Recommendation

State of Florida		Public Service Commission Capital Circle Office Center ● 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 -M-E-M-O-R-A-N-D-U-M-
DATE:	November 22, 2016
TO:	Office of Commission Clerk (Stauffer)
FROM:	Office of the General Counsel (Harper) Division of Economics (Rome) Division of Engineering (Matthews, Moses)
RE:	Docket No. 160121-GU – Proposed adoption of Rules 25-6.0346, 25-12.005, 25-12.008, 25-12.022, 25-12.027, 25-12.040, and 25-12.085, F.A.C.
AGENDA:	12/06/16 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Brisé
RULE STATUS:			Proposal May Be Deferred
SPECIAL INSTRUCTIONS:			None

Case Background

Rules 25-6.0346, Quarterly Reports of Work Orders and Safety Compliance, 25-12.005, Codes and Standards Adopted, 25-12.008, New, Reconstructed or Converted Facilities, 25-12.022, Requirements for Distribution System Valves, 25-12.027, Welder Qualification, 25-12.040, Leak Surveys, Procedures and Classification, and 25-12.085, Written Annual Reports Required, Florida Administrative Code (F.A.C.), implement federal and state gas and electric safety rules. The purpose of this rulemaking is to update, clarify, and streamline the Commission rules. The rules implement Sections 366.04(2)(f)(6), 368.05(1) and (2), 368.03, and 368.05, Florida Statutes, (F.S.).

The Commission’s Notice of Development of Rulemaking was published in the Florida Administrative Register (F.A.R.), on April 20, 2016, in Volume 42, Number 77. Comments were received from Tampa Electric Company (TECO), Florida Natural Gas Association, and Florida Electric Cooperatives Association. No rulemaking workshop was requested, and no workshop was held.

This recommendation addresses whether the Commission should approve staff’s proposed amendments of electric and gas safety Rules 25-6.0346, 25-12.005, 25-12.008, 25-12.022, 25-12.027, 25-12.040, and 25-12.085, F.A.C. The Commission has jurisdiction pursuant to Sections 120.54 and 366.06(1), F.S.

Discussion of Issues

Issue 1:

Should the Commission propose the amendment of Rules 25-6.0346, 25-12.005, 25-12.008, 25-12.022, 25-12.027, 25-12.040, and 25-12.085, F.A.C.?

Recommendation:

Yes. The Commission should propose the amendment of Rules 25-6.0346, 25-12.005, 25-12.008, 25-12.022, 25-12.027, 25-12.040, and 25-12.085, F.A.C., as set forth in Attachment A. (Harper, Matthews, Moses, Rome)

Staff Analysis:

The purpose of this rulemaking is to update, clarify, and streamline the Commission gas and electric safety rules. Staff is recommending that the Commission propose the amendment of the rules, as set forth in Attachment A. Below is a more detailed explanation of the rule amendments staff is recommending.

Electric Utilities

Rule 25-6.0346, F.A.C., Quarterly Reports of Work Orders and Safety Compliance

Rule 25-6.0436, F.A.C., specifies that required quarterly work order lists be sent directly to Commission staff via e-mail, without requiring a specific form that must be used, as long as there is sufficient information provided. Proposed language has been added to the rule to clarify the types of information required to be provided including utility name, contact name, quarter and year, work order number, location of construction, county of construction, estimated costs and a brief description of the work. The recommended revisions to the rule also include a hyperlink to an existing Commission form which can be used as an example format that would meet the reporting requirements of the rule.

Gas Utilities

Rule 25-12.005, Codes and Standards Adopted

Rule 25-12.005, F.A.C. implements the Minimum Federal Safety Standards and reporting requirements for pipeline facilities and transportation of gas as prescribed by Pipeline and Hazardous Materials Safety Administration (PHMSA) found in 49 C.F.R. Parts 191, 192, and 199. Rule 25-12.005, F.A.C., is amended to adopt the latest version of the federal standards 49 C.F.R. Parts 191, 192, and 199 that pertain to reporting requirements, safety standards, and drug and alcohol employee reporting standards and requirements for employees of gas pipeline operators and emergency response persons under the direct authority or control of a gas utility or gas pipeline operator.

Rule 25-12.008, New, Reconstructed or Converted Facilities

Rule 25-12.008, F.A.C., pertains to inspection of new, reconstructed, or converted pipeline facilities. Rule 25-12.008, F.A.C., is amended to adopt the latest version of 49 C.F.R. Part 192 and to clarify that there is no requirement of visual inspection of underground facilities if construction and testing records have been maintained, and to clarify that active corrosion procedures are required by Subpart I of 49 C.F.R. Part 192.

Rule 25-12.022, Requirements for Distribution System Valves

Rule 25-12.022, F.A.C., provides the requirements for gas distribution system valves. Staff recommends amendments to Rule 25-12.022, F.A.C., to include the use of the word “emergency” in conjunction with the word “sectionalizing” in subsections (3) and (5) of the rule. The intent of the recommended amendments is to clarify those valves used to close off system sections in an emergency. Additional modifications to Rule 25-12.022, F.A.C. are recommended in paragraph (3)(b), which would provide clarification that valve identification must be marked on permanent material inside the valve box.

Rule 25-12.027, Welder Qualification

Rule 25-12.027, F.A.C., provides the standards for welder qualification. The amendments to Rule 25-12.027, F.A.C., would correct a scrivener’s error in the current rule and clarify the appropriate American Petroleum Institute standards for welder qualification. The rule also would be updated to adopt the latest version of the federal standard 49 C.F.R. Part 192 as it pertains to welder qualification.

Rule 25-12.040, Leak Surveys, Procedures and Classification

Rule 25-12.040, F.A.C., provides the requirements for gas leak surveys, procedures, and classification. The amendments to Rule 25-12.040(1)(b), F.A.C., would provide clarification regarding the intervals within which leak detection surveys are required. Staff recommends additional amendments to Rule 25-12.040, F.A.C., include new subsection (4). Under current Commission rules, gas utilities are required to perform follow-up inspections of leak repairs no later than one month for Grade 1 leaks and no later than six months for Grade 2 leaks. New language included in subsection (4) would require that if residual gas is detected on the follow-up inspection, continued monthly monitoring and inspections shall be done until gas is no longer detected.

Rule 25-12.085, Written Annual Reports Required

Rule 25-12.085, F.A.C., provides the requirement for annual written reports by gas distribution operators pursuant to PHMSA Forms 7100.1-1 and 7100.2-1. The recommended amendments to subsections (1) and (3) of Rule 25-12.085, F.A.C., would incorporate the most recent versions of the appropriate PHMSA forms. The most recent versions of the forms are included in Attachment A for reference. Subsection (2) of Rule 25-12.085, F.A.C., is recommended for deletion as redundant.

Statement of Estimated Regulatory Costs

Pursuant to Section 120.54, F.S., agencies are encouraged to prepare a statement of estimated regulatory costs (SERC) before the adoption, amendment, or repeal of any rule. The SERC is appended as Attachment B to this recommendation. The SERC analysis also includes whether the rule amendment is likely to have an adverse impact on growth, private sector job creation or employment, or private sector investment in excess of $1 million in the aggregate within five years after implementation.

The SERC concludes that the rule amendments will not likely directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate in Florida within one year after implementation. Further, the SERC concludes that the rule amendments will not likely have an adverse impact on economic growth, private-sector job creation or employment, private sector investment, business competitiveness, productivity, or innovation in excess of $1 million in the aggregate within five years of implementation. Thus, the rule amendments do not require legislative ratification pursuant to Section 120.541(3), F.S.

In addition, the SERC states that the rule amendments will not have an adverse impact on small business and will have no impact on small cities or small counties. No regulatory alternatives were submitted pursuant to paragraph 120.541(1)(a), F.S. None of the impact/cost criteria established in paragraph 120.541(2)(a), F.S., will be exceeded as a result of the recommended revisions.

Conclusion

Based on the foregoing, staff recommends the amendment of Rules 25-6.0346, 25-12.005, 25-12.008, 25-12.022, 25-12.027, 25-12.040, and 25-12.085, F.A.C.

Issue 2:

Should this docket be closed?

Recommendation:

Yes. If no requests for hearing or comments are filed, the rules may be filed with the Department of State, and this docket should be closed. (Harper, Matthews, Moses, Rome)

Staff Analysis:

If no requests for hearing or comments are filed, the rules may be filed with the Department of State, and this docket should be closed.

25-6.0346 Quarterly Reports of Work Orders and Safety Compliance.

(1) Each investor-owned electric utility, rural electric cooperative and municipal electric utility shall provide a work order list ~~report all completed electric work orders~~, relating to the construction and/or maintenance of transmission and distribution facilities~~, whether~~ that is completed by the utility or one of its contractors~~, at the end of each quarter of the year~~. The ~~report~~ work order list shall contain the utility name, contact name, quarter and year, work order number, location of construction, county of construction, estimated costs, and brief description of the work (overhead and underground), and shall be sent via e-mail to ~~electronically filed with the~~ Electric-QTR-Reports@psc.state.fl.us ~~Commission Clerk~~ no later than the 30th working day after the last day of the reporting quarter. ~~using~~ Form PSC/ENG 157 (12/12), “PSC Quarterly Report of Completed Work Orders,” which is available at http://www.flrules.org/Gateway/reference.asp?No=Ref-02040,. is an example work order list that may be completed and filed to meet the reporting requirement for this rule. This form is incorporated into this rule by reference and may also be obtained from the Commission’s Division of Administrative and Information Technology Services.

(2) In its quarterly report, each utility shall certify to the Commission that all work described in the completed work orders listed in the quarterly report meets or exceeds the applicable standards. Compliance inspections by the Commission shall be made on a random basis or as appropriate.

Rulemaking Authority 350.127(2), 366.05(1) FS. Law Implemented 366.04(2)(f), (6), 366.05(1) FS. History–New 12-16-12, Amended,____________.

25-12.005 Codes and Standards Adopted.

The Minimum Federal Safety Standards and reporting requirements for pipeline facilities and transportation of gas prescribed by the Pipeline and Hazardous Materials Safety Administration in 49 C.F.R. 191 and 192 (2016) ~~(2011)~~, are adopted and incorporated by reference as part of these rules. 49 C.F.R. 191 (2016) ~~(2011)~~ may be accessed at [Dept. of State hyperlink] ~~http://www.flrules.org/Gateway/reference.asp?No=Ref-01534~~. 49 C.F.R. 192 (2016) ~~(2011)~~ may be accessed at [Dept. of State hyperlink] ~~http://www.flrules.org/Gateway/reference.asp?No=Ref-01535~~. 49 C.F.R. 199 (2016) ~~(2011)~~, “Drug and Alcohol Testing,” is adopted and incorporated by reference to control drug use, by setting standards and requirements to apply to the testing and use of all emergency response personnel under the direct authority or control of a gas utility or pipeline operator, as well as all employees directly or indirectly employed by gas pipeline operators for the purpose of operation and maintenance and all employees directly or indirectly employed by intrastate gas distribution utilities for on-site construction of natural gas transporting pipeline facilities 49 C.F.R. 199 (2016) ~~(2011)~~ may be accessed at [Dept. of State hyperlink] ~~http://www.flrules.org/Gateway/reference.asp?No=Ref-01537~~. Part 199 also is adopted to prescribe standards for use of employees who do not meet the requirements of the regulations.

Rulemaking Authority 368.03, 368.05(2), 350.127(2) FS. Law Implemented 368.03, 368.05 FS. History–New 11-14-70, Amended 9-24-71, 9-21-74, 10-7-75, 11-30-82, 10-2-84, Formerly 25-12.05, Amended 8-8-89, 1-7-92, 5-13-99, 4-26-01, 12-15-09, 10-11-12,_________.

25-12.008 New, Reconstructed or Converted Facilities.

(1) No new or reconstructed system or portion thereof may be:

(a) Constructed, until written construction specifications complying with these rules are developed.

(b) Placed in service until the pipeline facilities have been inspected and found to comply with the construction specifications and Operating and Maintenance Plans.

(2) Before a piping system can be converted to a regulated gas, the operator must:

(a) Have a general conversion procedure as a part of its operation and maintenance plan.

(b) File a conversion plan with the Commission for the specific system at least 15 days prior to start of conversion. This plan need not be filed for minor conversions which are scheduled to be completed in one day and where sectionalizing of the system to be converted is not planned.

(c) Have ~~sufficient~~ inspections performed of the pipeline to assure that it was constructed in accordance with standards applicable at the time of installation. Visual inspection of the underground facilities ~~may~~ will not be required if ~~adequate~~ construction and testing records have been maintained.

(d) Review the operating and maintenance history of the system to be converted. Any areas showing abnormal maintenance requirements shall be replaced, reconditioned or otherwise made safe prior to conversion.

(e) Establish the maximum allowable operating pressure no greater than the highest sustained operating pressure during the 5 years prior to conversion unless it was tested or uprated after July 1, 1970 in accordance with the Subparts J or K of 49 C.F.R. 192 (2016) ~~(2011)~~ as adopted in Rule 25-12.005, F.A.C.

(f) Make a leak survey over the entire converted system concurrent with the conversion.

(g) Determine areas of active corrosion as required by Subpart I of 49 C.F.R. 192 (2016) ~~(2011)~~ and these rules. Required cathodic protection must be accomplished within 1 year after the date of conversion except that buried steel tubing must be protected prior to placing the system into operation.

Rulemaking Authority 350.127(2), 368.03, 368.05(2) FS. Law Implemented 368.03, 368.05(2) FS. History–New 11-14-70, Amended 9-21-74, 10-7-75, 10-2-84, Formerly 25-12.08, Amended 12-15-09, 10-11-12, ___________.

25-12.022 Requirements for Distribution System Valves.

(1) Valves ahead of regulator stations – A valve shall be installed upstream of each regulator station for use in an emergency to stop the flow of gas. These valves are to be installed at a safe distance from the station, but no more than 500 feet from the regulator station. The distance for the valve location can be greater than 500 feet if physically impractical to install closer.

(2) Sectionalizing valves – Valves shall be spaced within each distribution system to reduce the time to shut-down a segment of the system in an emergency. In determining the spacing of these valves, the following factors shall be evaluated:

(a) Volume and pressure of gas between valves.

(b) Size of area and population density between valves required to isolate the area and ~~as well as~~ the accessibility of the required valves.

(d) Other means and availability of required equipment to control the flow of gas in the event of an emergency.

(e) The number and type of customers, such as hospitals, schools, commercial, and industrial loads~~, etc.,~~ that will be affected.

(3) Identification – Emergency or sSectionalizing and other critical valves shall be designated on appropriate records, drawings or maps used by the operator and shall be referenced to “permanent” aboveground structures or other field ties so the valves can be readily located. The centerline of the road or highway, property line, or right-of-way may be used as one of the referenced structures. The valve installation and all records showing these valves must be marked for prompt identification using any logical designating system. The valve marking must be accomplished using a durable tag or other equivalent means located as follows:

(a) For aboveground valves or valves located in vaults which have to be operated from within the vault, the marking shall appear on the valve body or hand wheel.

(b) For buried valves or valves operated by a key wrench, the marking shall be legible and may be on any type of permanent material placed ~~appear~~ in a visible location ~~on the~~ inside of the curb box or standpipe where the cover will not abrade the marking. Marking the cover only is not acceptable.

(4) Blowdown valve requirements – Where blowdown valves are used to aid the evacuation of gas from segments of mains between isolation valves, these valves must:

(a) Be protected against tampering and mechanical damage from outside forces.

(b) Be designed for safe venting giving consideration to the direction of flow, electric facility locations, proximity of people, etc.

(5) All the sectionalizing or emergency valves which may be necessary for the safe operation of the system must be inspected and maintenance performed to assure location, access and operating ability at intervals not exceeding 15 months but at least each calendar year.

Rulemaking Authority 368.05(2) FS. Law Implemented 368.05(2) FS. History–New 9-21-74, Amended 10-7-75, 10-2-84, Formerly 25-12.22, Amended 12-15-09,_________.

25-12.040 Leak Surveys, Procedures and Classification.

(1) Each operator shall perform periodic leakage surveys in accordance with the following schedule ~~as a minimum~~:

(a) A gas detector instrument survey shall be conducted at intervals not exceeding 15 months but at least once each calendar year in those portions of an operator’s service area, including:

1. Principal business districts, master meter systems, and places where the public is known to congregate frequently.

2. Where pipeline facilities, including service lines, are located under surfaces of such construction that little opportunity is afforded for a leak to vent safely.

(b) A gas detector instrument survey to locate leaks throughout areas not included in subsection (a) above shall be conducted at intervals not exceeding ~~three (~~3) calendar years at intervals not exceeding 39 months on bare metallic, galvanized steel, coated tubing pipelines, and ~~five (~~5) calendar years at intervals not exceeding 63 months on the remaining pipeline system, or more frequently if experience indicates.

(2) The following leak classification system shall be used on all leak records and reports:

(a) “Grade 1 Leak” – a leak of gas that represents an existing or probable hazard to persons or buildings. In order ~~Prompt action~~ to protect life and property, these leaks shall be repaired immediately and continuous action shall be taken until conditions are no longer hazardous ~~is required~~.

(b) “Grade 2 Leak” – a leak that is not a threat to persons or property at the time of detection, but justifies scheduled repair based on potential future hazard. These leaks shall be repaired within 90 days from the date the leak was originally located, unless due to resurvey the leak was determined to be Grade 3 as defined in subsection (c) below. In determining the time period for repair, the following criteria should be taken into consideration:

1. Amount and migration of gas;

2. Proximity of gas to buildings and subsurface structures;

3. Extent of pavement;

4. Soil type and conditions, such as moisture and natural venting.

(c) “Grade 3 Leak” – a leak that is not a threat to persons and property and is not expected to become so. Above ground grade 3 leaks shall be repaired within 90 days from the date the leak was originally located unless the leak is upgraded or does not produce a positive leak indication when a soap and water solution, or its equivalent, is applied on suspected locations at operating pressure. Grade 3 leaks that are underground shall be reevaluated at least once every 6 months until repaired. The frequency of reevaluation shall be determined by the location and magnitude of the leak.

(3) ~~The adequacy of~~ Aall the repairs of leaks shall be checked by appropriate methods immediately after the repairs are completed. Where there is residual gas in the ground, a follow-up inspection using a gas detector instrument must be made as soon as the gas has had an opportunity to dissipate, but no later than one month for Grade 1 leaks and 6 months for Grade 2 leaks. The date and status of recheck shall be recorded on the leak repair records.

(4) If residual gas is detected on the follow-up inspection, continued monthly monitoring, not to exceed 45 days, and inspections shall be done until gas is no longer detected.

Rulemaking Authority 368.05(2) FS. Law Implemented 368.05(2) FS. History–New 9-21-74, Repromulgated 10-7-75, Amended 10-2-84, Formerly 25-12.40, Amended 1-7-92, 12-15-09, _________.

25-12.085 Written Annual Reports Required.

(1) Each operator of a distribution system shall submit an annual report on Pipeline and Hazardous Materials Safety Administration Form PHMSA F 7100.1-1 (2015) ~~(12-05)~~, entitled “Annual Report for Calendar Year 20____ Gas Distribution System,” which is incorporated by reference into this rule and is available at [Department of State hyperlink] for each distribution system. In the case of an operator who has more than one distribution system, a combined annual report must be submitted which includes all facilities operated within the State of Florida subject to the Commission’s jurisdiction.

(2) Each operator of a distribution system shall, for facilities that operate at 20 percent or more of the specified minimum yield strength, or that are used to convey gas into or out of storage, submit an annual reports for those facilities on Pipeline and Hazardous Materials Safety Administration Form PHMSA F 7100.2-1 (12-05), entitled “Annual Report for Calendar Year 20____ Gas Transmission & Gathering Systems.”

(2)~~(3)~~ Each operator of a transmission system shall submit an annual report on Pipeline and Hazardous Materials Safety Administration Form PHMSA F 7100.2-1 (2014) ~~(12-05)~~, entitled “Annual Report for Calendar Year 20__ Natural and Other Gas Transmission and Gathering Pipeline Systems,” which is incorporated by reference into this rule and is available at [Department of State hyperlink].

All the above reports must be submitted for the preceding calendar year so as to be received by the Commission no later than March 15th of each year.

Rulemaking Authority 350.127(2), 368.05(2) FS. Law Implemented 368.03, 368.05(2) FS. History–New 11-14-70, Amended 9-21-74, Repromulgated 10-7-75, Amended 10-2-84, Formerly 25-12.85, Amended 12-15-09, _________.