TGS suggests that the proposed rule be amended as follows: "a requirement that a review of leak complaints by trained personnel must be completed and documented by 10:00 a. m. each day for calls received by midnight on the previous day."

TPA suggested during the initial rulemaking that the establishment of a specific time for completion of supervisory reviews of leak complaints is appropriate, and the Commission should be commended for establishing a deadline. However, in light of the possibility that leak complaints could be called in on the day before a holiday or weekend or during a weekend, the deadline for supervisory review should be set at 10:00 of the next business day. This slight change will accommodate the delays inherent in the scheduling of work for weekends and holidays.

The Commission disagrees with some of these comments. The purpose of the proposal is to ensure that if a leak is hazardous, it is being addressed. Human review is necessary to determine if the leak has been graded properly, and the review should be conducted by someone with authority, not just knowledge, in case the leak grade needs to be changed. The requirement that the review be conducted by a supervisor was already in §8.205(3) and was not proposed to be changed. With respect to the timing of the review, however, the Commission agrees that it is reasonable to change the wording as it was proposed to allow the deadline to be 10:00 a.m. of the next business day.

Regarding the proposed amendment to §8.210(a)(1), CenterPoint stated that it supports the use of the federal criteria for incident reporting and the concomitant elimination of the current duplicative incident reporting regime. In particular, it should allow operators to utilize their experience under the federal regime to determine when an incident is significant in light of its severity and relative effect on the communities in which they operate. However, CenterPoint commented that the Commission also proposes some more troublesome changes to other parts of the regulation. In §8.210(a)(2)(F), the proposed requirement that the telephonic report include the telephone number of the operator's on-site person, CenterPoint commented that, in almost all cases, the crew responding to a gas-related incident will be acting as first responders, not as trained fire investigators or insurance adjusters who can accurately render damage estimates or opine about the cause and origin of the incident. These employees' first tasks are to make the area safe, protect life and property, and then conduct certain tests. Needless to say, the first few hours after an incident can be chaotic and dangerous. The crew may be hard pressed to accomplish even the basic tasks of protecting life, property, and the integrity of the system during that time period. In addition, many crews do not carry a mobile telephone and thus communicate to their respective offices by radio only. It would be more helpful and appropriate for the Commission to contact the crew's supervisor or another local company representative during those critical first hours after an incident. Thus, CenterPoint suggests that proposed subsection (a)(2)(F) be changed to require only the telephone number of a contact person rather than the number of an on-site employee. Atmos Energy commented that while Atmos Energy is not opposed to providing the Commission with the telephone number of on-site personnel, Atmos Energy stresses that the work priority for on-site personnel is making the situation safe, not responding to telephone inquiries. The Commission appreciates that the primary obligations of gas company first-responders is to deal with emergent events. However, having the telephone number of the operator's on-site person assists the Railroad Commission staff in determining whether the Commission need to go on-site, whereas contacting a crew supervisor or other local company representative would not provide the Commission with specific data regarding the conditions at the incident site. The rule allows an operator two hours to make the telephonic report, so this should permit sufficient time for making the telephone call and providing the information necessary for the Commission to fulfill its obligations.

Several entities commented on the proposal to add subparagraph (G) in §8.210(a)(2), requiring a report of the estimated property damage, including the cost of gas lost, to the operator, others, or both. CenterPoint stated that an accurate estimate of the damage (other than that required to determine whether the incident is reportable) may be impossible during the first day after an incident. For example, the amount of gas lost cannot be accurately measured until the time of the rupture and the size of the hole are determined. The damage estimate requirement should also await the written report due 30 days after the incident. Atmos Energy stated that it is not opposed to providing an estimate of property damage at the time the telephonic report is made, but stated that the estimate will be very rough, at best. TPA has no objection to the requirement to report estimated damage with the telephonic report, however, deleting this provision would make the natural gas reporting requirements consistent with the requirements found under the reporting requirements for hazardous materials and carbon dioxide pipelines in §8.301. If the damage estimate provision remains in the final rule, TPA wants to be certain that the Commission is aware that any such estimates will be very rough. Accurate estimates of property damage cannot be made until after the investigation is competed and the extent of necessary repairs is determined. The Commission agrees that the initial estimates will necessarily be very rough, but is interested primarily in knowing whether the damage is over or under $50,000. Under the definition of "incident" in 49 CFR §191.3, if an operator is calling to report a release in which there is no death or injury and no media involvement, then the call is being made because the estimated property damage is $50,000 or more. Further, the requirement to make an estimate of property damage in the initial telephonic report is not new; only the amount has been changed (increased from $5,000 to $50,000).

The Commission proposed to amend §8.210(a)(2)(H) to add examples of significant facts that should be reported. Ignition, explosion, rerouting of traffic, evacuation of any building, and media interest are included as significant facts relevant to the accident or incident. Atmos Energy commented that it is uncertain if "significant facts" are distinguishable from "significant events" which cause an event to become a reportable event even if no injury occurs and the stated property damage threshold is not met. As an example, the evacuation of any building is listed as a "significant fact." If "building" means "structure" which would include a residence, then the evacuation of a single residence becomes a "significant fact" which should be included in the telephonic report if the incident is reportable for other criteria reasons. On the other hand, if the "significant fact" of a single residence evacuation is equated with a "significant event," then all evacuations become reportable events which will cause a spike in every operator's telephonic reports. Atmos Energy suggests that the Commission clarify its intent to distinguish between "significant events" and "significant facts." TPA commented that the inclusion of the evacuation of any building as a significant fact to be included in the telephonic report places a classification of "significant" on single home evacuations. While those evacuations will be significant to the individual residents of a home, reporting such information will not contribute meaningfully to pipeline safety data. It would seem to be more beneficial to gather data related to evacuations impacting larger numbers of individuals, such as schools or commercial buildings, and TPA would suggest that such an addition be made to this particular reporting requirement. The Commission disagrees with comments that interpret this proposal as converting an otherwise unreportable incident into a reportable incident. The requirement to include "other significant facts" in a telephonic report is not new; the only change is to add examples of facts that are significant enough to be reported if a report is necessary. An incident that would not be reportable under the standards in §8.210(a)(1) does not become reportable just because of a "significant fact," such as ignition, explosion, rerouting of traffic, evacuation of any building, or media interest. The significant fact is simply additional information to be reported.

The proposal to add new subsection (e), relating to leak reporting, to §8.210, garnered extensive comments. CenterPoint commented that the new reporting mechanism would apparently require operators to enter 27 different items of information about each leak and, while the preamble to the rules suggest that an electronic data interchange system will allow the transmission of the required data by spreadsheet, it is still likely that errors will occur that will require manual entry or at least correction. For a large operator such as CenterPoint that experiences thousands of leaks in a 6 month period, it would be administratively burdensome to correct or verify the potentially thousands of pieces of information contained in these semi-annual reports. CenterPoint believes that this new report is unnecessary since the Commission already has the right to audit leak records under current law. However, if the Commission still desires to implement this new reporting requirement, CenterPoint suggests that a summary of the types of leaks encountered on its system would be a more efficient and equally informative method of gathering the information that the Commission seeks. Instead of entering the information for each particular leak, an operator could provide a total for each category of information for all leaks it experienced during the reporting period. If the Commission requires more information, it would be able to audit behind these numbers to obtain this data as well as insure its accuracy. Finally, the reference to an operator's "pipeline system" does not make it clear whether the report must include leaks on non-jurisdictional facilities (such as customer house piping) as well as those on the operator's pipeline facilities. Such leaks are not required to be monitored under Commission rules nor are they presently included in the annual report required by 49 CFR §191.11. In order to resolve this ambiguity, CenterPoint suggests the subsection be amended to refer to leaks on "pipeline facilities" so as to incorporate the corresponding definition already contained in §8.5.

Atmos Energy commented that the information required to be reported is already available to the Commission and requiring the information to be provided in the online format is duplicative. Further, in the event the semi-annual reporting requirement is adopted, Atmos Energy submits that the rule should be revised to allow for a reasonable period of time between the end of the semi-annual period and the online reporting due date for the leak information. Also, the online reporting should be specifically directed to below ground leaks.

CPS Energy recommends that Form PS-95 be required to be filled out for below ground leaks for only the following reasons:

1. below ground leaks are what present a potential danger to the public;

2. CPS Energy's experience at capturing the data on above ground leaks has shown that they are typically on threaded connections, non-hazardous, and do not present a danger to the public due to the extremely small quantities of gas that is vented to atmosphere from these leaks;

3. according to the instructions for completing the PHMSA Annual Reports for Distribution or Transmission systems; Forms F 7100.1-1 and F 7100.2-1, a non-hazardous release of gas that can be eliminated by lubrication, adjustment or tightening is not defined as a leak. Since most aboveground leaks can be eliminated by lubrication, adjustment or tightening, CPS Energy feels that these should not be included in the proposed reporting requirements;

4. many gas operators do not currently report or grade above ground leaks;

5. the number of above ground leaks repaired is far greater than the number of below ground leaks repaired and will require a substantial amount of time to collect and input the data into the PS-95 on-line form; and

6. little value will be realized by capturing the data for above ground leaks when compared to the time and expense required to collect and input the data.

TGS believes the detail that is required to be reported is burdensome and will require expensive modifications to our existing processes and software programs. TGS can comply with semi-annual reports with less detail on the seven items listed out in the proposed rule without an appreciable increase in costs. This can be accomplished if the report will aggregate the items similar to the OPS Annual Gas Distribution Report twice a year without the specific detail requirements on each leak. As proposed, the detail required also appears to be in conflict with the OPS definitions of what is considered a leak. As defined in the instructions of PHMSA F 7100.1-1 form, "A leak is defined as an unintentional escape of gas from the pipeline. A non-hazardous release that can be eliminated by lubrication, adjustment, or tightening, is not a leak." Based upon this definition, there seems to be a difference in the proposed rule and the PHMSA rules which will create confusion in reporting and data analysis between PHMSA and the State of Texas. If these changes cannot be implemented, then TGS requests a workshop be conducted to review this proposed rule change with industry to determine if some changes can be accomplished.

TPA commented that the final rule is unclear as to whether the reporting requirement only applies to local distribution company (LDC) operators as it states in the preamble of the rule. TPA requests the Commission clarify in the final rule that the semi-annual reporting requirement only applies to LDCs. Midstream pipeline operators are required to report leaks that meet the requirements of 49 CFR 191.3 to the Commission. Further, leaks are repaired. Pipeline operators do not have the same types of leaks, nor leak grading system or repair schedule in comparison with the LDCs.

TxOGA commented that the leak reporting requirements proposed in §8.210(e), as drafted, appear to apply to all operators of pipelines, and possibly even to production facility operators. The Commission's impact analysis for this portion of the proposal speaks only of the cost to gas distribution companies. TxOGA now understands that it is the intent of the Commission that this section of the proposal apply only to gas distribution companies and to operators of plastic gas transmission lines. TxOGA concurs with this limitation on the regulation and recommends adding the italicized wording to clarify the requirement: (e) Leak Reporting. Each operator of a gas distribution system or plastic gas transmission line shall submit to the Division a list of all leaks repaired on its pipeline systems. The report shall list all leaks identified on the entire pipeline system. Each such operator shall also include the number of unrepaired leaks remaining on the operator's systems by leak grade. Each such operator shall submit leak reports using the Commission's online reporting system, Form PS-95, by June 30 and December 31 of each calendar year, in accordance with the PS-95 Semi-Annual Leak Report Electronic Filing Requirements, set out in Figure 1 of this subsection. The report includes:..."

The Commission agrees that the term "pipeline facilities" is preferable to the term "pipeline systems," and has made that change in the text of the adopted rule. The Commission disagrees that having leak information available to audit is sufficient. The purpose of the reporting requirement is to enable the Commission to accumulate data from across all systems to identify trends or problems more comprehensively. The Commission also disagrees that operators would be unable to correct data already reported; that will be possible on the online reporting system. The Commission agrees that a non-hazardous release of gas that can be eliminated by lubrication, adjustment, or tightening is not defined as a leak; however, there are other above ground leaks that cannot be eliminated using these methods, and those must be reported as leaks. The Commission adopts §8.210(e) with clarifying wording regarding the definition of the term "leak" for the purpose of submitting the Form PS-95. The Commission also agrees that, because this rulemaking includes the elimination of the plastic pipe failure report, this rule must include information about any leak on any plastic pipe, not just distribution plastic pipe. The leak reporting requirements apply to operators of local gas distribution companies, operators of regulated plastic gas gathering lines, and operators of plastic gas transmission lines, and the Commission has modified the wording in §8.210(e) to clarify this intent.

Regarding the proposal to amend §8.215(b) to permit gas companies to use commercially available odorization equipment rather than having the Commission approve odorization equipment, CenterPoint commented that while this change avoids having the Commission rule on "permissible" odorizers and odorants, the term "commercially available" does not necessarily equate to satisfactory performance. In particular, the fact that equipment is commercially available would not guarantee that a product meets the performance criteria that would still be required under the rule. A more prudent approach would be to require "industry accepted" or "industry standard" equipment. In addition, CenterPoint requests that the rule contain a "grandfather" clause that would provide that all previously approved or currently used equipment would meet the standards established under the rule. Atmos Energy commented that the use of any existing shop-made odorization equipment should be grandfathered for a reasonable period of time. TPA seeks to clarify that non-commercial odorization equipment already in place, which has been approved by the Commission, may continue to be used by operators. TxOGA understands that it was not the intent of the Commission to disallow continued use of previously approved odorization devices and recommends the following italicized language to clarify that intent: (b) Odorization equipment. Gas companies shall use commercially available odorization equipment in any installation made on or after (the effective date of this rule). Shop-made or other odorization equipment previously approved by the Commission and in use as of (the effective date of this rule) may continue to be used in its current service, but may not be re-installed in a different location.