The Railroad Commission of Texas (Commission) proposes amendments in Subchapter A to §8.1 and §8.5, relating to General Applicability and Standards, and Definitions; in Subchapter B to §§8.101, 8.115, 8.125 and 8.135, relating to Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines, New Construction Commencement Report, Waiver Procedure, and Penalty Guidelines for Pipeline Safety Violations; in Subchapter C to §§8.201, 8.205, 8.206, 8.209, 8.210, 8.225, 8.230, 8.235, and 8.240, relating to Pipeline Safety and Regulatory Program Fees, Written Procedure for Handling Natural Gas Leak Complaints, Risk-Based Leak Survey Program, Distribution Facilities Replacements, Reports, Plastic Pipe Requirements, School Piping Testing, Natural Gas Pipelines Public Education and Liaison, and Discontinuance of Service, including one change in the title of Subchapter C; in Subchapter D to §8.301 and §8.315 relating to Required Records and Reporting, and Hazardous Liquids and Carbon Dioxide Pipelines or Pipeline Facilities Located Within 1,000 Feet of a Public School Building or Facility. The Commission also proposes new §8.110, relating to Gathering Pipelines, in Subchapter B.

The proposed amendments include non-substantive clarifications and corrections in the following sections. Proposed amendments in §8.1(d), §8.210, §8.235, §8.301, and §8.315 would require an operator to retain copies of United States Department of Transportation (DOT) or certain other filings and provide copies to the Commission only upon request. In §8.5, proposed amendments to the definitions of "applicant," "director," and "division" correct the name of the Commission's division; proposed amendments in §8.201 and §8.209 also correct the division name. Proposed amendments in §8.125(g) and (h) clarify references to the Hearings Division and orders. A proposed amendment in §8.230 corrects a statutory reference. Proposed amendments in §8.301 clarify accident reporting and other existing wording.

The Commission proposes the amendment in §8.1(b) to update the minimum safety standards and to adopt by reference the DOT pipeline safety standards found in 49 CFR Part 192, Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards. Current subsection (b) adopted the federal pipeline safety standards as of October 31, 2017. The proposed amendment amends the date to January 22, 2019, to capture the federal safety rule amendment summarized in the following paragraph.

Docket No. PHMSA-2014-0098: Amdt. No. 192-124, amended the Federal Pipeline Safety Regulations that govern the use of plastic piping systems in the transportation of natural and other gas. These amendments are necessary to enhance pipeline safety, adopt innovative technologies and best practices, and respond to petitions from stakeholders. The changes include increasing the design factor of polyethylene pipe; increasing the maximum pressure and diameter for Polyamide-11 pipe and components; allowing the use of Polyamide-12 pipe and components; new standards for risers, more stringent standards for plastic fittings and joints; stronger mechanical fitting requirements; the incorporation by reference of certain new or updated consensus standards for pipe, fittings, and other components; the qualification of procedures and personnel for joining plastic pipe; the installation of plastic pipe; and a number of general provisions. The effective date of these amendments is January 22, 2019.

As described in the following paragraphs, other proposed amendments align Commission rules with federal regulations adopted by the Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA provides funding for state pipeline safety programs as long as those programs comply with PHMSA's minimum standards. Some of the amendments to Chapter 8 are proposed to ensure Texas complies with those minimum standards and retains PHMSA funding.

Some proposed amendments change the term "natural gas" to "gas" to clarify that propane gas distribution systems must also comply with requirements for distribution systems. These proposed amendments in §8.5 include the definitions for "master metered system," "natural gas or other gas supplier," "person responsible for a school facility," and "school facility". Amendments are also proposed in §8.5 to align the definition of "private school" with the definition provided in the Texas Education Code. Proposed amendments in §8.205 also change the term "natural gas" to "gas", and the title of Subchapter C includes a corresponding change.

The proposed amendments in §8.101(b)(1)(C)(iii) would delete the director approval requirement for direct assessment and make other non-substantive corrections. Director approval for direct assessment is no longer needed because there is now a National Association of Corrosion Engineers (NACE) standard for direct assessment which was not available when §8.101 was originally adopted. A related change removes a request to use the direct assessment method from the definition of "applicant" in §8.1(2). A proposed change to §8.101(e) removes outdated language.

Proposed new rule §8.110 would implement certain Commission jurisdiction over gathering pipelines in Class 1 locations and rural areas, which was granted by the legislature in House Bill 2982 during the 83rd Legislative Session. Specifically, House Bill 2982 granted the Commission authority to establish safety standards and practices for gas gathering pipelines and facilities in Class 1 locations and hazardous liquids and carbon dioxide gathering pipelines and facilities in rural areas. House Bill 2982 mandated that, for the first two years the statutes were in effect, the Commission could only implement the changes to provide a process for the Commission to investigate an accident, an incident, a threat to public safety, or a complaint, and to require an operator to submit a plan to remediate the same.

As a result, since September 1, 2013, the Commission has been investigating incidents and accidents on Class 1 gathering lines and rural gathering lines and responding to complaints and other threats to the public. However, the Commission did not have regulations requiring reporting during this time. As a direct result of its investigation and response efforts, the Commission has recognized the need to compile more accurate and complete information regarding the incidents and accidents that are occurring on gathering systems located in Class 1 locations and rural areas.

The rules adopted by the Commission pursuant to House Bill 2982 must be based on the risks the transportation and facilities present to the public safety. Proposed §8.110(a) defines the scope of the proposed rule. Proposed §8.110(b) requires an operator of a gathering line in a Class 1 location or rural area as defined in proposed subsection (a) to operate its pipeline in a reasonably prudent manner to promote safe operation of the pipeline. Proposed §8.110(c) requires operators subject to the proposed rule to report incidents and accidents to the Commission pursuant to the Commission's reporting requirements. Proposed subsection (d) requires operators to conduct an investigation after an incident or accident and cooperate with the Commission during the Commission's investigation. Proposed subsection (e) allows the Commission to require the operator to submit a corrective action plan to remediate an accident, incident, threat to the public, or complaint. The proposed reporting, investigation, and corrective action requirements will allow the Commission to gather accurate data and analyze any trends in incident or accident occurrences. This will allow the Commission to more thoroughly assess the risks gathering lines in Class 1 locations and rural areas present to the public safety.

Proposed amendments in §8.115 would amend the time period during which each operator must notify the Commission regarding the construction of pipelines and other facilities. For construction of 10 or more miles of a new, relocated, or replacement pipeline, the operator shall notify the Commission not later than 60 days before construction, which aligns with current PHMSA requirements. The 60-day requirement applies to all pipeline operators, including gas distribution companies, master meter systems, and liquified petroleum gas distribution companies. For construction of one or more but less than 10 miles of a new, relocated, or replacement pipeline (excluding gas distribution companies, master meter systems, and liquified petroleum gas distribution companies), an operator shall notify the Commission not later than 30 days before construction.

The Commission proposes different requirements for new construction, relocations, or replacements less than 10 miles in length on natural gas distribution systems, liquified petroleum gas distribution systems, and master meter systems. For relocated or replacement construction on liquified petroleum gas distribution systems, natural gas distribution systems, or master meter systems less than three miles in length, no construction notification is required. For relocated or replacement construction on natural gas distribution systems, liquified petroleum gas distribution systems, or master meter systems three or more miles in length but less than 10 miles in length, in lieu of notifying the Commission 30 days prior to construction, an operator may provide to the Commission a monthly report that reflects all known projects planned to be completed in the following 12 months, all projects that are currently in construction, and all projects completed since the prior monthly report. The report should provide the status of the project, the city and county of location, a description of the project, and the estimated commencement date and end date. The proposed amendments also provide the option for providing a monthly report for the initial construction of a new liquefied petroleum gas distribution system, natural gas distribution system, or master meter system less than 10 miles in length. The option to file a monthly report will reduce the large number of reports that would be required for large distribution operators who replace and relocate lines often, while still giving small distribution operators the flexibility to simply file a construction report. Proposed §8.115 also requires notification of the installation of any breakout tank.

Proposed amendments to §8.115 still contain the requirement that the construction report be filed with the Commission on a Form PS-48. The proposed amendments also clarify that if notification is not feasible because of an emergency, an operator must notify the Commission as soon as practicable. Furthermore, the proposed amendments specify that construction reports will be valid for a period of eight months from the time they are filed with the Commission. If construction is not commenced during that eight-month period, the construction report expires and the operator must file a new report. In the alternative, operators may request one six-month extension on the original construction report. Operators may submit their request for extension to safety@rrc.texas.gov before the original construction report expires. The expiration date and limited renewal is proposed to ensure that the Commission has accurate records. The Commission has authority to conduct new construction inspections, and for planning purposes and efficient use of state resources it is important for the Pipeline Safety Department to have accurate records regarding when construction is set to commence.

Proposed amendments in §8.125(a) and (g)(2) clarify that an operator must request a waiver and before the operator engages in the activities covered by the proposed waiver.

Proposed amendments in §8.135 include clarifications to the tables for penalty guidelines and penalty worksheet in order to include subparts from 49 CFR Parts 192 and 195 that are not currently addressed, as well as include penalties for violations of proposed §8.110. The proposed amendments also revise the statutory reference for the Commission's penalty jurisdiction over pipeline safety violations since House Bill 866 (86th Legislature) expands the authority under which the Commission may assess an administrative penalty for pipeline safety violations.

Proposed amendments in §8.206 remove dates that have passed and, therefore, are no longer applicable. The proposed amendments in §8.206(c) and (f) also add an additional three months in which to comply with each deadline prescribed by the rule, which is consistent with federal requirements.

Proposed amendments in §8.209 remove dates that have passed and, therefore, are no longer applicable. For example, the Commission proposes to delete subsection (f)(1) because there are no longer priority 1 lines that meet the criteria in that provision or that could be replaced by that date. The proposed amendments in §8.209(h) also implement House Bill 866 from the 86th Legislative Session, which would require operators to annually remove or replace at least eight percent of underground distribution gas pipeline facilities posing the greatest risk in the system and identified for replacement under the program. Eight percent is an increase from the current requirement of five percent. The proposed amendments in new subsection (k) also implement House Bill 866 and prohibit a distribution gas pipeline facility operator from installing cast iron, wrought iron, or bare steel pipelines in its underground system. Any known existing cast iron pipelines are required to be replaced by December 31, 2021.

Proposed amendments in §8.210 implement House Bill 864 from the 86th Legislative Session. These amendments require the telephonic report to be due at the earliest practical moment, but at the latest one hour following confirmed discovery of a pipeline leak or incident. One hour is also the current PHMSA reporting requirement. Other amendments proposed to implement House Bill 864 include a requirement to submit an additional report to the Commission when more information is known by distribution operators and a requirement in proposed subsection (e) that the Commission retain pipeline incident records perpetually. The proposed amendments also eliminate the requirement for operators to submit written DOT incident forms and annual reports to the Commission and instead require operators to retain them and provide them to the Commission upon request.

A proposed amendment in §8.210(e) deletes references to a regulated plastic gas gathering line and a plastic gas transmission line from the requirement for reporting repaired leaks to the Division.

The proposed amendments in §8.225 delete most of the current wording now covered by Distribution Integrity Management Program (DIMP) requirements and adds that operators shall retain all records relating to plastic pipe installation in accordance with 49 CFR Part 192 and provide such records to the Commission upon request.

Proposed new wording in §8.240 would add requirements for "soft close" programs to be utilized by distribution operators for certain customer accounts in certain short-term situations. Allowing soft-close procedures would allow distribution operators and customers an easy transition from one customer to another.

Proposed amendments in §8.301 clarify that the telephonic report for accidents involving crude oil is due at the earliest practical moment, but at the latest one hour following confirmed discovery of a pipeline accident. One hour is also the current PHMSA reporting requirement. The proposed amendments also eliminate the requirement for operators to submit written Department of Transportation incident forms and annual reports to the Commission and instead requires operators to retain them and provide them to the Commission upon request.

Kari French, Director, Oversight and Safety Division, has determined that for the first five years the new rule and amendments will be in effect, there will be no fiscal implications for the state government as a result of enforcing or administering the proposed new rule and amendments. The Commission can cover any costs using its existing resources and budget. There will be a fiscal impact on local governments as municipalities will be required to comply with the requirements imposed by House Bill 866. However, municipalities' pipeline systems average 55 miles in length. Thus, removing or replacing an average of 4 miles of pipeline per year (eight percent of the system average) would comply with the requirements imposed by House Bill 866.

There is anticipated cost for persons required to comply with the proposed amendments. The proposed amendments to §8.115(d) would require construction filings for breakout tanks that are currently exempt from the filing requirement. However, this cost may be offset by proposed amendments to §§8.225, 8.235, and 8.315 that eliminate periodic filings for plastic pipe inventory and school proximity reports. The amendments proposed to implement House Bill 866 require annual removal or replacement of at least eight percent of underground distribution gas pipeline facilities posing the greatest risk in the system and identified for replacement under the program. It is estimated that operators are already replacing seven percent, so the anticipated cost for compliance with the proposed amendments stems from the one percent increase. However, any such costs are likely to be less than the cost of a catastrophic pipeline failure that might otherwise occur.

Further, while there is an anticipated cost for persons required to comply with new §8.110, relating to Gathering Pipelines, the cost will be minimal. Operators will now be required to report incidents and accidents to the Commission and cooperate with the Commission's investigation of the incident or accident. The operator must also conduct its own investigation. Cost incurrence will vary for each operator.

Ms. French has determined that for each year of the first five years that the new rule and amendments will be in effect, the primary public benefit will be consistency with federal requirements and state statutes, removal of redundant requirements, and updated Commission department names, lessening the potential for confusion. Further, the changes prompted by House Bill 866 would require operators to replace more of their aging infrastructure, helping prevent incidents that may harm the public. Similarly, implementing reporting requirements for Class 1 and rural gathering lines would help the Commission compile accurate information regarding incidents and accidents so that the Commission can adopt safety regulations pursuant to House Bill 2982 to prevent risks to the public safety.