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[Federal Register Volume 90, Number 12 (Tuesday, January 21, 2025)]
[Notices]
[Pages 7243-7244]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01365]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

[Docket No. PHMSA-2024-0152]

Pipeline Safety: Project-Specific Waiver of the Build America, 
Buy America Act Requirements for Certain Products Used by Philadelphia 
Gas Works Under the Natural Gas Distribution Infrastructure Safety and 
Modernization Grant Program

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

ACTION: Notice.

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SUMMARY: The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) is waiving the Build America, Buy America (BABA) Act's domestic 
preference requirements for certain products that Philadelphia Gas 
Works (PGW) needs for its Natural Gas Distribution Infrastructure 
Safety and Modernization (NGDISM) grant project due to lack of 
availability, unreasonable cost, or public good. The waiver would 
exempt the following products used in PGW's project from BABA 
requirements on the basis of nonavailability: electro-fusion tapping 
tees, anodeless risers, transition fittings, lockwing valves, magnesium 
anodes, service adapters, curb valves, caps, couplings, and stiffeners.

DATES: The effective date of the waiver is January 22, 2025.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Louis Cardenas, Office of Pipeline Safety, by phone 
at 832-208-0132 or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    A copy of this notice and all background material may be viewed 
online at https://www.regulations.gov using the docket number listed 
above. Electronic retrieval help and guidelines are also available at 
https://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 or the Government Publishing Office's website 
at www.GovInfo.gov.

Background

    The NGDISM grant 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 grant program ($1 billion in total). The IIJA provides 
that two percent of this amount shall be used to pay the administrative 
expenses of the NGDISM grant program. Accordingly, the total amount 
expected to be awarded as grant funding over the five-year period is 
$980,000,000.
    Congress also enacted the BABA Act, 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, sec. 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.
    Across three fiscal years (FY2022, FY2023, and FY2024) PGW has been 
awarded $125 million in NGDISM grant funding to help fund the 
replacement of ``at-risk'' natural gas cast iron pipe within the city 
of Philadelphia as part

[[Page 7244]]

of its ``Citywide Neighborhood Safety and Modernization'' project. Of 
the $125 million awarded for this project the materials covered by the 
waiver only represent an estimated 0.11% or $140,201. The project, 
which will be located entirely within Philadelphia's historically 
disadvantaged neighborhoods, will replace approximately 67 miles of 
aging cast iron, ductile iron, and unprotected steel pipelines with 
modern polyethylene plastic pipe that is less susceptible to breakage 
due to earth movement--the biggest threat to PGW's existing cast iron 
pipelines, especially during the winter months.

Proposed Waiver and Request for Comments

    On September 27, 2024, PHMSA published a Notice of Proposed 
Project-Specific Waiver of the BABA Act Requirements for Certain 
Products Used by Philadelphia Gas Works and Request for Comment (89 FR 
79360) for certain products on the basis of nonavailability. The 
specific essential products PGW sought a waiver for are listed below:
     Electro-fusion tapping tees: Electro-fusion tapping tees 
are rigid sections of polyethylene pipe that are fused to the top of an 
existing polyethylene pipeline. They are used to provide a branch 
outlet from a gas main to a service line. (NAICS: 326122)
     Anodeless risers: Anodeless risers are sections of pipe 
that provide a 90-degree connection between underground gas service 
lines and aboveground meter assemblies. Risers are typically made of 
steel but may also include polyethylene components and may include a 
protective sleeve over the polyethylene components. Anodeless risers 
are manufactured in a variety of sizes and may be rigid or flexible. 
(NAICS: 33296)
     Transition fittings: Transition fittings are adapters that 
facilitate below-grade transition from polyethylene pipe to steel pipe 
before it exits the ground. The steel section of the fitting is epoxy-
coated for corrosion resistance. Transition fittings incorporate both 
steel and polyethylene components. (NAICS: 332919)
     Lockwing valves: Lockwing valves are installed at the 
``head'' of a service line, upstream of a meter assembly, and are used 
to stop or start the flow of gas. They are lockable to resist tampering 
or accidental opening of the valve. They are typically made of brass. 
(NAICS: 332919)
     Magnesium anodes: Magnesium anodes are blocks of magnesium 
that are attached to steel pipe in order to protect against corrosion 
damage. (NAICS: 335999)
     Service adapters: Service adapters are threaded fittings 
used on a meter set assembly above ground. They are typically made of 
steel and are used to connect two pieces of steel pipe in a meter 
assembly. (NAICS: 332919)
     Curb valves: Curb valves are shut-off valves installed in 
a readily accessible outside location (such as in the footway). They 
are used to control the gas upstream of a gas meter, but downstream of 
the main service tee in the street. Curb valves can be made of either 
polyethylene or steel. PGW requires the use of polyethylene curb valves 
in its system. Accordingly, PHMSA proposes to waive BABA requirements 
for polyethylene curb valves. (NAICS: 326122)
     Caps: Caps are added to a pipeline in order to close off 
sections of the pipeline or to cap off dead-end lines. Caps can be made 
of either polyethylene or steel, depending on the material of the pipe 
capped off. PGW is not able to find a BABA-compliant source for steel 
caps. Accordingly, PHMSA proposes to waive BABA requirements for steel 
caps. (NAICS: 332919)
     Couplings: Couplings can be used to connect two sections 
of pipe made from either polyethylene, steel, ductile iron, or cast 
iron. PGW requires the use of steel couplings on its distribution 
system. Accordingly, PHMSA proposes to waive BABA requirements for 
couplings made of steel. (NAICS: 332919)
     Stiffeners: Stiffeners are inserted into plastic pipe 
alongside couplings to support the pipe, mitigate stress, and provide a 
long-lasting seal. (NAICS: 326122)
    To conduct market research, PGW initially engaged with its normal 
suppliers of gas distribution pipeline parts. Eight of PGW's normal 
suppliers indicated that they could provide BABA-compliant products but 
were not willing to certify to BABA compliance. One of PGW's alternate 
suppliers indicated it could provide BABA-compliant caps, couplings, 
and stiffeners, albeit at an increased cost and a long lead time, 
causing an estimated 36-week delay in PGW's construction schedule that 
is untenable for this project. PGW also reached out to neighboring gas 
utilities to inquire about their sources but was likewise unable to 
locate a domestic source.
    On April 10, 2024, in an effort to locate additional alternative 
suppliers, PGW issued a Request for Quotation (``RFQ'') titled ``One 
Time Purchase of BABA Compliant Alternatives.'' The RFQ was publicly 
posted to PGW's Procureware website, and was open from April 10, 2024, 
until April 29, 2024. PGW invited 80 suppliers and manufacturers to 
submit bids. As a result of the RFQ, PGW identified BABA-compliant 
alternatives for eight products for which PGW was not previously able 
to find domestic sources. However, PGW still was not able to find 
suitable or readily available alternatives for the 10 products proposed 
to be waived herein.

Discussion of Public Comments

    PHMSA has reviewed the single supportive comment 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. The public 
comment regarding the PGW project specific NGDISM waiver was received 
by October 15, 2024. The commenter noted the potential need for the 
same products and that the commentor ``fully support[s] the granting of 
this waiver to Philadelphia Gas Works.''

Summary of Changes in the Proposed Waiver

    There are no changes to the proposed Waiver. As there was a single 
public comment in support of this waiver, there are no public comments 
that require changes in the proposed waiver.

Final Waiver

    Based on its review of the waiver request, and in consideration of 
the supportive comment received on the proposed waiver, PHMSA is 
waiving the requirements of BABA for the above listed products for 
PGW's ``Citywide Neighborhood Safety and Modernization'' project funded 
by NGDISM grant funds. The waiver is applicable only to PGW's project; 
it is not applicable to any other NGDISM grant recipient's projects. 
The waiver is effective from the date of the final waiver through the 
period of performance and closeout of PHMSA's financial assistance for 
the project, which is estimated to be June 30, 2029.
    Issued in Washington, DC, under authority delegated in 49 CFR 1.97.

Tristan H. Brown,
Deputy Administrator.
[FR Doc. 2025-01365 Filed 1-17-25; 8:45 am]
BILLING CODE 4910-60-P
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