[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79362-79364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22118]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

[Docket No. PHMSA-2024-0151]


Pipeline Safety: Proposed Project-Specific Waiver of the Build 
America, Buy America Act Requirements for City Utilities of 
Springfield, Missouri for Certain Products

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
Department of Transportation (DOT).

ACTION: Notice; request for comments.

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SUMMARY: The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) proposes to waive the Build America, Buy America (BABA) Act's 
domestic preference requirements for certain products that City 
Utilities of Springfield (City Utilities) will use in its Natural Gas 
Distribution Infrastructure Safety and Modernization (NGDISM) grant 
project. The proposed waiver would exempt the following products used 
in City Utilities' project from BABA requirements on the basis of 
nonavailability: locator markers; meter stops with insulated unions; 
magnesium anodes; 1A meter swivels, nuts, and washers; and direct bury 
lugs. In accordance with section 70914(c) of BABA, PHMSA is seeking 
public comments on the proposed waiver.

DATES: Comments must be received by October 15, 2024.

ADDRESSES: Please submit your comments to the Federal eRulemaking 
Portal at http://www.regulations.gov, Docket No. PHMSA-2024-0151, and 
follow the online instructions for submitting comments.
    Instructions: You must include the agency name and docket number at 
the beginning of your comments. Except as described below under the 
heading ``Confidential Business Information,'' all submissions 
received, including any personal information provided, will be posted 
without change or alteration to http://www.regulations.gov. For more 
information, you may review the U.S. Department of Transportation's 
complete Privacy Act Statement published in the Federal Register on 
April 11, 2000, (65 FR 19477).

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Brandon Hollingshead, PHMSA Office of the Chief 
Counsel, 202-366-4400, or via email at <a href="/cdn-cgi/l/email-protection#f89a8a99969c9796d69097949491969f8b909d999cb89c978cd69f978e"><span class="__cf_email__" data-cfemail="e38191828d878c8dcd8b8c8f8f8a8d84908b868287a3878c97cd848c95">[email protected]</span></a>. 
Office hours for PHMSA are from 8:30 a.m. to 5 p.m., E.T., Monday 
through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    A copy of this Notice, all comments received on this Notice, and 
all background material may be viewed online at http://www.regulations.gov using the docket number listed above. Electronic 
retrieval help and guidelines are also available at http://www.regulations.gov. An electronic copy of this document also may be 
downloaded from the Office of the Federal Register's website at: 
www.FederalRegister.gov and the Government Publishing Office's website 
at: www.GovInfo.gov.

Confidential Business Information

    Confidential Business Information (CBI) is commercial or financial 
information that is both customarily and actually treated as private by 
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), 
CBI is exempt from public disclosure. If your comments responsive to 
this notice contain commercial or financial information that is 
customarily treated as private, that you actually treat as private, and 
that is relevant or responsive to this notice, it is important that you 
clearly designate the submitted comments as CBI. You may ask PHMSA to 
give confidential treatment to information you give to the agency by 
taking the following steps: (1) mark each page of the original document 
submission containing CBI as

[[Page 79363]]

``Confidential''; (2) send PHMSA, along with the original document, a 
second copy of the original document with the CBI deleted; and (3) 
explain why the information you are submitting is CBI. Unless you are 
notified otherwise, PHMSA will treat such marked submissions as 
confidential under the FOIA, and they will not be placed in the public 
docket of this Notice. Submissions containing CBI should be sent to: 
Mr. Brandon Hollingshead, PHMSA, 1200 New Jersey Avenue SE, E26-316, 
Washington, DC 20590. Any comment submissions that PHMSA receives that 
are not specifically designated as CBI will be placed in the public 
docket for this matter.

Background and Justification for Waiver

    The NGDISM program was authorized by the Infrastructure Investment 
and Jobs Act (IIJA) (Pub. L. 117-58). The program provides Federal 
funding to municipal- or community-owned natural gas utilities (not 
including for-profit entities) to repair, rehabilitate, or replace 
their natural gas distribution pipeline systems or portions thereof, or 
to acquire equipment to (1) reduce incidents and fatalities and (2) 
avoid economic losses. The IIJA appropriates $200 million per year for 
each of Fiscal Years (FY) 2022 through 2026 for the NGDISM program ($1 
billion in total). The IIJA provides that 2 percent of this amount 
shall be used to pay the administrative expenses of the NGDISM program. 
Accordingly, the total amount expected to be awarded as grant funding 
over the five-year period is $980,000,000. In FY2022, PHMSA awarded 
approximately $196 million to 37 municipal- and community-owned natural 
gas utilities across the nation to fund pipeline replacement projects 
and the purchase of leak-detection equipment.
    Congress also enacted the Build America, Buy America Act (BABA), 
providing that ``none of the funds made available for a Federal 
financial assistance program for infrastructure . . . may be obligated 
for a project unless all of the iron, steel, manufactured products, and 
construction materials used in the project are produced in the United 
States.'' IIJA, Public Law 117-58, section 70914(a). Under IIJA section 
70914(b), PHMSA has authority to waive the requirements of BABA (1) if 
a domestic product is unavailable, (2) if using a domestic product 
would present an unreasonable cost, or (3) if application of BABA would 
not be in the public interest.
    In FY2022, City Utilities was awarded $10 million in NGDISM grant 
funding to help fund its ``Legacy Plastic Pipe Replacement Project,'' 
which it initiated in 2010. City Utilities operates approximately 500 
miles of ``Aldyl A'' plastic distribution pipeline within disadvantaged 
areas of Springfield, Missouri. Aldyl A is a type of plastic commonly 
used in gas pipelines in the 1960s and 1970s. Aldyl A has since been 
found to be susceptible to premature brittle-like failures when 
subjected to stress intensification, presenting a high risk of leakage 
and associated safety hazards. Additionally, the Aldyl A pipe operated 
by City Utilities lacks continuous tracer wire, which is used to locate 
underground pipelines prior to excavation to avoid damaging the 
pipelines in the course of excavation. The $10 million awarded would 
allow City Utilities to speed up its Legacy Plastic Pipe Replacement 
Project by funding the replacement of approximately 13.7 miles of 
legacy Aldyl A pipe and approximately 1,409 legacy plastic gas services 
with modern, industry-standard polyethylene pipe. City Utilities will 
also use the grant funds to install a locator system on the new 
pipeline, allowing the pipe to be located during subsequent excavations 
near the pipeline, thereby ensuring the pipe is not damaged.
    On December 13, 2023, City Utilities issued an Invitation for Bids 
(IFB) seeking, among other products, locator markers; meter stops with 
insulated union; magnesium anodes; 1A meter swivels, nuts, and washers; 
and direct bury lugs. A more detailed description of each of these 
products is provided below:
    <bullet> Locator Markers: Locator markers are small devices placed 
on buried pipe and valves designed to help operators locate the 
infrastructure before excavation to help prevent damage to the pipe 
from excavation equipment. (NAICS: 325211)
    <bullet> Meter Stops with Insulated Union: Meter Stops are valves 
that are installed above a natural gas riser upstream of the meter to 
serve as a shut-off valve to control the flow of gas into the meter and 
subsequently into the building's gas system. They are crucial for 
maintenance, emergencies, or when the gas service needs to be shut off. 
Insulated Unions are fittings attached to the above ground portion of a 
natural gas utility riser in order to electrically insulate (i.e., 
isolate) a structure from the pipeline system to prevent corrosion. 
(NAICS: 332919)
    <bullet> Magnesium Anodes: Magnesium anodes are blocks of magnesium 
that are attached to steel pipe in order to protect against corrosion 
damage. (NAICS: 335999)
    <bullet> 1A Meter Swivels, Nuts, and Washers: Meter swivels, nuts, 
and washers are fasteners used to secure a gas meter assembly. (NAICS: 
33251/332722)
    <bullet> Direct Bury Lugs: Direct Bury Lugs are waterproof 
connectors used for splicing low-voltage wires, like those used in 
tracer wire, without cutting the main line wire. They simplify 
installation and increase the longevity of the connection with pre-
filled silicone sealant for waterproofing. (NAICS: 332999)
    The IFB remained open for more than a month, between December 13, 
2023, and January 15, 2024. In response to the IFB, City Utilities 
received seven responsive bids. However, each of the respondents to the 
IFB represented that they would not be able to certify compliance with 
BABA requirements for the above listed products.
    Additionally, prior to City Utilities requesting this waiver, PHMSA 
independently engaged the supplier scouting services of the National 
Institute of Standards and Technology Manufacturing Extension 
Partnership (NIST MEP) to search for domestic manufacturers of 1A meter 
swivels, nuts, and washers. At the conclusion of the process, NIST MEP 
identified several companies who stated they had the capability to 
manufacture these products. However, these companies declined to do so 
because it would be cost prohibitive for them to begin domestic 
manufacture of these products in the quantities that City Utilities 
needs to purchase for its NGDISM project. Accordingly, supplier 
scouting did not result in identification of any sources that could or 
would manufacture these products domestically.
    On these bases, PHMSA has determined that locator markers, meter 
stops with insulated unions, magnesium anodes, 1A meter swivels, nuts, 
and washers, and direct bury lugs are not manufactured in the United 
States in sufficient and reasonably available quantities or of a 
satisfactory quality.

Proposed Waiver and Request for Comments

    PHMSA proposes to waive the requirements of BABA for the above 
listed products for City Utilities' Legacy Plastic Pipe Replacement 
Project funded by NGDISM grant funds. The waiver would be applicable 
only to City Utilities' project; it would not be applicable to any 
other NGDISM grant recipient's projects. The proposed waiver would be 
effective from the effective date of the final waiver through

[[Page 79364]]

the period of performance and closeout of PHMSA financial assistance 
for the project, estimated to be February 21, 2028. If the sources of 
Federal financial assistance applied to the project are changed, PHMSA 
will consider whether the waiver continues to be warranted, taking into 
account the project's development status at that time and any changes 
in market conditions for the products subject to the waiver.
    Although City Utilities was awarded $10 million in NGDISM grant 
funding in FY2022, the majority of funding in NGDISM projects typically 
goes towards labor costs rather than materials costs. City Utilities 
estimates that for its FY2022 project the total cost of the products 
proposed to be waived equals approximately $72,000, divided across five 
types of products. NIST MEP identified several companies who have the 
capability to manufacture 1A meter swivels, nuts, and washers, yet 
declined to do so after engagement with City Utilities on the grounds 
that it would be cost prohibitive to manufacture these products at the 
relatively small scale needed by City Utilities.
    By contrast, the proposed waiver would have a large impact on City 
Utilities' ability to successfully complete its NGDISM project and 
deliver meaningful safety benefits to disadvantaged areas of 
Springfield, MO. All of the products listed herein are essential to the 
proper construction of a natural gas distribution pipeline. If this 
waiver is not approved, City Utilities' project will not be completed 
successfully. Additionally, City Utilities estimates that its total 
materials costs for the project will equal approximately $800,000. The 
cost of the products proposed to be waived therefore equates to 9 
percent of City Utilities' total materials costs, which is above the 
five percent threshold applicable to DOT's Waiver of Buy America 
Requirements for De Minimis Costs and Small Grants (88 FR 55817).
    Under OMB Memorandum M-24-02, agencies are expected to assess 
``whether a significant portion of any cost advantage of a foreign-
sourced product is the result of the use of dumped steel, iron, or 
manufactured products or the use of injuriously subsidized steel, iron, 
or manufactured products'' as appropriate before granting a public 
interest waiver. PHMSA's analysis has concluded that this assessment is 
not applicable to this waiver, as it is being proposed on the basis of 
nonavailability, rather than public interest or unreasonable cost.
    PHMSA will consider all comments received in the initial 15-day 
comment period during our consideration of the proposed waiver, as 
required by Section 70914(c)(2) of the IIJA. Comments received after 
this period, but before notice of our finding is published in the 
Federal Register, will be considered to the extent practicable.

    Issued in Washington, DC, on September 23, 2024, under authority 
delegated in 49 CFR 1.97.
Tristan H. Brown,
Deputy Administrator.
[FR Doc. 2024-22118 Filed 9-26-24; 8:45 am]
BILLING CODE 4910-60-P


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