{"operation":"document","citation":"PI-18-0019","title":"PSC — Pipeline Safety Interpretation","source_type":"guidance","agency":"Pipeline and Hazardous Materials Safety Administration","status":"guidance","official":true,"published_on":"2018-11-09","effective_on":null,"summary":"PI-18-0019 response to PSC concerning 192.740.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-18-0019.json","markdown":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-18-0019.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-18-0019","source_url":"https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/standards-rulemaking/pipeline/interpretations/69976/kentucky-psc-pi-18-0019-11-05-2018-part-192740.pdf","body":"<<<PAGE 1>>>\n\nU.S. Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Avenue, SE\nWashington, D.C. 20590\nN ~V O 5 2018\nMr. Michael J. Schmitt\nChairman, Kentucky Public Service Commission\n211 Sower Boulevard\nP.O. Box 615\nFrankfort, KY 40602\nDear Mr. Schmitt:\nThank you for your letter of September 6, 2018, requesting an interpretation on whether 49 CFR\n192.740 applies to certain \"farm taps\" required by Kentucky statute, and if so, whether\nresponsibility for maintaining regulators in accordance with that section lies with the production\nor gathering line operator, or with the customer.\nPart 192 defines a service line as a \"distribution line that transports gas from a common source of\nsupply to an individual customer.\" (49 CFR 192.3). A \"farm tap\" is not defined in Part 192, but\ncommonly refers to a pipeline directly connected to a source pipeline that transports natural gas\nto a customer along the source pipeline right-of-way, and thus, meets the definition of a service\nline in the pipeline safety regulations. A non-regulated production or gathering pipeline may be\nthe common source of supply for a regulated service line. The pipeline upstream of the service\nline retains its original functional identity or classification.\nBecause \"farm taps\" meet the definition of service lines, piping and appurtenances that comprise\na \"farm tap\" that are owned or maintained by an entity engaged in the transportation of gas, are\nsubject to the requirements of Parts 191 and 192 as a distribution service line, including the\nrequirements at§ 192.740.\nHowever, a service line ends at the connection to customer owned piping, or the outlet of the\nmeter, whichever is further downstream. Such piping and appurtenances that are owned by a\ncustomer or person not engaged in the transportation of gas ( e.g., a farmer or residential\ncustomer) are not service lines and are not subject to requirements in Part 191 or Part 192.\nTherefore, neither the customer nor the operator are required by federal regulation to maintain a\ncustomer owned regulator on a customer fuel line in accordance with§ 192.740.\n\n<<<PAGE 2>>>\n\nI hope this information is helpful. If you require additional information or assistance, please\ncontact John Gale by phone at 202-366-0434 or by e-mail at John.Gale@dot.gov.\"\nSincerely,\n\n<<<PAGE 3>>>\n\nMatthew G. Bevin Michael J. Schmitt\nGovernor Chairman\nCharlesG. Snavely Commonwealth of Kentucky Robert Cicero\nSecretary Public Service Commission Vice Chairman\nEnergy and Environment Cabinet 211 Sower Blvd.\nP.O. Box 615 Talina R. Mathews\nFrankfort, Kentucky 40602-0615 Commissioner\nTelephone: (502) 564-3940\nFax: (502) 564-3460\npsc.ky.gov\nSeptember 6,2018\nSkip Elliott\nAdministrator\nPipeline and Hazardous Materials Safety Administration\n1200 New Jersey Avenue, S.E.\nWashington, D.C. 20590\nPaul Roberti\nChief Counsel\nPipeline and Hazardous Materials Safety Administration\n1200 New Jersey Avenue, SE.\nWashington, D.C. 20590\nRe: Interpretation and Implementation of 49 CFR §192.740 in light of Kentucky\nFarm Tap Statute\nDear Mr. Elliot and Mr. Roberti,\nAs you know, the Kentucky Public Service Commission (Commission) is the\nKentucky state agency charged with enforcing the applicable regulations of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA) within the Commonwealth of\nKentucky. The purpose of this letter is to request guidance regarding the applicability of\n49 CFR §192.740 to certain natural gas installations that are required by a seemingly\nunique Kentucky statute.\nSpecifically, Kentucky Revised Statute (KRS) 278.485 requires every gas pipeline\ncompany that produces or gathers natural gas produced in Kentucky to make gas service\navailable to owners of property located within one-half air mile of its wells or gathering\n\n<<<PAGE 4>>>\n\nHoward Elliot\nPaul Roberti\nPage 2 of 5\nlines. This statute was designed to give people living in isolated areas access to\nresidential naturalgas that otherwise would not be available to them. These installations\nare commonlyreferred toas “farm taps.” To distinguish them fromother kinds oftaps on\nproduction orgathering lines, I will refer to thetaps required by KRS278.485 as “Statutory\nFarm Taps.”\nMost gas producer/gatherers subject to the statute do not voluntarily choose to\nprovide directtaps on their lines to consumers; rather, this is an obligation imposed on\nthem by statute. The Commission does not consider gas producer/gatherers that only\nfurnishgas service tocustomers if required by KRS278.485 to be naturalgas utilities.\nKRS 278.485 and its implementing regulations allocate specific ownership,\ninstallation and maintenance obligations between the gas company and the “applicant”\nfor gas service. KRS 278.485(2) states as follows:\nThe applicant for such gas service shall construct or cause to be\nconstructed, and shall maintain and keep in good repair the\nservice lines, and shall provide and installor cause to be installed,\nand keep in good repair, the necessary automatic gas regulators,\nand shall pay the entire cost thereof. The company, at its own\nexpense, shall provide, install and maintain the necessary gas\nmeters. (Emphasis added)\nKRS 278.485 also exempts producer/gatherers from various service obligations and\nliabilities applicable to natural gas utilities and distribution companies, such as\nmaintaining consistent pressure and assuring gas quality and availability. Importantly,\nthe statute also shields producer/gatherers from tort liability for damages caused by “any\ndefect or failure of any automatic gas regulator.”\nCommission regulations also recognize that the Statutory Farm Tap customer, not\nthe producer/gatherer, is responsible for maintaining any required pressure regulator. 807\nKentuckyUnbridledSpirit.com An Equal Opportunity Employer M/F/D\nUNBRIDLED Np/Rn\n-\n\n<<<PAGE 5>>>\n\nHoward Elliot\nPaul Roberti\nPage 3 of 5\nKAR5:026, whichapplies specifically toStatutory Farm Taps, defines “customer line”as\n“all equipment and material required to transfer natural gas fromthe tap on the gathering\nline tothe customer’s premises and includes the saddle ortapping tee, the firstservice\nshutoff valve, the meter, and the service regulator, if one is required.” Section 3(6)\nallocates the ownership and maintenance of “the meter and the service tap, including\nsaddle and firstservice shutoff valve” tothe company. Section 3(7) provides, “All other\napproved equipment and material required forthe service shall be furnished, installed,\nand maintained bythe customer at his expense and shall remain his property.”\nThe Commission seeks clarification ofPHMSA’s intention as tothe applicability of\n49 CFR §192.740 to these Statutory Farm Taps. 49 CFR §192.740, effective March 24,\n2017, imposes a new requirement that each pressure regulating device on a service line\ndirectly connected toa production, gathering ortransmission pipeline that is not operated\nas part of a distribution system must be inspected at least once every 3 calendar years.1\nInitially, the Commission requests a determination as to whether 49 CFR 192.740 is\n1 In pertinent part, the regulation provides:\n(a) This section applies, except as provided in paragraph (c) of this section, to any service line\ndirectly connected to a production, gathering, or transmission pipeline that is not operated as\npart of a distribution system.\n(b) Each pressure regulating or limiting device, relief device (except rupture discs), automatic\nshutoff device, and associated equipment must be inspected and tested at least once every 3\ncalendar years, not exceeding 39 months, to determine that it is:\n(1) In good mechanical condition;\n(2) Adequate from the standpoint of capacity and reliability of operation for the service in which\nit is employed;\n(3) Set to control or relieve at the correct pressure consistent with the pressure limits of\n§192.197; and to limit the pressure on the inlet of the service regulator to 60 psi (415 kPa)\ngauge or less in case the upstream regulator fails to function properly; and\n(4) Properly installed and protected from dirt, liquids, or other conditions that might prevent\nproper operation.\nKentuckyUnbridledSpirit.com An Equal Opportunity Employer M/F/D\nUN8RIDLEP SPIRIT\n\n<<<PAGE 6>>>\n\nHoward Elliot\nPaul Roberti\nPage 4 of 5\napplicable to Statutory Farm Tap installations, which existalmost exclusively onpipelines\nthat are notconsidered to be “regulatedonshore gathering lines” withinthe meaning of\n49 CFR §192.8(b) andhence are nototherwise subject to 49 CFR Part 192.\nOursecond question is, if it is PHMSA’s position that 49 CFR§192.740 applies to\nKentucky’s Statutory FarmTaps, whodoes PHMSAconsider responsible for performing\nthe inspections required bythat regulation? We notethat 49 CFR §192.740 does not\nimpose the inspection obligation on any particular person or entity; but rather, only\nrequires that the inspection be done. If it is PHMSA’s position that the gas pipeline\ncompany is responsible for performingthe inspection required by 49 CFR §192.740, we\nwould appreciate PHMSA’s guidance in reconciling the requirements of that regulation\nwith the allocation of ownership and maintenance obligationsunder Kentucky law.\nAs noted, the installation, maintenance and repair of the pressure regulating\nequipment subject to the inspection requirement imposed by 49 CFR §192.740 is\nspecificallyallocated by state statute to the customer in the case of aStatutory Farm Tap.\nIndustry representatives have expressed concern that if the inspection requirements of\n49 CFR 192.740 are placed on the producer or gatherer, they will be required to access,\nmanipulate, evaluate and opine on the sufficiency of equipment that belongs to the\nStatutory Farm Tap customer. Requiring gas producer/gatherers to inspect someone\nelse’s private property and possibly act upon the results of those inspections (e.g. shutting\noff service until the consumer’s equipment is replaced or repaired) raises a host of legal\nissues in the context of Statutory Farm Taps that may be unique to Kentucky and that\nPHMSA may not have anticipated or intended in promulgating 49 CFR 192.740.\nKentuckyUnbridledSpirit.com ic ‘11141 An Equal Opportunity Employer M/F/D\nUNSRIOLED SPIRIT\n\n<<<PAGE 7>>>\n\nHoward Elliot\nPaul Roberti\nPage 5 of 5\nIn light ofthese issues, werequest PHMSA’sguidance onwhether 49 CFR\n192.740applies tothese Statutory Farm Taps, and,if so,whether theproducer/gatherer\northe Statutory FarmTap customer isresponsible for performing the periodic inspection\nmandated by the regulation.\nSincerely,\nMichael J. Schmitt\nChairman\nKentucky Public Service Commission\nCc: Charles G. Snavely, Secretary, Kentucky Energyand EnvironmentCabinet\nRobert J. Cicero, Vice Chairman, Kentucky Public Service Commission\nTalina R. Mathews, Commissioner, Kentucky Public Service Commission\nGwen R. Pinson, Executive Director, Kentucky Public ServiceCommission\nKentuckyUnbridledSpirit.com An Equal Opportunity Employer M/F/D\nUNBRIDLED SPIRIT","truncated":false,"body_characters":10963}