tucumcari ML, Portales ML, Cannon ML, Northeastern Distribution ML and Clovis ML. Except for the Compliance Inspection conducted in 2007, all other Compliance Inspections since 1992 accepted the operating status (as distribution mains) of the Tucumcari ML, Portales ML, Cannon ML and the Northeast ML. It should be noted that the same inspector that conducted the 1992 Compliance Inspection and several subsequent Compliance Inspections is also the same PSB P.O. Box 97500" Albuquerque, NM 87199-7500 ., p: 888 NMGASCO .. www.nmgco.com <<>> Wiese, et al. October 12, 2009 Page 5 of9 Inspector that conducted the 2007 Specialized Inspection. PSB has not identified nor addressed any safety concerns or considerations, changes in regulation, policy or conditions of operations that warrant a change in operating status for these pipelines. However, PSB apparently lifted the violation for the Tucumcari ML since the issue was not mentioned as a NPV for the next 14 years. • May 29-30, 2007 - Joe Johnson, PSB Inspector, performs a Specialized Audit of the Tucumcari ML. • July 2, 2007 - Mr. Bruno Carrara, P.E., PSB Bureau ChieflPipeline Safety Engineer, issues a NPV. PSB cites the following probable violation: "Item I -§192.706 Transmission lines: Leakage surveys. Leakage surveys of a transmission line must be conducted at intervals not exceeding 15 months, but at least once each calendar year. The Tucumcari Mainline is a transmission line as defined in Part 192. Records reviewed indicate that the Tucumcari Mainline was last surveyed for leakage on December 10,2002 and November 17,2003." • August 3, 2007 -PNM responds to the NPV and disputes the probable violation. PNM asserts that the Tucumcari ML is a distribution line and is not a transmission line as defined in §49 CFR 192.3. • October 4, 2007 - Bruno Carrara, P.E., PSB Bureau ChieflPipeline Safety Engineer, responds that on September 17, 2007, Mr. Joe Johnson met with certain PNM personnel in the Clovis area and asserted that the Tucumcari ML was not downstream of the "distribution center". Additionally, Mr. Johnson asserted that the Cannon ML, Portales ML and the Northeast Distribution ML were also transmission lines. • November 9, 2007 - In accordance with PSB's correspondence dated October 4, 2007, PNM scheduled and conducted a compliance/settlement conference with PSB. PSB has had no further written correspondence with PNM or its successor, NMGC. • June 12, 2008 - At the request of PSB, PNM provides operations information regarding the Tucumcari ML, Cannon ML, Portales ML and the Northeast Distribution ML. • September 10-11, 2008 - Joe Johnson, PSB Inspector, conducts a Specialized Compliance Inspection of the Farmington, NM townplant. • October 2, 2008 - Bruno Carrara, P.E., PSB Bureau ChieflPipeline Safety Engineer, issues a NPV for the Farmington townplant. PSB cites non-compliance with § 192.705, Transmission Lines; Patrolling and § 192 - **truncated:** true - **body characters:** 70133