Utilities: New gas safety regulations could cost $100 M.

Capital New York | April 9, 2015 | Column by Scott Waldman

ALBANY—The state's utilities estimate it will cost more than $100 million to comply with new gas safety regulations the Public Service Commission adopted last month.

Site of a building explosion in Manhattan thought to be caused by a gas leak. (AP Photo/Bebeto Matthews)

The estimates were contained in a briefing prepared for Governor Andrew Cuomo on new pipeline safety regulations in the wake of two gas explosions in New York City in the last year that left 10 people dead. Federal regulators threatened to strip the state of about $4 million in annual funding if it did not strengthen oversight of gas pipelines.

As part of the new regulations, the state will now require more leakage tests on pipelines, additional drug and alcohol testing for repair crews and odorization of gas before it is put into a pipeline.

National Grid, one of the state's largest utilities, estimates it will cost $50 million over three years and $14 million each year thereafter to develop and conduct new leakage surveys and to conduct more atmospheric testing, according to the briefing, which was also sent to Senate Majority Leader Dean Skelos and Assembly Speaker Carl Heastie.

According to the briefing, Con Edison estimates the additional annual cost to be $55 million. New York State Electric & Gas says the new regulations will add $1 million to its annual costs while Rochester Gas & Electric puts the price tag at $1.5 million a year.

It was not immediately clear if those costs would be spread to ratepayers. A P.S.C. spokesman did not immediately return a request for comment.

The main reason for the additional oversight is the section of pipe that runs inside a building. In New York State, most gas meters are located on the outside of buildings. But in New York City, many are on the inside. The state is responsible for the pipeline up to the wall of a building. The new regulation, which extends that jurisdiction to include inside meters, falls in line with federal mandates. The additional state oversight will increase the burden on utilities, which will now be responsible for the upkeep and maintenance of the inside lines. Previously, those lines were regulated by the federal Pipeline and Hazardous Materials Administration.

Some of the costs could be mitigated with waivers from the P.S.C. that could extend the timeline of implementation. The regulations could prove to be a burden on some small businesses, but the P.S.C. could spread those among all ratepayers, the documents show. It will also result in additional testing, training and testing requirements.

“Urban areas in the state with older high rise buildings will likely bear the most impact because more inside gas piping will have to be inspected and any operation and maintenance work will have to be performed by an operator qualified professional,” P.S.C. officials wrote. “There are not entire regions in the state, however, where this rule making will have a disproportionate adverse impact on jobs or employment opportunities.”

Con Ed has warned that fulfilling the requirement would be difficult because it would have to inspect an additional 1 million inside sets. The utility also warned there were “not a sufficient number of persons in the labor market qualified to perform the tasks necessary.”

In September, P.S.C. chairwoman Audrey Zibelman ordered a review of the state's gas safety regulations “to make them at least as stringent as the corollary federal rules.”

P.S.C. spokesman James Denn said the costs would not necessarily be passed on to customers.

"It is premature to comment on the utilities’ filing because implementation plans have not been determined," he said. "The bottom line is the fact that the safety of the public is the first and foremost priority for the Commission."


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commented 2015-04-10 23:21:34 -0400 · Flag
This is stupid. If we were powered by renewable, how many safety inspectors would we need? What would the savings to the state be in just safety inspections to implement the Jacobson plan of 100% renwables by 2030?
@PAUSEnergy tweeted this page. 2015-04-10 23:09:44 -0400
PAUSE, People of Albany United for Safe Energy posted about Utilities: New gas safety regulations could cost $100 M. on PAUSE, People of Albany United for Safe Energy's Facebook page 2015-04-10 23:09:44 -0400
Utilities: New gas safety regulations could cost $100 M.
PAUSE, People of Albany United for Safe Energy
PAUSE is a grassroots group of individuals who have come together to promote safe, sustainable energy and fight for environmental justice. We engage the greater public to stop the fossil fuel industry’s assault on the people of Albany and our environment.