**E. Frank Bender**

**Vice President, Gas Distribution and New Business Division**

**Baltimore Gas and Electric Company**

** **

**On Behalf of the American Gas Association**

**and**

**The American Public Gas Association**

** **

######## Before the U.S. Senate Commerce, Science 

######## and Transportation Committee

** **

######## Hearing on S. 3961 

######## Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006

######## 

######## November 16, 2006

 

Good morning, I am pleased to appear before you today and would like to
thank the Committee for convening this hearing on the important topic of
pipeline safety. My name is Frank Bender, I am Vice President of Gas
Distribution and New Business Division of Baltimore Gas and Electric
Company, a subsidiary of Constellation Energy. BG&E delivers natural gas
to 634,000 customers in Maryland.

I am testifying today on behalf of the American Gas Association (AGA)
and the American Public Gas Association (APGA). Together AGA and APGA
represent more than more than 850 local natural gas utilities serving
more than 56 million customers nationwide.

I would like to begin my testimony by first commending the committee,
particularly Chairman Stevens and Ranking Member Inouye and their
staffs, as well as Senators Lott and Lautenburg, for putting together
what we believe is a good legislative proposal. We hope that the
committee will act quickly to get a bill passed this year.

In our opinion the Pipeline Safety Act of 2002 has been working well and
only minor adjustments should be considered at this point with one
exception. Our companies have identified one major area we believe
requires considerable improvement: [excavation damage
prevention]{.underline}. Congressional attention to more effective state
excavation damage programs can and will, result in real, measurable
decreases in the number of incidents occurring on natural gas
distribution pipelines each year. [Excavation damage is the single
largest cause of natural gas distribution pipeline incidents -- and we
are very pleased that S. 3961 addresses this very important
issue.]{.underline}

There are two kinds of incidents involving natural gas distribution
systems: Those caused by factors the pipeline operator can to some
extent control (such as improper welds, material defects, incorrect
operation, corrosion or excavation damage by a utility's contractor) and
those caused by external forces, which are due to factors the pipeline
has little or limited ability to control, such as excavation damage by a
third party, earth movement, floods, vandalism, lightning and structure
fires).

The term "excavation" as I use it here and as defined by the Department
of Transportation in its regulations includes demolition, excavation,
tunneling or construction activities. Excavation is wide spread -- from
directional boring for new cable lines to installation of fences.

I am pleased to report here today that natural gas utilities do a good
job in minimizing incidents that they can control.

The record shows that between 2002 and 2005, 82 percent of all reported
incidents were the result of excavation damage by a third party or other
factors the utility company had little or no control over. In many
cases, the typical "little or no control" incident involves a party that
is outside the jurisdiction of authorities overseeing pipeline safety.

However\-- and most unfortunately\-- during the same four-year period,
incidents due to 3^rd^ party excavation [more than doubled]{.underline}.
Excavation damage thus represents the single greatest threat to
distribution system safety, reliability and integrity.

The Common Ground Alliance (CGA) is a member-driven organization
dedicated to ensuring public safety by reducing damage to underground
facilities. Along with pipeline operators, the CGA membership includes
excavators, locators, road builders, electric utilities,
telecommunications, regulators and other stakeholders. Efforts by the
Common Ground Alliance damage prevention organization, such as the
nationwide education program to educate the citizenry about the
three-digit One Call "811"number to prevent excavation damage, are steps
in the right direction. But clearly more is needed.

AGA and APGA are pleased that the provisions of S. 3961 outlines nine
elements of an effective state damage prevention program in the
legislation and provide for additional funding for state implementation
of the program.

Other issues of importance that I would like to highlight briefly for
the committee are:

[Gas Transmission Integrity Management]{.underline}

The Department of Transportation and pipeline operators have put forth a
tremendous amount of effort to implement the gas transmission pipeline
integrity management requirements of the Pipeline Safety Act of 2002.
The Government Accountability Office (GAO) recently issued a report on
the subject of transmission integrity management reassessment intervals.
The report states that the gas integrity management program appears to
be working.

The GAO also suggested allowing operators to reassess their systems at
intervals based on technical data, risk factors and engineering
analyses. AGA and APGA agree with using technically based assessment
intervals.

[Safety Orders]{.underline}

AGA and APGA believe that the language in S. 3961 that allows a safety
order to be issued for "[any condition]{.underline} that poses a risk to
public safety, property, or the environment" is overly broad. DOT
already is using its authority to issue corrective action orders to
enforce safety rules on facilities that are determined to present a
hazard to life, property and the environment.

[Human Risk Factors Risk Management]{.underline}

AGA and APGA support the proposed directive that DOT prescribe standards
to reduce risks associated with fatigue, but we are concerned about the
possible development of complex regulations on "mandatory" working
hours.

DOT recently held a public meeting on the topic, and the excellent
information exchanged served to reinforce our belief that controller
functions in the natural gas transmission, hazardous liquid, and
distribution industries are too diverse to be addressed by a 'one size
fits all' regulation~~.~~

[Funding for One Call Grants and the Common Ground Alliance]{.underline}

AGA and APGA urge Congress to provide continued funding authority over
the upcoming reauthorization period for grants to states to support One
Call programs and to the Common Ground Alliance.

[Enforcement Transparency]{.underline}

We support the idea of enhancing enforcement transparency, so long as
due process is preserved and confidentiality during the administrative
process of individual cases is protected. The Department of
Transportation has a system where notices of probable violations are
issued and operators are given an opportunity to promptly respond. If
transparency during enforcement activities improves public confidence,
we support enhancements with administrative due process.

[Summary]{.underline}

AGA and APGA believe that Congressional passage of pipeline safety
reauthorization this year will result in timely and significant
distribution system safety improvements. We commend the committee for
putting together a solid bill, and commit to working with you to secure
passage of a final bill this year.

Thank you for the opportunity to appear here today.