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Public Service Commission


08/14/2012 Contact: 850-413-6482

PSC Approves Pipeline Improvement Rider

TALLAHASSEE — Acknowledging increased concern about pipeline safety due to aging infrastructure susceptible to corrosion, the Florida Public Service Commission (PSC) today approved two petitions allowing three Florida natural gas companies to recover their costs for hastening pipeline replacement within 10 years.

“The PSC is committed to working with Florida’s natural gas utilities to maintain a safe and reliable pipeline infrastructure that meets consumers’ daily needs,” said PSC Chairman Ronald A. Brisé.  “An added by-product from the utilities’ energy infrastructure improvements is an immediate economic development boost in their service territories.” 

Peoples Gas System’s (Peoples) Cast Iron/Bare Steel Replacement Rider, approved today, will accelerate the replacement of cast iron and bare steel distribution pipes on its system.  Cast iron is subject to corrosion which in turn may lead to cracking if exposed to mechanical pressures such as excavation or heavy road traffic.  Pitting can occur in unprotected bare steel distribution pipes, reducing the pipeline’s structural integrity.  The initial bill impact for a typical Peoples’ residential customer is $0.05 per month starting in January 2013.

A joint petition filed by the Florida Public Utilities Company (FPUC) and the Florida Division of Chesapeake Utilities Corporation (Chesapeake) received Commission approval for Gas Reliability Infrastructure Programs (GRIPs).  GRIPs, a proposed industry program, permits a gas utility to recover the cost of accelerating the replacement of bare steel pipeline with polyethylene (plastic) pipeline.  FPUC’s initial bill impact starting in January 2013 is $0.12 per month for a typical residential customer; Chesapeake’s initial bill impact starting in January 2013 is $0.37 per month for a typical residential customer.

An annual mechanism to track savings in operations and maintenance expense and depreciation is required for both pipeline improvement programs.  The U.S. Department of Transportation has urged natural gas utilities to replace these older facilities as a safety measure. 

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