Customer-Owned Service Lines

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 192

[Docket PS-135; Amdt. 192-3]

RIN 2137-AC32

Customer-Owned Service Lines

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule.

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SUMMARY: This action requires operators of gas service lines who do not

maintain buried customer piping up to building walls or certain other

locations to notify their customers of the need to maintain that

piping. Congress directed DOT to take this action in view of service

line accidents. By advising customers of the need to maintain their

buried gas piping, the notices may reduce the risk of further

accidents.

EFFECTIVE DATE: September 13, 1995.

FOR FURTHER INFORMATION CONTACT: L. M. Furrow, (202) 366-2392,

regarding the content of this document, or the Dockets Unit (202) 366-

4453 for copies of this final rule or other material in the docket.

SUPPLEMENTARY INFORMATION:

I. Background

A. Customer Piping

RSPA's gas pipeline safety standards (49 CFR Part 192) apply to the

distribution of gas up to the end of a pipeline operator's service

line. A service line, as defined in Sec. 192.3, is a distribution line

that begins at a common source of supply, usually a main, transmission

line, or gathering line. The end of a service line is a customer meter

or a connection to a customer's piping, whichever is farther

downstream. If there is no meter, the connection to a customer's piping

marks the end of a service line. A customer is any person who contracts

with an operator to receive gas for consumption. Customer's piping (or

customer piping) refers to piping not owned by an operator through

which a customer receives gas.

When operators install customer meters, they usually install them

outdoors next to the building that houses the customer's principal gas

utilization equipment. If that equipment is not inside a building, the

meter may be installed next to the equipment. Either of these

installations may leave only a short segment of exterior customer

piping between the end of the operator's service line and the building

or equipment. Sometimes, however, operators install customer meters

farther away from buildings or equipment, perhaps at a private property

line or fence. The result is a much longer length of exterior customer

piping.

Regardless of length, customer piping downstream from an operator's

service line is not subject to the maintenance standards of Part 192.

However, according to the National Transportation Safety Board, twenty-

two states now require operators to monitor portions of customer

piping. Also, many operators voluntarily maintain customer piping up to

building walls. Still, for much customer piping, maintenance is the

responsibility of customers or piping owners, not operators of service

lines. In this regard, RSPA is preparing a report on the safety of

customer piping located downstream from service lines to see if there

is a need for further legislative or regulatory action. The report is

required by section 115(b) of the Pipeline Safety Act of 1992 (Pub. L.

102-508; 106 Stat. 3296).

B. Statutory Mandate

During a 7-month period beginning September 16, 1988, a series of

five service line accidents killed four people and injured 16 others in

Kansas and Missouri. The accidents happened on service lines supplying

gas to homes and were due to corrosion and other causes. As a result,

Congress became concerned about the safety of gas piping leading up to

buildings. Congress felt that customers of distribution pipeline

operators may not understand the need for basic maintenance of customer

piping.

Therefore, as provided by 49 U.S.C. Sec. 60113(a) (formerly section

18(b) of the

[[Page 41822]]

Natural Gas Pipeline Safety Act of 1968), Congress directed DOT to--

Prescribe regulations requiring an operator of a natural gas

distribution pipeline that does not maintain customer-owned natural

gas service lines up to the building walls to advise its customers

of--

(1) the requirements for maintaining those lines;

(2) any resources known to the operator that could assist

customers in carrying out the maintenance;

(3) information the operator has on operating and maintaining

its lines that could assist customers; and

(4) the potential hazards of not maintaining the lines.

C. Rulemaking Proposal

In response to this Congressional mandate, RSPA published a notice

of proposed rulemaking (NPRM)(59 FR 5168; February 3, 1994) on customer

notification. The NPRM proposed to define the piping covered by the

mandate (``covered piping''). The NPRM also proposed to establish the

details of advice that operators who do not maintain covered piping up

to building walls would have to give their customers.

In a supplemental notice of proposed rulemaking (SNPRM)(59 FR

13300; March 21, 1994), RSPA expanded the proposed rules to cover

certain exterior customer piping that is above ground. The SNPRM also

clarified that the proposed rules were not limited to operators who are

local distribution companies. Other operators (primarily transmission

companies) that supply gas to customers through service lines were

covered as well. RSPA also announced in the SNPRM that the proposed

rules did not apply to customer piping that branches from a customer's

primary gas supply line to supply gas to secondary equipment, such as

pool heaters and yard lanterns.

D. Advisory Committee Review

RSPA presented the NPRM and SNPRM for deliberation by the Technical

Pipeline Safety Standards Committee (TPSSC) at a meeting in Washington,

D.C. on May 11, 1994. TPSSC is RSPA's statutory advisory committee for

gas pipeline safety. The committee comprises 15 members, representing

industry, government, and the public, who are technically qualified to

evaluate gas pipeline safety. TPSSC's report of its deliberation is

available in the docket of this proceeding.

TPSSC voted unanimously to find the proposed rules technically

feasible, reasonable, and practicable, provided RSPA made the following

changes: (1) delete information on age, location, and material of

customer piping from proposed Sec. 192.16(a)(4); (2) when customer

piping does not enter a building, end covered piping at the point of

custody transfer; (3) apply the proposed rule only to buried

residential and small-commercial lines; and (4) delete ``transmission

or'' from proposed Sec. 192.16(a) to limit the rule to distribution

operators. The next section discusses how we handled TPSSC's

recommended changes in developing the final rule.

II. Discussion of Comments and TPSSC Recommendations

A. Commenters

We received written comments from 57 persons in response to the

NPRM and SNPRM. The comments came from: 47 pipeline operators; 5 state

pipeline safety agencies (Maryland, Kansas, Iowa, Michigan, and

Missouri); 4 trade associations (American Gas Association (AGA),

Interstate Natural Gas Association of America (INGAA), Western

Mobilehome Parkowners Association (WMPA), and Texas Gas Association

(TGA)); and 1 federal agency (National Transportation Safety Board

(NTSB)).

Most commenters directed their remarks to specific issues. This

section of the preamble discusses our resolution of significant issues

in light of comments and TPSSC recommendations.

B. The Term ``Customer-Owned Service Line''

The mandate applied to customer piping Congress called ``customer-

owned service lines.'' So the NPRM and SNPRM used this term to

designate the customer piping covered by the proposed rules.

Despite its statutory origin, many commenters felt the term

``customer-owned service line'' would be confusing in a Part 192

regulation. They said many service lines under Part 192 include piping

owned by customers. Consequently, they argued the term was too similar

to ``service line'' to distinguish customer piping not regulated by

Part 192 from service lines regulated by Part 192. The commenters

suggested as alternatives the names ``supply pipe,'' ``yard line,''

``fuel line,'' and ``customer-owned piping.''

We agree that ``customer-owned service line'' would be a misnomer

in Part 192. The term could easily be confused with ``service line,''

because some customers own the portion of a service line on private

property between a distribution main and customer meter. Also, other

customers (particularly tenants) may not own any of the piping through

which they receive gas from an operator. For these reasons, we did not

use the term ``customer-owned service line'' in the final rule.

At the same time, we did not name covered piping as commenters

suggested. Since Part 192 currently refers to piping beyond the end of

a service line as ``customer's piping'' (see Sec. 192.3, service line),

referring to that piping by another name would be confusing. Instead,

to designate piping covered by the final rule, we used ``customer's

piping'' with other descriptive wording (Sec. 192.16(a)).

C. End of Covered Piping

To delineate the customer piping covered by the proposed rules, the

NPRM and SNPRM defined the term ``customer-owned service line.'' The

definition proposed was: ``a pipeline that transports natural gas or

petroleum gas from a service line to (1) an exterior wall of a

building, or (2) end-use equipment'' (proposed amendment to

Sec. 192.3).

Most commenters thought the proposed end of covered piping was

unclear. One concern was the end of covered piping when customer piping

leads to more than one building. Another concern was the end when

customer piping leads both to a building and to outdoor equipment, such

as a lantern. Still another concern was the end when customer piping

does not enter a building, which happens at some plants. In regard to

plants, AGA argued the end should be at a location equivalent to a

building wall, such as the plant fence or point of custody transfer.

Similarly, TPSSC recommended ending covered piping at a custody

transfer point when there is no building.

As stated above, we intended the proposed rules to apply to

customers' primary gas supply lines. Branch lines that serve pool

heaters, yard lanterns, or other types of secondary equipment were not

intended to be covered. The final rule (Sec. 192.16(a)) clarifies this

point by covering customer piping up to gas utilization equipment only

when the customer's piping does not enter a building. Also, to avoid

the confusion of where covered piping ends when customer piping enters

more than one building, the final rule refers to the first building. We

used the term ``gas utilization equipment'' instead of ``end-use

equipment'' for consistency with present terminology in Part 192 (e.g.,

Sec. 192.197(a)(5)).

When customer piping does not enter a building, we agree that a

perimeter fence (or wall) surrounding the gas utilization equipment

serves the

[[Page 41823]]

purpose of a building wall under the mandate. Thus, when there is no

building, under the final rule, covered piping ends at the gas

utilization equipment or at the intersection of the first fence (or

wall) that encloses the equipment (if such a fence (or wall) exists).

The fence (or wall) may surround the plant, part of the plant, or just

the equipment.

We did not adopt custody transfer to demarcate the end of covered

piping when customer piping does not enter a building. Because custody

transfer arguably occurs when gas enters piping not owned by the

operator, none of the customer piping downstream from a service line

would come under the notification rule.

D. Aboveground Customer Piping and Short Sections of Piping Between

Meters and Buildings

Many commenters, including AGA and Missouri, recommended that the

final rule apply only to buried piping. Generally, the commenters felt

that aboveground piping presents less risk than buried piping. The

commenters said operators or customers would see any deteriorated

piping or they would smell any leaks. Further, the commenters

envisioned that any leaks would go directly to the atmosphere and not

migrate into a building. TPSSC also recommended that we limit the final

rule to buried piping.

The chief reason, however, that most commenters wanted to restrict

the final rule to buried piping was to reduce the number of customers

that would have to be notified. This point was emphasized by AGA at the

TPSSC meeting, convincing TPSSC to overturn an earlier vote against

excluding aboveground piping. Millions of additional customers would

have to be notified if aboveground piping were covered, since most

service lines, including lines that end at meters next to buildings,

connect to short sections of aboveground piping. For example, one

operator said it would have to send 1.3 million notices if the rule

covered aboveground piping, compared with 68,000 notices if only buried

piping were covered. This operator argued that since the accidents that

produced the mandate all involved buried piping, Congress did not

intend the mandate to cover aboveground piping. In addition, according

to WMPA, if the rule covered aboveground short sections of piping, it

would affect most of the 2,950 mobilehome parks in California with

master meter systems. WMPA said mobilehomes in these parks are usually

connected to gas meters by short flexible pipe that is the

responsibility of the mobilehome owner. WMPA recommended that the final

rule not apply to aboveground piping less than 6 feet long.

We too were concerned about the impact of the proposed rules on

short sections of piping between customer meters and buildings. So, in

the NPRM and SNPRM, we asked for public comment on whether these short

sections of piping are properly installed and periodically maintained.

One operator commented that trained operator or heating contractor

personnel install the short sections. Another operator said

installation is done according to the National Fuel Gas Code, interior

gas piping standards produced by the American National Standards

Institute and the National Fire Protection Association. Several

operators said that short sections seldom or never leak. A few

operators reported they periodically inspect short sections for leaks

and advise customers of any problems. However, one operator said it

does not check commercial or industrial piping. Two other operators

said they check for leaks when they turn gas on or when they receive

leak reports. WMPA commented that leak surveys normally include the

customer's connector pipe, and that mobilehome owners are advised of

any needed repairs.

These comments and the TPSSC recommendation convinced us that

aboveground customer piping should not be regarded as covered piping.

First of all, we recognize that if aboveground piping were covered,

almost every gas customer in the U.S. would have to be notified. And

there is no evidence that a notification program of this magnitude

would result in a comparable increase in public safety. Nor do we think

Congress contemplated a huge, nationwide notification program. Although

the mandate arguably applies to any customer piping up to building

walls, the fact that the accidents that led to the mandate happened on

buried service lines means it is reasonable to conclude that Congress

intended the mandate to cover only buried customer piping. This

conclusion is congruous with the risks involved, because as the

comments indicate, aboveground customer piping poses much less risk

than buried customer piping. Therefore, the final rule applies only to

buried piping (Sec. 192.16(a)). As a result, short sections of customer

piping between customer meters and building walls that are entirely

aboveground are not covered by the final rule.

E. Farm Taps and Industrial Taps

The proposed rules applied to customers served by ``farm taps'' or

``industrial taps.'' Farm tap is industry jargon for a pipeline that

branches from a transmission or gathering line to deliver gas to a

farmer or other landowner. Similarly, an industrial tap is a pipeline

that branches from a transmission or gathering line to deliver gas to

an industrial plant. So companies primarily engaged in the transmission

or gathering of gas operate most farm taps and industrial taps.

About a third of commenters argued against this proposal, saying

that Congress intended the mandate to apply only to local distribution

companies. In support, they pointed out that residential accidents

prompted the mandate. They also said that customers served by farm and

industrial taps are more likely than residential customers to be

familiar with the need to maintain gas piping. In this regard, a gas

production company said its lease agreements with farm tap customers

make them aware of their responsibility for maintenance. TPSSC also

recommended that we limit the final rule to distribution operators and

to residential and small commercial customers.

We do not believe these arguments and TPSSC recommendations justify

excluding farm tap and industrial tap customers from the final rule. To

begin with, while we recognize that Congress was primarily concerned

about residential customers, the mandate is not so limited. Congress

applied the mandate to ``operators of natural gas distribution

pipelines.'' But these operators are not just local distribution

companies as the commenters suggested. Some operators primarily engaged

in the gathering or transmission of gas also operate distribution

pipelines. They do so when they deliver gas directly to customers

through farm taps and industrial taps. In fact, because portions of

these delivery lines qualify as service lines, gathering and

transmission operators report them as distribution pipelines under 49

CFR 191.13. Moreover, farm and industrial tap customers are not immune

from harm by potential hazards that could occur on their piping. And

surely not all farm and industrial tap customers know enough about gas

piping safety to make even a single maintenance notice unnecessary.

Therefore, application of the final rule does not depend on the

nature of an operator's primary business. To clarify this point, we

reworded the final rule (Sec. 192.16(a)) so that it applies to

operators of service lines, instead of transmission or distribution

operators as proposed. Although this change made it unnecessary to

define ``farm tap'' or

[[Page 41824]]

``industrial tap,'' operators of these taps are not excepted from the

final rule.

We recognize that local distribution companies operate some metered

farm taps on transmission lines. In these cases, the local distribution

company is responsible for compliance with the final rule.

F. Meaning of ``Maintain''

The mandate applies to operators who do not ``maintain'' customer

piping up to building walls. What Congress meant by ``maintain'' is

important, because operators who maintain customer piping up to

building walls need not advise customers of the need for maintenance.

Because ``maintain'' is inexact, the NPRM and SNPRM proposed to clarify

the mandate by giving ``maintain'' a particular meaning: ``maintain * *

* to Part 192 standards'' (proposed Sec. 192.16(a)).

Commenters thought the standards in Part 192 were not an

appropriate gauge of whether an operator maintains covered piping as

Congress had in mind. One operator put it this way: while it may be

reasonable to conduct a leakage survey every 3 years (under

Sec. 192.723) up to the nearest building wall and, if a leak is

detected, shut off the flow of gas, it would not be reasonable to

maintain a customer's piping to meet all Part 192 maintenance

standards. Another operator thought the proposal was unreasonable

because it would require operators to send notices to customers even if

operators maintain covered piping according to State requirements, but

not to Part 192.

RSPA agrees that operators would have difficulty meeting Part 192

maintenance standards on covered piping. Operators may lack permission

from property owners to take maintenance action or lack the necessary

information upon which to base maintenance action. For example, under

Sec. 192.725, each disconnected service line must be pressure tested as

a new line. Yet operators probably would need access to the customer's

building and other permission from the customer or property owner to do

this test on a customer's piping. Another example is Sec. 192.455(a),

which provides that each buried pipeline installed after July 31, 1971,

must be protected against external corrosion. This regulation presumes

operators know the installation date of their pipelines, a fact they

may not know for a customer's piping.

Upon further consideration, we are defining ``maintain'' to mean

whatever maintenance is reasonable for operators to do on covered

piping, considering the Congressional intent. Although the legislative

history casts little light on what Congress meant by ``maintain,'' it

does show that Congress was concerned about corrosion-related accidents

on service lines.

Preventing and correcting hazardous leaks are the major safety

reasons to maintain gas pipelines. The comments show that many

operators already check customer piping between customer meters and

building walls for leaks. Some operators may check for leaks while

doing routine leakage surveys on their own pipelines under

Sec. 192.723. If a leak is found, depending on the nature of the leak,

they either shut off the flow of gas or warn the customer to repair the

leak.

Besides leakage checks, another reasonable maintenance activity is

to monitor customer piping for corrosion, a major cause of leaks on

metallic pipelines. More specifically, operators must periodically

monitor their buried metallic service lines for external corrosion

under Sec. 192.465. With permission from the land owner or tenant,

operators could also monitor covered piping according to this standard.

However, rather than take the specified remedial action, which might be

difficult to do on covered piping, they could shut off the flow of gas

or warn the customer to repair any harmful corrosion found.

Considering the reasons for maintenance, Congress's concern about

corrosion, present industry practices, and commenters' advice, we

believe ``maintain'' means periodic checking for leaks and corrosion,

with appropriate follow-up action. Thus, the final rule

(Sec. 192.16(a)) provides that operators who do not maintain covered

piping according to Sec. 192.465 (if applicable) and Sec. 192.723, with

appropriate remedial action, must send the customer a maintenance

notice.

In accordance with Executive Order 12898 on Environmental Justice,

we have considered the potential effect of this final rule on minority

and low income customers. Because the rule applies only to gas

operators who do not inspect certain customer piping, the rule will not

impose direct costs on gas customers. However, some customers may incur

indirect costs of the rule. Customers who own exterior gas piping and

decide to heed the gas company's maintenance advice could face large

repair bills, depending on the condition and amount of their piping.

Indirect costs can also arise when operators who inspect customer-owned

piping discover that it is leaking or otherwise unsafe and require

customers to repair the piping if gas service is to continue.

We cannot predict which customers would be likely to incur these

indirect costs. However, the proportion of minority and low income

customers that might incur them should be small, because most minority

and low income gas customers are tenants. As tenants, they can

reasonably be expected to refer the matter of piping maintenance or

unsafe piping to their landlords, who are responsible for corrective

action.

When minority and low income customers must bear the indirect costs

themselves, voluntary organizations and local welfare agencies can

reasonably be expected to provide assistance, especially in response to

gas shut off situations if the health of customers is affected. In

addition, we expect that states adopting this final rule will monitor

its effect on minority and low income gas customers and find additional

ways to lessen the indirect cost burden. For example, states may

require operators to stand the cost of maintenance or establish a fund

to pay for maintenance that minority and low-income customers cannot

afford.

Despite the potentially low impact of this final rule on minority

and low income customers as a whole and efforts to defray indirect

costs, the cost of piping maintenance will unavoidably be a hardship

for some minority and low income customers. Still, in view of the high

safety risk of deteriorating residential gas piping and Congress's

mandate that operators warn customers about this potential problem, we

see no federal regulatory alternative that would lessen the potential

cost burden. We will, however, examine this issue further in the report

to Congress on the safety of customer-owned service lines that is

required by section 115(b) of the Pipeline Safety Act of 1992 (Public

Law 102-508, 106 Stat. 3296).

G. Customer Responsibility

The NPRM and SNPRM proposed that operators who do not maintain

covered piping must notify the customer that ``the customer owns and is

responsible for the maintenance of the customer-owned service line''

(proposed Sec. 192.16(a)(1)). The purpose of this proposal was to alert

customers that the operator does not maintain the customer's piping.

AGA and several operators pointed out that customers who occupy

rental properties, especially commercial buildings, may not own the

piping through which they receive gas. Other commenters observed that

operators may not know who owns the customer's piping. One solution a

commenter suggested was that the notice advise

[[Page 41825]]

rental customers to refer the maintenance advice to the landlord.

Another consideration, not raised by commenters, is that many

states now require operators to do some maintenance on customer piping.

In these states, it would be incorrect for operators to notify

customers that the customers or their landlords are responsible for

maintenance of customer piping.

Thus, it appears the proposal could be confusing or incorrect in

some circumstances if included in maintenance notices. To avoid this

confusion, the final rule (Sec. 192.16(b)(1)) merely requires operators

to notify customers that the operator does not maintain the customer's

piping.

Some operators may do a level of maintenance on customer piping

(either voluntarily or under State law) that does not reach the minimum

level prescribed by the final rule. If these operators wish to avoid

advising customers that they do not maintain customer piping, they

would have to increase their maintenance to the minimum level.

H. Requirements for Maintenance

Under the mandate, operators who do not maintain covered piping

must advise their customers of the requirements for maintenance of that

piping. To carry out this feature of the mandate, the NPRM and SNPRM

proposed that operators notify customers ``of the essential elements

for proper maintenance * * * such as those listed in subpart M of [Part

192] or those listed in applicable local building codes'' (proposed

Sec. 192.16(a)(2)).

Many commenters, including Iowa, Michigan, AGA, and TGA,

recommended that the final rule not refer to Part 192 or local codes as

examples of the essential elements of maintenance. The objection

expressed most often was that Subpart M of Part 192 is not appropriate

for customer piping downstream from meters; it was written for

operators, not customers. Commenters also said the proposed rule was

indefinite about which sections in Subpart M to apply to customer

piping. Several commenters said that Subpart M and the local codes may

conflict with each other, forcing operators to choose which standard is

appropriate for customers to follow. One commenter stated it would be

unreasonable to require operators to learn the essential elements of

local building codes applicable to maintenance of customer piping and

then send that information to each customer. For example, one large

distribution company said it would be especially burdensome to examine

the details of local codes in the 535 cities, towns, and communities it

serves, and to continually keep abreast of them.

Alternatively, INGAA and an operator suggested that the final rule

specify the maintenance advice operators are to give customers, instead

of leaving it to the operator's discretion. INGAA said this approach

would minimize the potential liability for giving inappropriate advice.

The operator said it would reduce the confusion of different operators

giving different advice to similar customers. Two operators thought we

should limit the maintenance advice to periodic leakage surveys. Also,

two other operators advised us to mention corrosion control as an

example of essential maintenance.

We believe Congress used the word ``requirements'' in the sense of

actions that are necessary for maintenance, rather than required by law

for maintenance. So we proposed that operators use local codes, Subpart

M of Part 192, or other sources as a guide to identify essential

elements of maintenance. Although many commenters interpreted the

proposal to the contrary, we did not intend for operators to keep

abreast of local code requirements applicable to maintenance of

customer piping. Nor did we intend for notifications to bring customers

up to date about their obligations under local law.

We recognize, though, that the proposed rules gave operators wide

latitude to decide what maintenance advice to provide customers. We

also recognize that confusion could result if operators gave different

advice in similar situations. So we adopted the suggestion to specify

essential maintenance advice. We based the specified maintenance advice

on the recommendations of commenters and the decision discussed above

on the meaning of ``maintain.'' Since the specified maintenance advice

is commonly found in pipeline safety programs, we doubt it conflicts

with local codes.

Consequently, the final rule (Sec. 192.16(b)(3)(i)-(iii)) does not

require notice of any provisions of Subpart M of Part 192 or of any

local code requirements. It simply requires operators to notify

customers that their buried gas piping should be periodically inspected

for leaks; periodically inspected for corrosion, if the piping is

metallic; and repaired if any unsafe condition is found. By referring

to buried piping, the notice will encourage customers to apply the

advice to any buried piping they may have besides their primary supply

line.

I. Maintenance Assistance

The mandate requires that operators advise customers of any

resources known to the operator that could assist customers in carrying

out maintenance. In response, we proposed that operators notify

customers ``of available resources that could aid the customer in

obtaining maintenance assistance, such as the gas pipeline operator,

the state licensing board for plumbers and state plumbers'

associations, Federal and state gas pipeline safety organizations, the

local building code agencies, and appropriate leak detection, gas

utility, and corrosion protection contractors'' (proposed

Sec. 192.16(a)(3)).

Many commenters said it would be too burdensome to maintain current

lists of agencies, associations, and contractors over wide areas. They

said customers could easily find maintenance assistance by consulting

the local better business bureau or chamber of commerce. A few

commenters were concerned the proposed rule would cause suits to be

filed against the operator for unfair competition if notices omitted

appropriate contractors, or for negligence if recommended contractors

caused injuries or did unsatisfactory work. One commenter thought the

proposed rule was unfair because it would force operators to refer

customers to businesses that compete with the operators to provide

maintenance services on gas piping.

In view of these comments, we decided to require operators to give

only general advice about maintenance assistance. Operators need not

maintain lists of specific contractors that might do maintenance work

on customer piping. Although government agencies probably could advise

customers about State or local laws, this advice probably would not be

helpful in carrying out maintenance. Instead of advising inquirers

about the details of maintenance, agencies and associations probably

would refer them to contractors. Since customers can learn the names of

contractors through the yellow pages or local chambers of commerce, the

final rule does not require notice of specific contractors, agencies,

or associations. The rule (Sec. 192.16(b)(5)) simply requires notice

that the operator (if applicable), plumbers, and heating contractors

may be contacted for assistance in maintaining and locating the

customer's piping. Under this rule, if an operator does not offer such

assistance, it would not have to mention itself as a possible source of

assistance. At the same time, an operator may not mention only itself

[[Page 41826]]

as a source of assistance on customer piping.

J. Other Helpful Information

1. General

The mandate requires that operators provide information the

operator has on operating and maintaining its lines that could assist

customers. In turn, we proposed that operators notify customers of

``any information that the operator has concerning the operation and

maintenance of the customer-owned service line that could aid the

customer, such as information on excavation damage prevention, local

codes and standards (when applicable), and the age, location, and

material of the customer-owned service line'' (proposed

Sec. 192.16(a)(4)).

2. Age, Location, and Material

TPSSC and about a third of commenters urged us not to require

operators to provide information about the age, location, and material

of customer piping. Several commenters said that because the

information was site specific, operators could not use a notice

generally applicable to all customers, as contemplated in the NPRM.

Others said operators typically do not have the proposed information

about customer piping, and it would be an undue burden to get it. A

number of commenters also pointed out that the age of customer piping

may not correspond to the date the operator established gas service,

because the customer may have replaced or altered the piping since that

date.

We agree that operators may not have the proposed information about

customer piping, since they are not required by Part 192 to maintain

the piping. Also, obtaining the information would be a significant

burden that Congress did not intend operators to assume. The mandate

requires operators to give customers helpful information based on the

operation and maintenance of the operator's pipelines. The mandate does

not require operators to gather information about customer piping. Even

when operators do have some information about customer piping,

requiring them to add the information to notices might not allow the

operators to use a general notice to meet the notification rule.

Therefore, this final rule does not require operators to notify

customers of the age, location, and material of customer piping.

As a result, operators may send each customer a notice on the

proper maintenance of customer piping in general. Notices need not be

tailored to meet specific customer situations. However, operators who

have specific information about customer piping and wish to include it

in notices are encouraged to do so.

3. Local Laws

For reasons discussed above concerning proposed Sec. 192.16(a)(2),

several commenters suggested that the final rule not make operators

responsible for advising customers about local laws. Since local

building codes would be burdensome for operators to track, are the

responsibility of local agencies to enforce, and are unlikely to

contain instructions on how to carry out piping maintenance, the final

rule does not require notice of local laws.

4. Excavation Damage Prevention

Two operators asked us to clarify the information they would have

to provide about excavation damage. They suggested the notice stress

the need to locate piping before excavating and to dig with care.

We agree that this information would be helpful to customers,

because of the large number of gas pipeline accidents attributable to

excavation damage. The final rule (Sec. 192.16(b)(4)) reflects these

comments. However, operators are not required to notify customers to

contact ``one-call'' systems to learn the location of buried customer

piping before excavating. One-call systems provide such service only

for piping of companies that are members of the system. One-call

systems generally have no information regarding customer piping.

Apart from the maintenance requirements discussed above,

information about preventing excavation damage is probably the most

significant information operators have about operating and maintaining

their own pipelines that would be helpful to customers. In the interest

of producing a general notice limited to basic advice, the final rule

does not require notice of any other information related to operation

and maintenance of the operator's pipelines. However, operators may

supplement the required information as they deem appropriate.

K. Potential Hazards

The mandate requires that operators notify customers about the

potential hazards of not maintaining customer piping. As proposed in

the NPRM and SNPRM, operators would have to advise customers of ``the

potential hazards of not maintaining the customer-owned service line,

such as corrosion and gas leakage'' (proposed Sec. 192.16(a)(5)).

Only a few commenters addressed this proposal. Two commenters

thought it would be unfair if operators had to warn their customers

that gas piping can be hazardous, while their competitors, fuel oil and

electric companies, do not have to give a similar warning. One

commenter said that sending notices about potential hazards would not

be compatible with the goal of market expansion. Another commenter

requested that in the final rule, we insert ``reasonably foreseeable''

before ``potential hazard.''

Although we do not have discretion under the mandate not to require

notice of potential hazards, we did not find the arguments against such

notice persuasive. The risks involved in using fuel oil and electricity

have not demanded the same level of public attention as gas pipeline

risks. So, from a public policy standpoint, it is not unfair if only

gas pipeline operators must warn their customers of risks. Also, we do

not agree that warning customers of potential hazards is incompatible

with business expansion. Part 192 already requires operators to post

signs over their pipelines warning of potential danger (Sec. 192.707),

and to educate the public to recognize gas pipeline emergencies

(Sec. 192.615). These programs and the abundant advertisements about

using ``one call'' systems to guard against the hazards of excavation

damage have, to our knowledge, not adversely affected the growth of

business. Indeed, we believe people prefer to do business with socially

responsible companies that do not hesitate to publicize information

that could help prevent accidents. Finally, to qualify ``potential

hazard'' the way one commenter suggested would not enhance the clarity

of the final rule.

The proposal concerning notice of potential hazards is adopted in

this final rule as Sec. 192.16(b)(2)--the second item in the list of

information to be provided, rather than the last item, as proposed.

This rearrangement encourages operators to warn customers of potential

hazards at the beginning of notices instead of at the end. A notice may

mention just two potential hazards: corrosion and leaks. Most

commenters referred to these potential hazards in response to the

proposal, and service line accidents generally involve these hazards.

L. Frequency and Time of Notification

1. General

The mandate does not specify how often operators must give their

customers maintenance advice or when

[[Page 41827]]

they must give them the advice. To clarify these points, we proposed

that operators notify existing customers within 6 months after

publication of the final rule, and new customers within that time or

within 30 days after the service line is placed in service, whichever

is later (proposed Sec. 192.16(b)).

2. Number of Notices

Several commenters thought the final rule should clearly state

whether operators must notify a customer more than once. Other

commenters, including NTSB, felt a single notice to each customer would

not be sufficient. They recommended that operators send notices

annually (to refresh customer memory), every 2 years, every 5 years, or

occasionally.

A single notice sent to each present and future customer would

satisfy the mandate. None of the advocates for more frequent

notification showed that additional notices would significantly improve

safety. Furthermore, the cost of periodic notices would be high, and

the effect of customer notification on accident prevention is

uncertain. There is also an absence of accumulated accident data on

customer piping from which to project the benefits of sending multiple

notices to the same customers. Consequently, the final rule expressly

states that operators must notify each customer only once.

3. New Customers

Three commenters said the proposed rule was unclear whether ``new

customers'' meant new customers on new service lines or new customers

on existing service lines. A few operators said it would be a

tremendous burden to notify every new customer on an existing service

line because of the large changeover in customers. One operator said it

has over 100,000 of such new customers annually. These operators would

prefer to notify only the first customer on a new service line or to

send notices to all customers periodically.

For the mandate to have a continuing effect on customer safety,

each present and future customer must receive a maintenance notice if

the operator does not maintain covered piping. There would be no

continuing effect if operators were to notify just existing customers

and the first customers on new service lines. As these customers leave,

their successors might lack necessary maintenance information, and the

safety of customer piping might decline. So the final rule applies to

all new customers. Operators can mitigate the burden of notifying large

numbers of customers by inserting general notices in billing envelopes.

To avoid confusion, the final rule does not distinguish new

customers from existing customers. Instead, the rule (Sec. 192.16(c))

requires operators to notify each customer by a certain date, as

discussed next.

4. Time of Notification

AGA and several operators recommended a compliance time of 1 year

to notify existing customers, instead of 6 months as proposed. They

argued that operators would need more time to learn which customers to

notify, to draft and send notices, and to instruct personnel to handle

inquiries. These commenters also said more time would ease the burden

on staff by allowing operators to spread notifications over a longer

period.

For new customers, one operator advised that sending notices within

30 days after the customer's service begins would not fit the company's

billing cycle. AGA and INGAA suggested an appropriate time to notify

new customers would be the time of first billing, rather than when a

service line is placed in service.

We proposed a 6-month compliance period to notify existing

customers based primarily on our estimate of the time needed to prepare

and send out notices. However, in view of the additional information

commenters provided, 1 year now seems more appropriate. Further,

because service lines are often left in service during customer

changeover, the suggestion to notify new customers upon first billing

seems reasonable. However, some operators may not choose billing as the

method of notification. And, as one commenter remarked, many farm tap

customers who receive gas under a right-of-way agreement are not

billed. Considering the variations among billing cycles and the

alternative means of distributing notices, we believe 90 days after

first receipt of gas at a particular location would be a reasonable

deadline by which to notify new customers. Therefore, the final rule

requires operators to notify each customer not later than 1 year from

today or 90 days after the customer first receives gas at a particular

location, whichever is later (Sec. 192.16(c)).

M. Records

The mandate does not require that operators keep records of the

advice they give customers. However, as a way to check compliance, we

proposed that ``each operator must keep a record of the written

notifications'' (proposed Sec. 192.16(c)).

AGA and several operators said the type of record and the retention

time were unclear under the proposed rule. Maryland suggested that to

see if operators have notified customers, inspectors would have to

inspect a record of the date a notice was sent, the name of the

customer, and a copy of the notice. In contrast, several operators

thought keeping a list of notified customers and the dates they were

notified would be too burdensome. Three operators suggested the final

rule just require maintenance of a copy of the notice being sent to

customers.

To check compliance, RSPA and State inspectors will need to view a

copy of the notice operators send customers and evidence that notices

have been sent to customers. This evidence may relate to the overall

notification process, and need not be customer-specific. For example, a

record showing the approximate dates notices are mailed or a written

procedure for the notification process would be evidence notices have

been sent. More in depth checks on compliance could be conducted where

warranted without requiring more detailed records. Therefore, we

clarified the final rule to provide that operators must maintain a copy

of the notice currently in use and evidence that the notices have been

sent to customers as required (Sec. 192.16(d)). Evidence of

notifications more than 3 years old may be discarded.

N. Master Meter Operators

One commenter recommended that we specifically exempt operators of

master meter systems from the final rule. Operators of master meter

systems purchase gas from pipeline companies through master meters, and

then resell and distribute the gas to customers. The customers are

usually residents of mobilehome parks or housing projects, the

operator's primary enterprise.

In developing the NPRM, we assumed the proposed rules would not

affect many master meter operators because they generally own all gas

distribution piping up to each customer's dwelling. However, as stated

above, WMPA advised that the proposed rules would affect mobilehome

parks in California because of customer-owned short sections of

connector piping. Although that piping was aboveground and would not

come under the final rule, it is reasonable to assume that buried

connector piping may occur in some master meter systems. So the

proposed rule may have affected small entities to a larger extent than

we first pictured.

To mitigate this impact, the final rule (Sec. 192.16(c)) allows

master meter operators to continuously post a general

[[Page 41828]]

notice as an alternative to sending notices to customers individually.

This type of notification is appropriate for master meter systems

because there is commonly a prominent place visited by residents, such

as a management office, that is suitable for such posting.

Although the final rule probably does not affect many master meter

operators, we did not adopt the suggestion to specifically exempt these

operators. As operators of distribution pipelines, they come under the

mandate when they do not maintain buried customer piping up to building

walls. Also, there is no evidence to suggest that customers of master

meter operators have less need for safety information than customers of

other operators.

III. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Policies and Procedures

The Office of Management and Budget (OMB) does not consider this

final rule to be a significant regulatory action under section 3(f) of

Executive Order 12866. Therefore, OMB did not review the final rule.

Also, DOT does not consider the final rule to be significant under its

regulatory policies and procedures (44 FR 11034, February 26, 1979). A

final regulatory evaluation is available for review in the docket.

B. Executive Order 12612

We analyzed the final rule under the principles and criteria in

Executive Order 12612 (``Federalism''). The final rule does not have

sufficient federalism impacts to warrant preparation of a federalism

assessment.

C. Regulatory Flexibility Act

I certify, under Section 605 of the Regulatory Flexibility Act,

that this final rule will not have a significant economic impact on a

substantial number of small entities. For purposes of that act, small

entities supply gas to fewer than 10,000 customers, and most small

entities are operators of master meter systems. As discussed above,

most master meter operators do not come under the final rule because

they own all gas piping up to building walls. Master meter operators

that do come under the rule may comply merely by posting a notice in a

prominent location. So compliance cost will be nominal for the bulk of

small entities. The remaining small entities, mostly operators of

distribution systems in small towns, will be subject to the same rule

as other operators. But, as explained above, operators can either avoid

notification costs by maintaining covered piping, or mitigate costs by

including general notices in billing envelopes.

D. Paperwork Reduction Act

OMB has approved the information collection requirements of this

final rule under 44 U.S.C. Chapter 35.

List of Subjects in 49 CFR Part 192

Natural gas, Pipeline safety, Reporting and recordkeeping

requirements.

RSPA amends 49 CFR part 192 as follows:

PART 192--[AMENDED]

1. The authority citation for part 192 is revised to read as

follows:

Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60110,

60113, and 60118; 49 CFR 1.53.

2. Section 192.16 is added to read as follows:

Sec. 192.16 Customer notification.

(a) This section applies to each operator of a service line who

does not maintain the customer's buried piping up to entry of the first

building downstream, or, if the customer's buried piping does not enter

a building, up to the principal gas utilization equipment or the first

fence (or wall) that surrounds that equipment. For the purpose of this

section, ``maintain'' means monitor for corrosion according to

Sec. 192.465 if the customer's buried piping is metallic, survey for

leaks according to Sec. 192.723, and if an unsafe condition is found,

either shut off the flow of gas or advise the customer of the need to

repair the unsafe condition.

(b) Each operator shall notify each customer once in writing of the

following information:

(1) The operator does not maintain the customer's buried piping.

(2) If the customer's buried piping is not maintained, it may be

subject to the potential hazards of corrosion and leakage.

(3) Buried gas piping should be--

(i) Periodically inspected for leaks;

(ii) Periodically inspected for corrosion if the piping is

metallic; and

(iii) Repaired if any unsafe condition is discovered.

(4) When excavating near buried gas piping, the piping should be

located in advance, and the excavation done by hand.

(5) The operator (if applicable), plumbers, and heating contractors

can assist in locating, inspecting, and repairing the customer's buried

piping.

(c) Each operator shall notify each customer not later than August

14, 1996, or 90 days after the customer first receives gas at a

particular location, whichever is later. However, operators of master

meter systems may continuously post a general notice in a prominent

location frequented by customers.

(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) Evidence that notices have been sent to customers within the

previous 3 years.

Issued in Washington, D.C. on August 9, 1995.

Ana Sol Gutierrez,

Deputy Administrator.

[FR Doc. 95-20021 Filed 8-11-95; 8:45 am]

BILLING CODE 4910-60-P