1 1 STATE OF NEW HAMPSHIRE 2 PUBLIC UTILITIES COMMISSION 3 October 6, 2004 - 10:00 a.m. Concord, New Hampshire 4 5 RE: DRM 04-149 6 RULEMAKING: Readoption and amendment of PUC Chapter 500 Rules regarding gas service. 7 8 PRESENT: Chairman Thomas B. Getz, Presiding 9 Commissioner Graham J. Morrison 10 11 Jonathan Osgood, Clerk 12 13 APPEARANCES: (No appearances taken) 14 15 16 17 18 19 20 21 22 23 24 Court Reporter: Steven E. Patnaude, CCR 2 1 I N D E X 2 Page No. 3 STATEMENTS BY: 4 Ms. Crowe 4 5 Mr. Shortlidge 8 6 Mr. Traum 13 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 {DRM 04-149} (10-06-04) 3 1 P R O C E E D I N G S 2 CHAIRMAN GETZ: Okay. Good morning. 3 We'll open the hearing in docket DRM 04-149 regarding PUC 4 Rules Chapter 500, Gas Service. On August 19, 2004, the 5 Commission voted pursuant to RSA 541-A to initiate a 6 readoption and amendment of Chapter 500 of the rules for gas 7 service, which are due to expire on January 28, 2005. Among 8 other things, the rules, as amended, would bring the rule 9 into conformance with new Commission responsibilities and 10 with current industry practices, while increases the safety 11 of gas service consistent with economic realities and 12 increasing the ability of the Commission to monitor utility 13 performance. A rulemaking notice required by RSA 541-A was 14 filed with the Office of Legislative Services on 15 September 10. The notice sets forth today as the day for 16 public hearing and notes the deadline for submission of 17 written comments, which is October 18. 18 I'll note that the hearing this morning is 19 held pursuant to RSA 541-A:11 under the Administrative 20 Procedures Act. And, the purpose of the hearing is to take 21 public comment on the proposed rules. Also note for the 22 record that both Commissioner Morrison and myself are 23 present at the hearing, and, pursuant to RSA 541-A:11, a 24 quorum of the members of the Commission is required for the {DRM 04-149} (10-06-04) 4 1 adoptions of rules proposed by it. 2 Before we take public comment, turn to Staff, 3 is there anything we need to address before we take the 4 comments? 5 MS. AMIDON: No. 6 CHAIRMAN GETZ: Then, we will hear 7 comment from the public. We can start at this first table, 8 if there's any comment. And, if there is comment, identify 9 yourself by your name and company you work for or who you 10 represent please. 11 MS. CROWE: Good morning, Chairman Getz 12 and Commissioner Morrison. My name is Pat Crowe. I'm an 13 attorney for KeySpan. With me today is Leo Cody, who is a 14 principal engineer. We would, first of all, like to thank 15 the Commission for the opportunity to address the proposed 16 rules. And, another thing we think is quite important is to 17 acknowledge the hard work that Staff has put in to this 18 proposal. My understanding is that there has been many, 19 many meetings to resolve issues and discuss issues. We 20 intend to address just a few issues this morning and to 21 discuss some minor issues that we think only need 22 clarification in the tech session that we understand follows 23 this meeting. 24 First of all, I would comment on the proposed {DRM 04-149} (10-06-04) 5 1 rule which falls under "Construction and Maintenance", it's 2 506.02(l). It appears on Page 16 of the initial proposal 3 dated August 19th. That rule indicates that "the utilities 4 shall notify an excavator of the presence of abandoned 5 facilities identified pursuant to other sections of the rule 6 when the excavator proposes to excavate in that area 7 pursuant to RSA 374:5, II. We believe that this section 8 raises an issue that is within the scope of the Underground 9 Utility Prevention Damage Program, and that is the 800 10 rules, and should be addressed more appropriately in that 11 section of the rules. It's our understanding that this 12 particular issue of notifying excavators of abandoned 13 facilities is one that is scheduled to be discussed by the 14 legislative subcommittee of the New Hampshire Dig Safe 15 Advisory Committee that is to meet on October 19th. To the 16 best of our knowledge, this appears only in the 500 rules. 17 And, if it remains there, it would only, at this point in 18 time, be applicable to gas utilities, not to all other 19 utilities. We also point out that there are Sections (i) 20 and (j), which would require us to map and maintain records. 21 We have no problem with those sections. And, that starts in 22 February 2005, and that would be the beginning point of 23 establishing a database for the information that would be 24 used to notify contractors. But the bottom line for us is, {DRM 04-149} (10-06-04) 6 1 because there is a subcommittee, and these are related to 2 underground facilities, we believe it should be taken up by 3 the legislative subcommittee that is scheduled to meet. 4 Within the same section, 506.02, I would 5 refer you to Subsection (s)(1), which, in the August 19th 6 initial proposal, is on Page 19. That section relates to 7 developing and maintaining written security plans. And, we 8 have no problem with that. We have one in place. However, 9 if you look at that section, there are two subsections, 10 indicating that "such plans shall be disclosed only to 11 individuals having a need to know their content or the 12 Commission's Safety Division, upon reasonable request, on 13 utility premises." We have no problem with Subsection 2. 14 We think that addresses concerns that documents this 15 sensitive won't be placed in the agency's hands and be 16 subject to a public records request. 17 However, with respect to Section 1, it seems 18 to us problematic and fraught with some difficulties about 19 "Who are the individuals who need to know? Who determines 20 who they are?" So, we'd be happy to discuss that further in 21 the technical session, but we do perceive some difficulty 22 with that one section. 23 CMSR. MORRISON: Are you looking for 24 that to be defined more clearly, enumerated who can, who {DRM 04-149} (10-06-04) 7 1 shall, who decides? 2 MS. CROWE: We will discuss -- We would 3 certainly be open to discussing that or eliminating it. 4 Either one, considering, depending upon the wording. But 5 what we're most concerned with is a public records request 6 and thus that sensitive information is subject to a battle, 7 really. 8 I have one other comment relating to -- 9 actually, I think I have two other sections to comment on. 10 One is on the reporting requirement that relates to the rate 11 of return. And, that is on Section 509.01. In the initial 12 proposal, dated August 19th, it begins on Page 25 and 13 continues through Page 27. This is an entirely new report. 14 And, what we would suggest for consideration is that there 15 be an annual filing of the return. To provide this detailed 16 information every quarter, we perceive to be 17 administratively burdensome on the Company, and we see it as 18 -- we certainly don't want to not give the Commission the 19 information that it requires. But we think an annual number 20 gives you an overall view and a better view of what the 21 Company's return would be. So, we would ask you to consider 22 that, and we would be open to and happy to discuss that 23 further in the technical session. 24 And, one other comment relates to customer {DRM 04-149} (10-06-04) 8 1 bill adjustments. And, I realize that Ms. Noonan is not 2 here, but we certainly will advise her of our concern, and 3 that is 505.06. This one I didn't have the page ready for 4 you, I do now, 505.06 is on Page 13 of the initial proposal 5 dated August 19. The current rule contains language that 6 provides an opportunity, we think, to make a more precise 7 calculation in adjusting bills, because it allows for 8 determination of the adjustment based on identifying when 9 the error first developed, in the case of fast or 10 non-registering meters, and that language has been deleted 11 in the proposed rule. We would ask that -- we intend to 12 submit written comments on this and be happy to discuss it 13 in the tech session, or especially with Ms. Noonan. 14 I have no additional oral comments today. 15 Thank you for your time. 16 CHAIRMAN GETZ: Thank you. 17 Mr. Shortlidge. 18 MR. SHORTLIDGE: Good morning, 19 Commissioners. Seth Shortlidge, of the law firm Gallagher, 20 Callahan & Gartrell, on behalf of Northern Utilities. While 21 my comments today will be brief, they will not be as brief 22 as they were yesterday. 23 Let's see. To start off with, Northern 24 Utilities would like to thank the Staff for developing these {DRM 04-149} (10-06-04) 9 1 rules as part of a collaborative process with the utilities. 2 This is a wonderful opportunity to work between the 3 utilities and the Staff to come up with a draft of rules 4 that we believe is a strong draft. That said, we do have a 5 handful of items that we hope to discuss further with Staff 6 during the technical session. A view of those, which I 7 believe rise to the level that need to be mentioned on the 8 public record, include on, in Section 506.01, regarding the 9 Pipeline Safety Standards, and I know that everyone's 10 printer seems to print these things out a little 11 differently, but on my page it's Page 14. And, this is Item 12 (c). The provision reads that "only an individual who meets 13 operator qualifications in accordance with 49 CFR Part 192, 14 Subpart (n), shall perform an activity which", and the 15 important provision here is, "is an activity involving 16 operations, maintenance or new construction." 17 Northern Utilities strongly believes that 18 this is a good idea. The only concern that we have is that, 19 at this point, the training standards, especially those for 20 contractors that we use for new construction, have not yet 21 been developed. Northern Utilities is working with members 22 of the Northeast Gas Association to develop training 23 programs and certification programs for contractors and 24 others. Those programs will be up and running by the end of {DRM 04-149} (10-06-04) 10 1 2005, take probably a half year to begin to get construction 2 crews certified and ready to go. So, we would only suggest 3 that the Commission implement a delayed effective date for 4 this provision, potentially the end of 2006. And, this is a 5 provision, as I understand, this is also being addressed at 6 the federal level, and these changes are being implemented 7 on a delayed provision at the federal level. So, it's 8 important that we keep New Hampshire consistent with that. 9 Our second concern is one that we share with 10 KeySpan. And, this is in provision 506.02(l), regarding the 11 marking of abandoned facilities. Now, the provision, as 12 KeySpan correctly points out, requires that each utility 13 notify an excavator for the presence of abandoned facilities 14 identified pursuant to PUC 506.02 (j) and (k), when the 15 excavator proposes to excavate in the area. Now, (j) and 16 (k), as you will note, require the mapping of abandoned 17 facilities after February 1, 2005. And, that records of 18 those facilities be maintained after February 1, 2005. 19 Northern is extremely concerned that the 20 marking of abandoned facilities, the practice of marking of 21 abandoned facilities, will lead to a great deal of confusion 22 with excavators, because some of the abandoned facilities 23 will be marked and others will not. And, when an excavator 24 comes to a facility and discovers a facility that's {DRM 04-149} (10-06-04) 11 1 unmarked, making a determination of whether or not that's 2 abandoned or not, what the status of that is, could lead to 3 a lot of confusion, and perhaps some unsafe practices on the 4 part of excavators. It's our understanding that this 5 provision is being considered by the Dig Safe Advisory 6 Committee in a meeting coming up later in the month. And, 7 we also believe that this is clearly an issue regarding the 8 Dig Safe requirements and should be taken up as part of the 9 overall Dig Safe rulemaking, that would be the PUC 800 10 rulemaking. 11 Our next provision of concern is on -- is PUC 12 507.02. And, this is in regards to the -- this is 13 507.02(b), it's on Page 19. This is a new requirement that 14 "requires each utility receiving natural gas to install and 15 maintain adequate instruments and meters to obtain complete 16 information after such receipts of gas." At this point, the 17 facilities from which Northern Utilities obtains gas already 18 have metering facilities, but those are run by the 19 interstate pipeline company. Northern believes it's 20 duplicative and will result in increased expense to have 21 separate new metering facilities installed by the utilities, 22 which will simply duplicate the records already being 23 created by the interstate gas company. And, without any 24 evidence that those records are inaccurate, we believe that {DRM 04-149} (10-06-04) 12 1 the additional expense is not an efficient use of our funds. 2 CMSR. MORRISON: Mr. Shortlidge? 3 MR. SHORTLIDGE: Yes. 4 CMSR. MORRISON: Is it -- So, it's NU's 5 position that they accept the billing, as far as dollars and 6 quantities served to them by the interstate, without 7 additional metering? 8 MR. SHORTLIDGE: Yes. We believe those 9 meters are accurate. There are regulations adopted by the 10 Federal Energy Regulatory Commission regarding metering and 11 billing. And, we just, without evidence that there is some 12 erroneous measurement going on, which we have no reason to 13 believe that such is occurring, it seems inefficient to put 14 two meters to measure the same flow. 15 CMSR. MORRISON: Thank you. 16 MR. SHORTLIDGE: And, let's see. Our 17 next concern is in the provisions of 508.04. And, there are 18 several new requirements in (d), (e), (f), and (g), 19 regarding when leak inspections and leakage surveys need to 20 occur, what buildings they need to occur in. And, this 21 seems to be a complete problem of definitions. But, for 22 instance, in (d), "each utility shall conduct leakage survey 23 services to public buildings." We believe that's extremely 24 important. What we need to know is, what, in fact, is a {DRM 04-149} (10-06-04) 13 1 "public building"? Likewise, in (e), "each utility shall 2 conduct a leakage survey of main lines in business 3 districts." Also, a very important requirement, but we need 4 to have some ability to determine what is, in fact, a 5 "business district"? 6 And, I think with that, that wraps up the 7 sort of high-level concerns of Northern. There are a few 8 other places in the rule where we have some concerns that we 9 will certainly mention in our written comments. Even 10 though, hopefully, we can work out these issues in the tech 11 sessions, and perhaps the result will be an agreed upon 12 proposed modification to the rule. So, with that, I'd turn 13 it over to the next party. 14 CHAIRMAN GETZ: Sir? 15 FROM THE FLOOR: Nothing. Thank you. 16 CHAIRMAN GETZ: Mr. Traum. 17 MR. TRAUM: I guess, from the OCA's 18 viewpoint, we'd also like to thank the Staff and the parties 19 for their efforts in putting this together. And, at this 20 point in time, we don't have any issues that raise to the 21 level that they have to be enunciated now. 22 CHAIRMAN GETZ: Thank you. Are there 23 any other comments? 24 MS. AMIDON: Yes. I omitted to request {DRM 04-149} (10-06-04) 14 1 you to recognize that we would have a technical session 2 following this hearing. So, that's my request. 3 CHAIRMAN GETZ: Okay. 4 MS. AMIDON: Thank you. 5 CHAIRMAN GETZ: We will acknowledge that 6 then. If there is nothing else, then we will close this 7 public hearing and wait for the filing of written comments 8 and take the matter under advisement. Thank you. 9 (Hearing ended at 10:24 a.m.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 {DRM 04-149} (10-06-04)