# Distribution Facilities Replacements

- **operation:** document
- **citation:** 16 TAC § 8.209
- **title:** Distribution Facilities Replacements
- **source type:** regulation
- **agency:** Railroad Commission of Texas
- **status:** current
- **official:** true
- **published on:** Not available
- **effective on:** 2024-12-09
- **summary:** (a) Unless exempted by 49 CFR §192.1003(b), this section applies to each operator of a gas distribution system that is subject to the requirements of 49 CFR Part 192. This section prescribes the minimum requirements by which all operators will develop and implement a risk-based program for the remov
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- **markdown:** https://regulus.evalyn.ai/document/tx-tac-16-8-209.md
- **app url:** https://regulus.evalyn.ai/document/tx-tac-16-8-209
- **source url:** https://texas-sos.appianportalsgov.com/rules-and-meetings?chapter=8&interface=VIEW_TAC&part=1&title=16
**body:**

(a) Unless exempted by 49 CFR §192.1003(b), this section
applies to each operator of a gas distribution system that is
subject to the requirements of 49 CFR Part 192. This section
prescribes the minimum requirements by which all operators
will develop and implement a risk-based program for the
removal or replacement of distribution facilities, including
steel service lines, in such gas distribution systems. The risk-
based program will work in conjunction with the Distribution
Integrity Management Program (DIMP) using scheduled
replacements to manage identified risks associated with the
integrity of distribution facilities.
(b) Each operator must make joints on below-ground
piping that meets the following requirements:
(1) Joints on steel pipe must be welded or designed and
installed to resist longitudinal pullout or thrust forces per 49
CFR §192.273.
(2) Joints on plastic pipe must be fused or designed and
installed to resist longitudinal pullout or thrust forces per
ASTM D2513-Category 1.
(c) Each operator must establish written procedures for
implementing the requirements of this section. Each operator
must develop a risk-based program to determine the relative
risks and their associated consequences within each pipeline
system or segment. Each operator that determines that steel
service lines are the greatest risk must conduct the steel
service line leak repair analysis set forth in subsection (d) of
this section and use the prescriptive model in subsection (f)
of this section for the replacement of those steel service
lines.
(d) In developing its risk-based program, each operator
must develop a risk analysis using data collected under its
DIMP and the data submitted on the PS-95 to determine the
risks associated with each of the operator's distribution
systems and establish its own risk ranking for pipeline
segments and facilities to determine a prioritized schedule
for service line or facility replacement. The operator must
support the analysis with data, collected to validate system
integrity, that allow for the identification of segments or
facilities within the system that have the highest relative risk
ranking or consequence in the event of a failure. The
operator must identify in its risk-based program the
distribution piping, by segment, that poses the greatest risk to
the operation of the system. In addition, each operator that
determines that steel service lines are the greatest risk must
conduct a steel service line leak repair analysis to determine
the leak repair rate for steel service lines. The leak repair rate
for below-ground steel service lines is determined by
dividing the annualized number of below-ground leaks
repaired on steel service lines (excluding third-party leaks
and leaks on steel service lines removed or replaced under
this section) by the total number of steel service lines as
reported on PHMSA Form F 7100.1-1, the Gas Distribution
System Annual Report. Each operator that determines that
steel service lines are the greatest risk must conduct the steel
service line leak repair analysis using the most recent three
calendar years of data reported to the Commission on Form
PS-95.
(e) Each operator must create a risk model that will
identify by segment those lines that pose the highest risk
ranking or consequence of failure. The determination of risk
is based on the degree of hazard associated with the risk
factors assigned to the pipeline segments or facilities within
each of the operator's distribution systems. The priority of

service line or facility replacement is determined by
classifying each pipeline segment or facility based on its
degree of hazard associated with each risk factor. Each
operator must establish its own risk ranking for pipeline
segments or facilities to determine the priority for necessary
service line or facility replacements. Each operator should
include the following factors in developing its risk analysis:
(1) pipe location, including proximity to buildings or
other structures and the type and use of the buildings and
proximity to areas of concentrations of people;
(2) composition and nature of the piping system,
including the age of the pipe, materials, type of facilities,
operating pressures, leak history records, prior leak grade
repairs, and other studies;
(3) corrosion history of the pipeline, including known
areas of significant corrosion or areas where corrosive
environments are known to exist, cased crossings of roads,
highways, railroads, or other similar locations where there is
susceptibility to unique corrosive conditions;
(4) environmental factors that affect gas migration,
including conditions that could increase the potential for
leakage or cause leaking gas to migrate to an area where it
could create a hazard, such as extreme weather conditions or
events (significant amounts or extended periods of rainfall,
extended periods of drought, unusual or prolonged freezing
weather, hurricanes, etc.); particular soil conditions; unstable
soil; or areas subject to earth movement, subsidence, or
extensive growth of tree roots around pipeline facilities that
can exert substantial longitudinal force on the pipe and
nearby joints; and
(5) any other condition known to the operator that has
significant potential to initiate a leak or to permit leaking gas
to migrate to an area where it could result in a hazard,
including construction activity near the pipeline, wall-to-wall
pavement, trenchless excavation activities (e.g., boring),
blasting, large earth-moving equipment, heavy traffic,
increase in operating pressure, and other similar activities or
conditions.
(f) This subsection applies to operators that determine
under subsection (c) of this section that steel service lines are
the greatest risk. Based on the results of the steel service line
leak repair analysis under subsection (d) of this section, each
operator must categorize each segment and complete the
removal and replacement of steel service lines by segment
according to the risk ranking established pursuant to
subsection (e) of this section as follows:
(1) a segment with an annualized steel service line leak
rate of 5% or greater but less than 7.5% is a Priority 1
segment and an operator must remove or replace no less than
10% of the original inventory per year; and
(2) a segment with an annualized steel service line leak
rate of less than 5% is a Priority 2 segment. An operator is
not required to remove or replace any Priority 2 segments;
however, upon discovery of a leak on a Priority 2 segment,
the operator must remove or replace rather than repair those
lines except as outlined in subsection (g) of this section.
(g) For those steel service lines that must remain in service
because of specific operational conditions or requirements,
each operator must determine if an integrity risk exists on the
segment, and if so, must replace the segment with steel as
part of the integrity management plan.
(h) All replacement programs require a minimum annual
replacement of 8% of the pipeline segments or facilities
posing the greatest risk in the system and identified for
replacement pursuant to this section. Each operator with steel

service lines subject to subsection (f) of this section must
establish a schedule for the replacement of steel service lines
or other distribution facilities according to the risk ranking
established as part of the operator's risk-based program and
must submit the schedule to the Division for review and
approval or amendment under subsection (c) of this section.
(i) In conjunction with the filing of the pipeline safety and
regulatory program fee pursuant to §8.201 of this title
(relating to Pipeline Safety and Regulatory Program Fees)
and no later than March 15 of each year, each operator must
file with the Division:
(1) by System ID, a list of the steel service line or other
distribution facilities replaced during the prior calendar year;
and
(2) the operator's proposed work plan for removal or
replacement for the current calendar year, the
implementation of which is subject to review and
amendment by the Division. Each operator must notify the
Division of any revisions to the proposed work plan and, if
requested, provide justification for such revision. Within 45
days after receipt of an operator's proposed revisions to its
risk-based plan and work plan, the Division will notify the
operator either of the acceptance of the risk-based program
and work plan or of the necessary modifications to the risk-
based program and work plan.
(j) Each operator of a gas distribution system that is subject
to the requirements of §7.310 of this title (relating to System
of Accounts) may use the provisions of this subsection to
account for the investment and expense incurred by the
operator to comply with the requirements of this section.
(1) The operator may:
(A) establish one or more designated regulatory asset
accounts in which to record any expenses incurred by the
operator in connection with acquisition, installation, or
operation (including related depreciation) of facilities that
are subject to the requirements of this section;
(B) record in one or more designated plant accounts
capital costs incurred by the operator for the installation of
facilities that are subject to the requirements of this section;
(C) record interest on the balance in the designated
distribution facility replacement accounts using a monthly
interest rate equal to one-twelfth of the pretax weighted
average cost of capital last approved for the utility by the
Commission;
(D) reduce balances in the designated distribution
facility replacement accounts by the amounts that are
included in and recovered though rates established in a
subsequent Statement of Intent filing or other rate adjustment
mechanism; and
(E) use the presumption set forth in §7.503 of this title
(relating to Evidentiary Treatment of Uncontroverted Books
and Records of Gas Utilities) with respect to investment and
expense incurred by a gas utility for distribution facilities
replacement made pursuant to this section.
(2) This subsection does not render any final
determination of the reasonableness or necessity of any
investment or expense.
(k) A distribution gas pipeline facility operator shall not
install as a part of the operator's underground system a cast
iron, wrought iron, or bare steel pipeline. A distribution gas
pipeline facility operator shall replace any known cast iron
pipelines installed as part of the operator's underground
system not later than December 31, 2021.
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