Document ID: PHMSA-2011-0009-0031
Agency: phmsa
Document Type: Proposed Rule
Title: Pipeline Safety: Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other than Single-Family Residences
Posted Date: 2015-07-15T04:00Z

[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Proposed Rules]
[Pages 41460-41472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17195]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 192

[Docket No. PHMSA-2011-0009]
RIN 2137-AE71

Pipeline Safety: Expanding the Use of Excess Flow Valves in Gas 
Distribution Systems to Applications Other Than Single-Family 
Residences

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: Excess Flow Valves (EFVs), which are safety devices installed 
on natural gas pipelines to reduce the risk of accidents, are currently 
required for new or replaced gas service lines servicing single-family 
residences (SFR). PHMSA is proposing to make changes to part 192 to 
expand this requirement to include new or replaced branched service 
lines servicing SFRs, multi-family residences, and small commercial 
entities consuming gas volumes not exceeding 1,000 Standard Cubic Feet 
per Hour (SCFH). PHMSA is also proposing to require the use of manual 
service line shut-off valve (e.g., curb valves) for new or replaced 
service lines with meter capacities exceeding 1,000 SCFH. Finally, 
PHMSA is proposing that operators notify customers of their right to 
request installation of an EFV on service lines that are not being 
newly installed or replaced. PHMSA is proposing to delegate the 
question of who bears the cost of installing EFVs to service lines that 
are not being newly installed or replaced to the operator, customer, 
and the appropriate State regulatory agency.

DATES: Persons interested in submitting written comments on this Notice 
of Proposed Rulemaking (NPRM) must do so by September 14, 2015. PHMSA 
will consider late-filed comments so far as practicable.

ADDRESSES: You may submit comments identified by the docket number 
PHMSA-2011-0009 by any of the following methods:
    Comments should reference Docket No. PHMSA-2011-0009 and may be 
submitted in the following ways:
     Web site: http://www.regulations.gov. This site allows the 
public to enter comments on any Federal Register notice issued by any 
agency. Follow the online instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: U.S. Department of Transportation (DOT) Docket 
Operations Facility (M-30), West Building, 1200 New Jersey Avenue SE., 
Washington, DC 20590.
     Hand Delivery: DOT Docket Operations Facility, West 
Building, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, 
20590 between 9:00 a.m. and 5:00 p.m., Monday through Friday, except 
Federal holidays.
    Instructions: Identify the docket number, PHMSA-2011-0009, at the 
beginning of your comments. If you mail your comments, submit two 
copies. In order to confirm receipt of your comments, include a self-
addressed, stamped postcard.

    Note:  All comments are posted electronically in their original 
form, without changes or edits, including any personal information.

Privacy Act Statement

    Anyone can search the electronic comments associated with any 
docket by the name of the individual submitting the comment (or signing 
the comment, if submitted on behalf of an association, business, labor 
union, etc.). DOT's complete Privacy Act Statement was published in the 
Federal Register on April 11, 2000, (65 FR 19477).

FOR FURTHER INFORMATION CONTACT: Mike Israni, by telephone at 202-366-
4571, by fax at 202-366-4566, or by mail at DOT, PHMSA, 1200 New Jersey 
Avenue SE., PHP-1, Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

I. Background

    An EFV is a mechanical safety device installed inside the natural 
gas service line between the street and residential meter. The EFV will 
``trip or close'' if there is sufficient damage to the line to minimize 
the flow of gas through the line and thus, the amount of gas that 
escapes into the atmosphere. During normal use, the valve is kept 
pushed open against oncoming gas flow by a spring. EFVs are designed so 
that general usage, such as turning on appliances, will not shut the 
valve. However, during a significant increase in the flow of gas (e.g., 
due to a damaged line), the spring cannot overcome the force of gas, 
and the valve will close and stay closed until the correct pressure is 
restored. When the correct pressure is restored, the EFV automatically 
resets itself.
    On July 7, 1998, in South Riding, Virginia, a residential gas 
explosion resulted in one death and three injuries. It is not known if 
the explosion occurred on a branched or non-branched service line 
servicing an SFR; however, PHMSA believes that this proposed rule or 
its previous rule requiring EFVs on single lines serving SFRs would 
have mitigated the consequences of the explosion. An investigation by 
the National Transportation Safety Board (NTSB) found the explosion 
likely would not have occurred if an EFV had been installed for this 
single-family home. Similarly, PHMSA strongly believes this incident 
would have likely been would have been mitigated at a minimum. As a 
result, on June 22, 2001, the NTSB issued Safety Recommendation P-01-2, 
recommending that PHMSA require excess flow valves in all new and 
renewed gas service lines, regardless of a customer's classification, 
when the

[[Page 41461]]

operating conditions are compatible with readily available valves.
    In December of 2005, the ``Integrity Management for Gas 
Distribution: Report of Phase I Investigations,'' \1\ developed by a 
multi-stakeholder group, was published. In the report, the stakeholder 
group recommended that ``[A]s part of its distribution integrity 
management plan, an operator should consider the mitigative value of 
excess flow valves (EFVs). EFVs meeting performance criteria in Sec.  
192.381 and installed in accordance with Sec.  192.383 may reduce the 
need for other mitigation options.''
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    \1\ http://www.regulations.gov/#!documentDetail;D=PHMSA-RSPA-
2004-19854-0070.
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    In an effort to study the possible benefits of expanding EFVs 
beyond SFR applications, PHMSA began development of the Interim 
Evaluation in early 2009. In June and August of 2009, PHMSA held public 
meetings on NTSB Recommendation P-01-2.
    The meeting participants included the National Association of 
Regulatory Utility Commissioners, the National Association of Pipeline 
Safety Representatives, the International Association of Fire Chiefs, 
the National Association of State Fire Marshals, natural gas 
distribution operators, trade associations, manufacturers, and the 
Pipeline Safety Trust. As a result of these meetings, PHMSA issued a 
report titled: ``Interim Evaluation: NTSB Recommendation P-01-2 Excess 
Flow Valves in Applications Other Than Service Lines Serving One 
SFR'').\2\
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    \2\ The Interim Evaluation Report was issued in 2010 by PHMSA. 
The purpose of the interim report was to respond to the NTSB safety 
recommendation P-01-02 and evaluate the possibility of expansion of 
EFVs to applications other than service lines serving one single 
family residence (above 10 psig). The interim report also built a 
foundation for an economic analysis, considered the need for 
enhanced technical standards or guidelines, and suggested that any 
new technical standards include criteria for pressure drops across 
the EFV. The interim report can be found at: http://www.regulations.gov/#!documentDetail;D=PHMSA-2011-0009-0002.
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    On December 4, 2009, PHMSA amended the pipeline safety regulations 
to require the use of EFVs for new or replaced gas lines servicing 
SFRs.\3\ While this requirement met the mandate of the Pipeline 
Inspection, Protection, Enforcement and Safety Act (PIPES Act) enacted 
in 2006, distribution lines, including those that serve branched SFRs, 
apartment buildings, other multi-residential dwellings, commercial 
properties, and industrial service lines, are still not required to use 
EFVs. These structures are susceptible to the same risks as SFR service 
lines. PHMSA, already aware of this risk, was awaiting completion of 
the Interim Evaluation, which studied the possible expansion of EFVs 
beyond SFRs and the challenges of application. The Interim Evaluation 
also addressed other practical alternatives such as the use of manual 
isolation devices, such as curb valves. The evaluation identified 
challenges related to the feasibility and practicality of the proposed 
solutions, as well as significant cost factors and benefit factors. The 
evaluation found that there are no other devices or viable options to 
shut off gas supply quickly when gas services line ruptures.
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    \3\ ``Pipeline Safety: Integrity Management Programs for Gas 
Distribution Pipelines,'' 74 FR 63906 (December 4, 2009) RIN 2137-
AE15.
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    On November 25, 2011, PHMSA published an Advance Notice of Proposed 
Rulemaking (ANPRM) (76 FR 72666) asking the public to comment on the 
findings of the Interim Evaluation and issues relating to the expanded 
use of EFVs in gas distribution systems. PHMSA also sought comments 
from gas distribution operators on their experiences using EFVs, 
including:
     Technical challenges of installing EFVs on services other 
than SFRs;
     Categories of service to be considered for expanded EFV 
use;
     Cost factors;
     Data analysis in the Interim Evaluation;
     Technical standards for EFV devices; and
     Potential safety and societal benefits, small business and 
environmental impacts, and costs of modifying the existing regulatory 
requirements.

The ANPRM comments received by PHMSA will assist in the finalization of 
the Interim Evaluation and in determining what regulatory changes may 
be necessary to fulfill this mandate.

    In 2012, the President signed the Pipeline Safety, Regulatory 
Certainty, and Job Creation Act of 2011, which requires PHMSA to study 
the possibility of expanding the use of EFVs beyond SFRs and issue a 
final report on the evaluation of the NTSB's recommendation on excess 
flow valves within 2 years after enactment of the Act. PHMSA is also 
mandated to, if appropriate, issue regulations requiring the use of 
EFVs or equivalent technology, where ``economically, technically and 
operationally feasible'', for new or entirely replaced distribution 
branch services, multi-family lines, and small commercial service 
lines. PHMSA has determined for the purpose of this proposed rule, 
based on the study, that the safety benefits of expanding EFVs justify 
the cost and is appropriate. The only proposed exceptions are for large 
apartment buildings, industrial or commercial users for whom EFVs may 
not be practical due to inherent design complexity, continuous supply 
demands and/or contamination issues. Additionally, PHMSA is proposing 
that services exceeding 1,000 SFCH install curb valves on new or 
replaced gas service lines.
    The proposed required use of curb valves for large commercial 
(greater than 1,000 SFCH) goes beyond the Section 22 language of the 
Pipeline Safety, Job Creation, and Regulatory Certainty Act of 2011, 
however it is based on ANPRM comments received from industry, trade 
associations and other stakeholders. PHMSA and industry in general 
believe that EFVs are not suitable larger commercial facilities over 
1,000 SFCH. Curb valves are the best alternative to an EFV and provide 
an effective added level of safety for these facilities. These valves 
also are a feasible alternative based on the cost/benefit analyses.
    PHMSA's authority for regulating natural gas pipelines was first 
established by the Natural Gas Pipeline Safety Act of 1968, Public Law 
90-481, and has since been enlarged by additional legislation. The 
Pipeline Safety Laws specifically delegate authority to DOT to develop, 
prescribe, and enforce minimum Federal safety standards for the 
transportation of natural gas. PHMSA has used this statutory authority 
to promulgate comprehensive minimum safety standards. While the 2011 
Act specifically directed PHMSA to require the installation of EFVs on 
new and replaced branched lines serving SFRs, multi-family and small 
commercial facilities, DOT's underlying prior statutory authority under 
49 U.S.C. 60104 provides PHMSA with the authority to require the 
installation of curb valves for large commercial facilities.
    In the time since the 1998 incident in South Riding, Virginia, the 
NTSB has investigated an additional 8 incidents, which resulted in 10 
fatalities that could have possibly been averted if an EFV had been in 
place. The most recent incident occurred on November 23, 2012, when a 
gas pipeline exploded in Springfield, Massachusetts. The Springfield 
explosion injured 21 people and damaged more than 40 buildings. It is 
important also to note that this incident occurred on the day after 
Thanksgiving and the daycare adjacent to the explosion was closed. If 
the daycare would have been open, it is highly likely this incident 
would have resulted in even more losses. This incident is currently 
under investigation

[[Page 41462]]

by the NTSB. All eight of these incidents occurred on lines that would 
be affected by this rulemaking.

II. Analysis of ANPRM

    Nineteen organizations and individuals submitted comments in 
response to the ANPRM. The individual docket item numbers are listed 
for each comment.

Trade Associations

     Northeast Gas Association (NGA) (PHMSA-2011-0009-0012).
     Texas Pipeline Association (TPA) (PHMSA-2011-0009-0016).
     American Gas Association (AGA) (PHMSA-2011-0009-0023).
     American Public Gas Association (APGA) (PHMSA-2011-0009-
0024).

Gas Transmission and Distribution Pipeline Companies

     MidAmerican Energy Company (MAE) (PHMSA-2011-0009-0011).
     Avista Utilities (AU) (PHMSA-2011-0009-0013).
     Southwest Gas Corporation (SWC) (PHMSA-2011-0009-0015).
     National Grid (NG) (PHMSA-2011-0009-0022) (Supported AGA 
comments).
     Laclede Gas (LG) (PHMSA-2011-0009-0018) (Supported AGA 
comments).
     Kansas Gas Service (KGS) (PHMSA-2011-0009-0017).
     Nicor Gas (PHMSA-2011-0009-0014).

Government/Municipalities

     City of Ellensburg, Washington (PHMSA-2011-0009-0004).
     NTSB (PHMSA-2011-0009-0009).
     Iowa Utilities Board (IUB) (PHMSA-2011-0009-0020).

Pipeline Industry Suppliers

     R.W. Lyall (PHMSA-2011-0009-0021).
     Gas Breaker, Inc. (GBI) (PHMSA-2011-0009-0019).

Citizens

     Rebecca Lee Roter (PHMSA-2011-0009-0006).
     Courtney D. Brown (PHMSA-2011-0009-0010).
     Anonymous (PHMSA-2011-0009-0008) (The anonymous commenter 
expressed concerns regarding pipeline safety versus job creation, 
corruption, and politics. These topics are beyond the scope of this 
NPRM and are not discussed further.)
    PHMSA reviewed all of the comments received in response to the 
ANPRM. The comments received from the trade associations largely 
supported expanded EFV use with certain limitations. The operators that 
responded with comments raised some concerns with expanded EFV use 
generally related to logistics and implementation. Municipality 
comments reflected a concern that State laws already in place could 
conflict with any new Federal requirements. The NTSB expressed strong 
approval of the expanded EFV use. The comments submitted are discussed 
below in the same order as presented in the questions from the ANPRM.

A. Technical Challenges of Installing EFVs on Services Other Than SFRs

A.1. Does the Interim Evaluation address all challenges associated with 
expanded EFV use (changing gas usage patterns, snap loads, business-
critical gas supply applications, system configuration, pressure 
ratings, and size of commercially available EFVs)?
    The ANPRM solicited feedback and comments regarding whether the 
Interim Evaluation fairly and accurately explained the challenges of 
expanded EFV use. These challenges, identified in the Interim 
Evaluation from a variety of stakeholders, may limit or exclude future 
EFV expansion beyond SFR applications due to safety reasons. The 
challenges included changing gas-usage patterns, snap loads (i.e. loads 
that lead to false closures), business-critical gas supply 
applications, system configurations, pressure ratings, and the sizes of 
commercially available EFVs. Among the challenges discussed by the 
commenters, snap loads (loads that lead to false closures), load 
variation, and proper EFV sizing seemed to be of the greatest concern.
    Overall, industry, trade association, government, and municipality 
commenters agreed that the Interim Evaluation failed to accurately and 
fully portray a variety of the technical and operational challenges and 
costs and benefits associated with expanded EFV requirements. These 
commenters either stated the report was lacking in certain areas or did 
not comment. In general, commenters, including AGA and APGA, strongly 
cautioned against the broad expansion of EFV requirements beyond those 
for SFRs, citing operators' lack of experience and design complexities. 
Specifically, APGA, SWC, AGA, LG, NG, AU, TPA, IUB, NGA, and MAE all 
found the Interim Evaluation's discussion of the challenges of proper 
EFV sizing protocols, system configuration, and changes in gas-usage 
patterns to be inadequate and to contain false assumptions. Due to 
these concerns, MAE suggested that any EFV requirements should only 
affect new installations. Likewise, AGA supported the installation of 
EFVs on new and entirely replaced service lines in the following 
applications only:
     Service lines to SFRs;
     SFR service lines and branched SFR service lines installed 
at the same time;
     A branched SFR service line branching off an existing SFR 
service line that does not contain an EFV provided there is sufficient 
line capacity;
     A branched SFR service line branching off an existing SFR 
service line that contains an EFV sized appropriately for both 
customers provided there is sufficient line capacity;
     Multi-family installations, including duplexes, triplexes, 
and fourplexes, with individual meter sets, a known customer load 
(based on meter capacity) not exceeding 1,000 standard cubic feet per 
hour (SCFH), and a load that is not expected to increase over time; and
     Small commercial customers with a known customer load 
(based on meter capacity) not exceeding 1,000 SCFH through a single 
service line and where the load is not expected to increase over time.
    AU, KGS, APGA, SWC, GBI, AGA, and the City of Ellensburg, WA, were 
concerned with the challenges of snap loads and the loss of continuous 
supply. Snap loads may occur when the amount of natural gas required to 
meet demand suddenly increases, which is generally due to many 
appliances being turned on at one time. GBI, AU, and AGA suggested that 
requiring EFVs for lines not exceeding 1,000 SCFH based on meter size 
is reasonable, but the false closure and load variation challenges make 
using EFVs for applications that exceed 1,000 SCFH difficult. AU 
specifically stated that the failure (false closure or malfunction) of 
EFVs at high loads during winter frost is difficult to mitigate and is 
an inconvenience to customers who lose service. AU stated that winter 
frost makes pipeline excavation to repair lines difficult due to frozen 
soil. SWC commented that business disruptions and loss of service in 
vital areas such as high-occupancy dwellings created a safety hazard. 
KGS recommended that service lines serving multiple customers should 
not use a single EFV due to the increased degree of variation in the 
gas flow rates.
    PHMSA received different approaches from commenters regarding the 
proper selection of an EFV for a pipeline, or what is referred to in 
the Interim Evaluation as ``EFV sizing''. The trip point is the 
specific point in which the

[[Page 41463]]

EFV ``trips'', or closes, the valve due to gas pressure differential 
and is essentially the factor that guides the size selection of an EFV. 
In the Interim Evaluation, PHMSA suggested an EFV's trip point should 
be less than, but close to, the flow rate of a complete line rupture.
    Commenters indicated that PHMSA's approach for trip point selection 
either led to tripping too easily or not at all. R.W. Lyall, an EFV 
manufacturer, further submitted that EFVs should be sized so that the 
EFV trip point, at the minimum system pressure, is above the maximum 
anticipated load and is above meter capacity. GBI suggested an EFV 
should be selected that operates at least 1.5 times the meter rating at 
the minimum design inlet pressure. Finally, SWC and NGA specifically 
commented that, due to the complexity of design found in multi-family 
industrial and commercial service lines, a common approach for sizing 
is not possible. With regard to the challenges of commercially 
available EFVs, PHMSA received two comments. GBI, an EFV manufacturer, 
commented that the commercial availability for most applications, even 
those considered large, is not a problem. In contrast, MAE stated that 
the commercial availability of EFVs for non-residential load profiles 
is an assumption made on the part of PHMSA that may be inaccurate.

PHMSA Response

    A number of the comments PHMSA received focused on a concern that 
EFVs could trip inadvertently and may cause unnecessary service 
disruptions. PHMSA agrees that variations in the configuration of 
service lines make it difficult to impose specific sizing requirements 
for various types of service lines and customers. However, if an 
operator installs an EFV and operates it in accordance with a 
manufacturer's specifications, the EFV should operate safely without 
the need for a prescriptive sizing requirement even when customer gas 
usage changes, unless the change were so large as to require a new 
service line.
    Overall, PHMSA disagrees with the comments that EFVs are prone to 
failure and inadvertent tripping due to variations in gas flow, 
location, etc. Research and available data has shown very few failures 
with EFVs in actual usage. Operators in the United States have gained 
considerable experience with EFVs since 1999 mainly with SFRs. The NRRI 
conducted a survey on EFV installation and operators' experiences with 
EFVs installed on single family residential service lines found of 2.5 
million EFVs installed on SFRs only 223 failed.\4\ In Europe, BEGAS, 
the government owned gas company in Eastern Austria, reported that EFVs 
have been installed since 1993 on service lines to hospitals, large 
facilities, production plants, etc. Out of 26,000 BEGAS installations 
there have been no spurious failures.\5\ PHMSA maintains proper 
operator installation using manufacture direction and maintenance of 
EFVs is paramount to their success. Therefore, PHMSA is not proposing a 
protocol for EFV installation. PHMSA is only advising operators to 
install EFVs as the manufacturer directs and the service safely 
requires.
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    \4\ ``Survey on Excess Flow Valves: Installations, Cost, 
Operating Performance and Gas Operator Policy'', Ken Costello, The 
National Regulatory Research Institute, March 2007.
    \5\ ``Operational Experiences with Excess Flow Valves for 
Service Lines and Main Lines in Network Operation'', Peter Masloff, 
Technology Department Director, BEGAS--Burgenlandische 
Erdgasversorgungs AG. http://pipelife-gasstop.com/media/gasstop/pdf_englisch/GWF_7_2003_Excess-Flow-Valves_Experience-report.pdf.
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    Operators and manufacturers that PHMSA contacted stated they 
typically size an EFV in such a way that it trips at 20% to 30% above 
the maximum service load it will encounter. It is possible that this 
trip point could be too high for small leaks, however, EFVs are 
intended to react to ruptures, not small holes.
    Likewise, one commenter mentioned winter time excavation of lines 
to repair them due to EFV failure was a concern. PHMSA suggests that 
digging in frozen ground in winter is not any more difficult than 
digging concrete or curbside if valve is located underneath. Again, 
PHMSA believes, proper sizing of an EFV is the key to avoiding all 
these issues. PHMSA has surveyed twice in the past, and there were only 
one or two instances of EFV failure in greater than a million services 
over many years. All major EFV manufacturers PHMSA contacted indicated 
that they are available to help operators to properly size their 
valves.
    PHMSA received no information to indicate that pressure ratings 
and/or the size of commercially available EFVs are a problem for the 
expansion of EFVs to certain other types of service. Currently, the 
normal minimum pressure design (the minimum anticipated design 
pressure) is 10 psig. The maximum pressure of composite materials (250 
psig), plastic (125 psig), and steel (1,000 psig and up), does not pose 
a problem. There is no pressure limit on an EFV's performance except 
that, when activated, the EFV seat must be able to withstand the 
pressure. The pressure limit is normally constrained by the design of 
the carrier pipe. EFVs covered by ASTM F2138 must have a maximum inlet 
pressure of at least 125 psig, while ASTM F1802 applies to EFVs with a 
pressure rating of up to 125 psig. However, for very high-volume EFV 
applications, such as those for industrial customers, technical 
standards may need to address operating design pressures that exceed 
125 psig.
    Therefore, PHMSA proposes to expand EFV applications to new or 
replaced service lines for SFRs with branched lines; multi-family 
installations, including duplexes, triplexes, and fourplexes with 
individual meter sets and known customer loads not exceeding 1,000 
SCFH; and small commercial customers with known loads not exceeding 
1,000 SCFH. EFVs will not be required in the above-mentioned 
applications if one of the existing Sec.  192.383 exceptions is 
present.
    While the proposed expansion of EFVs would have costs, PHMSA 
believes the costs are justified by the added protection for gas 
customers, as the only proposed exceptions are for large apartment 
buildings, industrial or commercial users for whom EFVs may not be 
practical due to inherent design complexity and continuous supply 
demands. In those situations (loads exceeding 1,000 SFCH), PHMSA 
believes curb valves will provide the best possible option for improved 
safety at this time. PHMSA does not have definitive data, but some 
commenters stated that 2% to 5% of customers would fall into one of the 
exceptions for EFVs, which would include many of those facilities over 
with loads exceeding 1,000 SFCH.
A.2. Additional Challenges Not Addressed by the Interim Evaluation
    The ANPRM also solicited comments on whether additional challenges 
existed beyond those discussed in the Interim Evaluation. MAE commented 
that the addition of more EFVs in natural gas systems could create an 
increase in safety hazards resulting from the maintenance of failed 
EFVs and EFVs that fail to trip on small leaks (i.e., pinhole 
corrosion). These safety hazards would be due to increased excavation 
activities, which place more workers in high-traffic and congested 
areas. MAE also mentioned that excavation contractors may be less 
cautious around service lines if they believe they will not leak 
because of an installed EFV. TPA stated that the mandated use of EFVs 
for new or replaced transmission or gathering lines should not be 
pursued until further study is completed.

[[Page 41464]]

PHMSA Response

    MAE's comment regarding excavation damage prevention can be 
addressed with proper EFV installation techniques and the normal course 
of training for pipeline operator personnel, including training on 
excavation damage prevention. Excavation contractors hired by operators 
go thru same damage prevention training as operators regarding safe 
digging practices and are aware of the dangers of gas leaks and 
explosions. In regard to TPA's comment, PHMSA agrees at this time and 
is proposing to expand EFV use only to distribution lines, not 
gathering or transmission lines. PHMSA has found that there is a lack 
of experience with EFVs on gathering and transmission lines in addition 
to problems with contaminants and other factors.
A.3. Use of Curb Valves (Manual Shut-Off Valve) as an Alternative to 
EFVs
    The ANPRM sought comments on the use of curb valves as an 
alternative to EFVs. Most commenters agreed that use of a curb valve is 
a viable alternative to EFV use in some cases. In fact, the City of 
Ellensburg, Washington, stated the installation of a curb valve should 
be considered by PHMSA to be equivalent to the installation of an EFV. 
The City of Ellensburg mentioned that current Washington State 
regulations require the use of a curb valve if an EFV is not installed.
    MAE, APGA, and APA commented that operators have experience with 
curb valves, but their use presents certain challenges. The technical 
challenges expressed by commenters with regard to curb valve use 
include: Maintenance of the valve; location of the valve for 
accessibility; third-party damage to the valve; recordkeeping as to the 
location of the valve; ensuring the box does not place stress on the 
pipe; and the delayed shut-off response inherent in curb valve design 
during emergency situations. APGA commented that curb valves require 
trained personnel to manually close the valve with a special key. APGA 
further stated that ``squeezing'' off the gas in the line is sometimes 
quicker than using a curb valve for stopping the flow of gas.

PHMSA Response

    Historically, curb valves have proven to be a very effective 
mechanism for interrupting the flow of gas in both routine maintenance 
situations and in emergencies. Other than a curb valves, distribution 
operators have tools (large pliers) to squeeze pipe to shut off gas 
supply. Curb valves require that a person make a conscious decision to 
physically close the valve itself, thereby avoiding inadvertent 
closures. Curb valves are slightly more expensive than EFVs and require 
some maintenance and need to be located in an accessible site. The 
primary disadvantage curb valves have is the time it can take to 
mobilize to the valve site and close the valve.
    It is not technically feasible to expand EFV use to service lines 
operating at loads exceeding 1,000 SCFH. This is largely due to issues 
with reliable service, load fluctuation, the lack of experience with 
EFV usage in larger applications, and the complexity of design issues. 
Therefore, in the case of service lines operating at more than 1,000 
SCFH, PHMSA proposes to require curb valves be installed and maintained 
in such a manner that emergency personnel can access them. Although it 
does not come at a prohibitive cost, the installation of curb valves is 
slightly more expensive than the installation of EFVs.
A.4. Additional Situations Where the Installation of EFVs May Not Be 
Feasible
    The ANPRM solicited comments concerning additional situations not 
found in the Interim Evaluation where the installation of an EFV may 
not be feasible or practical. AGA and SWC commented that they agreed 
with the examples cited in section 10.3.1 of the Interim Evaluation. 
MAE commented that lines containing contaminants, and distribution 
systems with a history of transporting liquids, may create situations 
where EFVs are impracticable.

PHMSA Response

    Section 192.383 currently includes exceptions for EFV installations 
with regard to SFRs. With respect to MAE's concern regarding lines 
containing contaminants and distribution systems with a history of 
transporting liquids, the proposed exceptions would waive the EFV 
requirement for those systems for which installing EFVs would be 
impracticable. This proposed rule incorporates the existing Sec.  
192.383 exceptions in place and would extend them to the additional 
service line applications covered in this NPRM.

B. Economic Analysis Considerations

    PHMSA requested comments on the potential costs of modifying the 
existing regulatory requirements. PHMSA requested that commenters 
provide information and supporting data on the potential quantifiable 
safety and societal benefits, the potential impacts on small 
businesses, and the potential environmental impacts of modifying the 
existing regulatory requirements. The economic analysis for the 
installation of EFVs on services other than SFRs involves challenges 
including the quantification and monetization of costs and benefits.
B.1. Categories of Service for Expanded Use of EFVs
    The ANPRM requested comments on section 10.3.2. of the Interim 
Evaluation. This section describes the ``Categories of Services'' in 
which PHMSA could expand EFV requirements. PHMSA sought input as to 
whether the categories accurately represented current ``real world'' 
applications and which categories are most likely to benefit from EFV 
expansion.\6\
---------------------------------------------------------------------------

    \6\ The categories of service from the Interim Evaluation are: 
Branched service line serving single-family residence; Service line 
serving one (or two adjoining) multi-family residential building(s) 
with one meter or one meter header or manifold; Non-residential 
services to space and water heat customers; Other applications where 
the service line configuration or EFV specification is more complex; 
and Industrial customers.
---------------------------------------------------------------------------

    AGA largely agreed with the categories of service presented in the 
Interim Evaluation, while MAE commented that the categories are 
sufficient for economic analysis only. MAE further states that if the 
rule in its final form creates different requirements among these five 
categories, the rule may prove difficult to implement because an 
operator may not be clear which category a service may fall into.
    AGA, APGA, AU, Nicor, and SWC advised PHMSA not to apply the EFV 
requirements to all five categories named in the Interim Evaluation. 
Specifically, the commenters supported all categories of service with 
the exception of those with services requiring greater than 1,000 SCFH. 
Those services with 1,000 SCFH requirements or higher are generally 
sensitive to loss of supply and may have complex configurations not 
conducive to EFVs. Nicor, APGA, and AGA commented that service lines 
serving one multi-family building with one meter should be limited to 
duplexes, triplexes, and fourplexes with known loads not exceeding 
1,000 SCFH, and that non-residential services to space and water heater 
customers should be limited to 1,000 SCFH due to possible snap loads. 
Additionally, AGA stated that there are factors to consider for 
applying EFVs to non-residential service lines such as commercial food 
sales, food service, and health care, and that these applications would 
require unique analysis. These service applications are susceptible to 
loss of service issues and

[[Page 41465]]

frequently have complex designs. SWC likewise stated that EFVs work in 
applications not exceeding 1,000 SCFH. The industrial customer's 
category was mentioned by all those commenting on this question as a 
category not suitable for mandated EFV use due to unpredictable load 
changes over the life of the service and inherent design complexities.

PHMSA Response

    PHMSA has reviewed the comments on the possible expansion of 
categories of gas services requiring EFVs. PHMSA proposes expansion of 
EFV use for only certain categories of service presented in the Interim 
Evaluation. Specifically, PHMSA proposes to expand EFV requirements to 
include:
     Branched SFR service lines off of existing SFR service 
lines that do not contain an EFV and have a known load not exceeding 
1,000 SFCH based on meter capacity;
     SFR service lines and branched SFR service lines installed 
at the same time with a known load not exceeding 1,000 SFCH based on 
meter capacity;
     Branched SFR service lines off of existing SFR service 
lines with a known load not exceeding 1,000 SFCH based on meter 
capacity;
     Multi-family residences with individual meter sets and a 
known customer load not exceeding 1,000 standard cubic feet per hour 
(SCFH) based on meter capacity; and
     Small commercial customers with a known customer load 
(based on meter capacity) not exceeding 1,000 SCFH through a single 
service line.
    Operators with services lines with loads exceeding 1,000 SCFH will 
be required to utilize curb valves. Since PHMSA has found commercial 
and industrial service lines often have complex designs and/or require 
constant reliable service requirements, PHMSA has decided that these 
categories of service are not good candidates for requiring EFV use. 
Often these services meet or exceed a demand for 1,000 SCFH. PHMSA 
therefore proposes the 1,000 SCFH threshold based on comments and PHMSA 
experience however we invite comment.
B.2. Cost Factors Associated With Mandatory EFV or Curb Valve 
Installation
    The ANPRM sought comments as to whether there are any other issues 
related to the costs associated with mandatory EFV or curb valve 
installation that should be considered aside from those mentioned in 
the Interim Evaluation. Both AGA and SWC noted that cleaning labor for 
EFVs on larger service lines, inadvertent trips and the subsequent loss 
of business for commercial customers and accidental environmental 
discharges are additional costs to the operator that PHSMA should 
consider. APGA commented that EFV installation costs for large-volume 
EFVs may be higher due to the fact there is less demand for them, and 
PHMSA should not assume the same unit price as a SFR EFV. Both NGA and 
Nicor mentioned that installation of EFVs may conflict with 
restrictions placed by local jurisdictions on excavating paved roads to 
access existing or install new EFVs.

PHMSA Response

    PHMSA has determined that installing EFVs by using manufacturer 
guidelines should eliminate most EFV tripping errors. EFVs are 
commercially available in a wide variety of pipe sizes. Some 
manufacturers report that they make EFVs for larger than 2-inch IPS 
(Iron Pipe Size) diameters (typical SFR size), and at least one 
manufacturer is developing a 10,000 SCFH EFV. The principles of 
operation remain the same as valve size and trip point increase, making 
EFVs for larger loads and pipe sizes technically feasible. PHMSA also 
noted that SFR installation of EFVs, which began in 2010, depended on 
manufacturer guidelines for installation. No PHMSA guidance was issued. 
Since 2010 the SFR EFVs required to be installed have resulted in no 
false trips or failures if installed as manufacturer directed. PHMSA 
has found manufacture guidelines to be well within the safety margin 
and they know their product better than PHMSA in most instances.
    Additional costs for purging lines are minimal as documented by AGA 
estimates. AGA states many operators either have already installed EFVs 
on some services beyond SFRs or are planning to start. The price per 
unit has decreased in recent years given the development, improved 
availability, and quality of EFVs. Higher installation costs for high 
volume EFVs have been taken into account in the cost/benefit analysis 
through the averaged cost. Similarly, installation costs for curb 
valves are more expensive than smaller volume EFVs and the cost/benefit 
analysis considered that aspect.
B.3. Who should pay for the installation and maintenance of EFVs or 
other alternatives and why?
    PHMSA sought comments as to who should pay for the costs of 
installation and maintenance of EFVs. Comments were received from AGA, 
SWC, and MAE concerning who should be expected to pay for the 
installation and maintenance of EFVs or other alternatives if 
applicable regulatory requirements were implemented. MAE stated that 
operators should pay for the initial installation of valves, but any 
changes to customer loads requiring EFV installation should be at the 
customer's expense.

PHMSA Response

    Because operators would already be newly installing or replacing 
pipelines, i.e. they would already have a trench open and be in place 
to work at the site, the addition of an EFV adds only minor costs 
(PHMSA estimates the cost of an EFV including installation is $30). 
This is supported by the AGA response to the excess flow valve census 
(Docket PHMSA-2012-0086, page 2), in which AGA indicated ``the 
incremental cost per installation of EFVs is relatively minimal.'' AGA 
further committed to expand the installation of EFVs beyond SFR 
services by June 2013. This also supports the notion that cost is not a 
major factor for the expansion of EFV use on new and fully replaced 
service lines beyond SFRs as proposed by this NPRM. PHMSA additionally 
utilized ANPRM comments which included numerical data on the costs for 
EFVs provided by operators as well as PHMSA Technical Advisory 
Committee \7\ input for this proposed rulemaking.
---------------------------------------------------------------------------

    \7\ Joint Meeting of the PHMSA Technical Advisory Committees 
held Dec. 11-13, 2012, Alexandria, Virginia. Transcripts available 
at Regulations.gov., docket PHMSA-2009-0203.
---------------------------------------------------------------------------

B.4. Are there any opportunity costs associated with the installation 
of EFVs? A particular time of day that is optimal for installation? How 
long does installation take?
    The ANPRM sought comment as to any opportunity costs and 
installation timelines that EFVs or alternatives may require. AGA, 
APGA, SWC, MAE, and Nicor commented on this question. These commenters 
all mentioned the loss of gas supply as a potential opportunity loss 
for customers due to the longer period of time needed to install an EFV 
on larger service lines. Additionally, the operators would spend more 
time and resources installing EFVs or alternatives versus maintenance, 
construction, operation, and inspection activities. APGA responded that 
EFVs do not need to be installed at any particular time of day, with 
most installations occurring during normal business hours.

PHMSA Response

    Given industry's commitment to support EFV installation on new and

[[Page 41466]]

fully replaced service lines where practically and technically 
feasible, PHMSA believes that the cost of installation of EFVs, as 
proposed by the regulation, are sufficiently low that they will not 
interfere with other operator expenditures. PHMSA agrees with industry 
that the incremental cost per installation is minimal and would be 
utilized during the new construction or the replacement of service 
lines when industry resources (labor) are already at the installation 
sites.
B.5. Are there any other issues related to benefits associated with the 
mandatory EFV or curb valve installation that should be considered when 
performing the benefit/cost analysis, other than those listed in 
section 10.5 ``Defining Benefit Factors'' of the Interim Evaluation? 
Does the methodology utilized in the Interim Evaluation appropriately 
quantify the expected number of incidents or consequences averted? Can 
a conclusion be satisfactorily made concerning the cost and benefits of 
EFV or curb valve installation as presented in the Interim Evaluation?
    PHMSA asked for comments concerning any other issues that had not 
yet been considered regarding benefits associated with mandatory EFV or 
curb valve installation. IUB, NGA, MAE, and AGA commented on additional 
cost/benefit factors that had not yet been considered. NGA stated that 
upgrading existing EFVs to meet the increased demand loads will add 
significant costs to customers and will conflict with restrictions 
placed by local jurisdictions on excavating paved roads to access 
existing or install new EFVs. Similarly, MAE stated that load changes 
due to changes in ownership may cause extra expenses from service 
modifications and industrial process equipment damage. AGA and SWC were 
unaware of any additional cost/benefit factors other than those in the 
Interim Evaluation.
    In terms of the methods PHMSA used in the Interim Evaluation to 
study EFV expansion, the comments were generally supportive. MAE, SWC, 
APGA, and AGA commented that they typically agreed with the methodology 
used by PHMSA. However, some trade association comments also indicated 
there was some concern about the assumptions PHMSA made with its 
methodology. In particular, there were concerns with the ``incidents 
averted calculation,'' including the associated root cause analyses and 
assumed continued operations of all lines over 10 psi. AGA further 
commented that the analysis could not draw reliable conclusions. IUB 
suggested PHMSA should develop a separate analysis for each of the 
classes of service.

PHMSA Response

    PHMSA's analysis was based on incident-specific data, which were 
obtained from the incident reports submitted by operators. PHMSA 
explained how it used the data, including the assumptions it made in 
applying the operational and other data obtained from incident reports, 
to filter past incidents that would likely not have been averted or 
mitigated had an EFV been installed. The remaining candidate incidents 
might have been averted or mitigated had an EFV been installed, but 
PHMSA did not conclusively assert that all of those candidate incidents 
definitively would have been averted or mitigated. However, based on 
the analysis of the best available data, PHMSA is convinced that the 
installation of EFVs on additional service lines could help avert or 
mitigate future incidents. The candidate incidents, incidents that 
PHMSA can classify as preventable by EFV installation, represent the 
scope of incidents that might have benefited from an EFV during the 
time period studied. PHMSA requests comments on whether the incidents 
that PHMSA has identified are likely to have been averted or mitigated 
if an EFV or manual service line shut-off valve had been in place. In 
addition, PHMSA does not have an EFV sizing protocol, nor was one 
proposed in the Interim Evaluation. The methodology for sizing EFVs was 
one of the challenges described in section 9.1 of the Interim 
Evaluation.

C. Technical Standards and Guidance for EFVs

    The OMB circular A-119, ``Federal Participation in the Development 
and Use of Voluntary Consensus Standards in Conformity Assessment 
Activities,'' directs Federal agencies to utilize voluntary standards, 
both domestic and international, whenever feasible and consistent with 
law and regulation. The current regulation at 49 CFR 192.381 only 
requires EFVs to be manufactured and tested by the manufacturer 
according to an industry specification or the manufacturer's written 
specification. The regulation does not prescribe a precise 
specification. PHMSA solicited comments as to the need for the adoption 
of consensus standards for EFV specification.
C.1. Should PHMSA incorporate by reference the following standards? 
Manufacturers Standardization Society (MSS) SP-115-2006 Design, 
Performance & Test, ASTM International (ASTM) F1802-04--Standard 
Specification for Excess Flow Valves for Natural Gas Service, and ASTM 
International (ASTM) F2138-01--Standard Specification for Excess Flow 
Valves for Natural Gas Service?
    The comments received by PHMSA largely indicated that the 
incorporation by reference of any standards for EFVs is not necessary. 
AGA, supported by MAE, stated in their comments that manufacturers 
already construct and test EFVs according to industry consensus 
standards MSS SP-115-2006, ASTM F-1802, and ASTM F-2138. Operators have 
been successfully installing EFVs using manufacturer guidance with no 
known safety issues arising. Similarly, AGA and SWC expressed concern 
regarding the incorporation by reference of any industry standards due 
to the delay in updating the pipeline safety statutes, which in turn 
would prevent the timely installation of the newest and best EFVs on 
the market. As an alternative to PHMSA incorporating standards, 
commenters suggested that PHMSA continue to allow operators to utilize 
manufacturer installation guidance already available.

PHMSA Response

    PHMSA will not be incorporating any new standards by reference for 
EFVs into the pipeline statutes at this time but may do so in the 
future. All EFVs currently available have been manufactured and tested 
to current consensus standards. Additionally, PHMSA has not 
incorporated any standards for EFVs into the pipeline safety 
regulations for SFRs and has not found any issues with that approach. 
If the need for incorporation by reference does become necessary, PHMSA 
will review the issue.
C.2. Are there alternatives to the standards referenced in C.1.?
    PHMSA also asked for comments on three current consensus standards 
and if there are alternatives to them. APGA and APA stated they were 
unaware of additional standards beyond those listed in the Interim 
Evaluation, with the exception of ``MSS SP-142-2012 Excess Flow Valve 
for fuel gas service, NPS 1 1/2 through 12'' for larger sized EFVs. 
Similarly, MAE, deferring to AGA comments, stated it was aware of no 
other standards except for the Gas

[[Page 41467]]

Piping Technology Committee (GPTC) Appendix G192-8 in the Z380 Guide.

PHMSA Response

    PHMSA is also unaware of any alternatives to the three standards 
listed in the Interim Evaluation for EFVs for natural gas service. As 
for selection and sizing guidelines, PHMSA will request GPTC to develop 
comprehensive standards for selection, installation, and performance 
testing of EFVs for a variety of design considerations and service line 
configurations and operating conditions. This guidance will be in 
addition to guidance provided by manufacturers and will act as a 
supplement to address various situations which may not be elaborated on 
in manufacturer guidance. PHMSA will also issue advisory bulletins if 
we become aware of new conditions of concern for EFV installation.
C.3. Are guidelines or technical standards needed for developing and if 
so, why?
    PHMSA asked for comments as to whether EFV guidelines or technical 
standards are in need of development, and if so, why. Both MAE and SWC 
commented that a standard approach or some sort of guidance for sizing 
EFVs, and criteria for identifying adverse conditions, may be needed. 
SWC agreed and stated that additional guidance, not necessarily 
standards, need to be developed. SWC additionally asked PHMSA to issue 
advisory bulletins if PHMSA finds additional conditions in which an EFV 
installation is advisable. Likewise, AGA stated that the current 
industry standards used in manufacturing are satisfactory, and EFV 
performance testing using industry standards cannot be accomplished in 
an economically, technically, and operationally feasible manner on 
installed service lines.

PHMSA Response

    PHMSA finds that additional technical standards development for 
EFVs at this time is not necessary. However, PHMSA is considering 
requesting a new or existing industry committee to develop guidelines 
for a standard approach to the sizing and installation of EFVs. 
Industry guidelines have already been developed for the implementation 
of (Distribution Integrity Management Program) DIMP by the GPTC and 
industry gas associations. PHMSA believes these guidelines should be 
developed in a more comprehensive manner to include the selection, 
installation, and performance testing of EFVs for a variety of design 
considerations and service line configurations. The identification of 
operating conditions and system configurations that are incompatible 
with EFVs could also be included in the guidelines.

D. Additional Comments

    Only one commenter, MAE, provided additional information and 
supporting data with regard to additional potential costs and impacts 
of expanding EFV use. Specifically, MAE stated that it had installed 
5,102 EFVs on SFRs in 2010. If applications beyond SFRs were required 
for service lines, MAE would have installed an additional 1,123 EFVs in 
2010. MAE stated the estimated average cost for an EFV is $50.00 and 
that there would be no anticipated significant impact on the 
environment.
    Several comments from members of the public were received in 
response to the ANPRM. One commenter, Courtney D. Brown, supported the 
expanded use of EFVs to protect people in the vicinity of large 
businesses and/or entertainment venues. Brown commented that the cost 
of installing EFVs does not outweigh the loss of lives, homes, or 
businesses when an incident occurs. Commenter Rebecca Lee Roter 
expressed concern with the lack of regulatory requirements in place for 
natural gas and transmission lines in Class 1 areas. Roter indicated 
that these areas required little routine inspection and no emergency 
plans.

PHMSA Response

    PHMSA received several additional comments on the topic of the 
expanded use of EFVs. The information from MAE was helpful for PHMSA to 
get a better understanding of the costs and impacts of expanding EFV 
use. PHMSA has estimated an average cost of $30 per valve--see the 
initial RIA for further discussion. Additionally, PHMSA is aware of the 
concern for public safety expressed by Brown and Roter.

III. Section by Section Analysis

Section 192.381 Service Lines: Excess Flow Valve Performance Standards

    PHMSA is proposing to revise the language used in Sec.  192.381(a) 
to remove the words ``single residence''. This change reflects the 
proposed expansion of EFVs to applications beyond SFRs.

Section 192.383 Excess Flow Valve Installation

    PHMSA is proposing to revise Sec.  192.383(b) to include the 
proposed new categories of service on which EFVs would be installed. 
The existing category of service (new or replaced service line serving 
a SFR) would remain. The new categories of service would include 
branched service lines to a SFR installed concurrently with the primary 
SFR service line; branched service lines to a SFR installed off a 
previously installed SFR service line that does not contain an EFV; and 
small commercial customers and multi-family installations. The existing 
exceptions for EFV installation found in Sec.  192.383(b)(1) through 
(4) would remain but would be moved to Sec.  192.383(c)(1) through (4).
    PHMSA is proposing the addition of Sec.  192.383(d) to allow 
existing service line customers the option of requesting an EFV 
installation on their service line if one or more of the exceptions 
listed in Sec.  192.383(c)(1) through (4) are not met. Operators would 
install an EFV at the request of customer on a mutually agreeable date 
and time. This option would be available to service line customers on 
existing service lines when the customer applies for service and for a 
period of 90 days after service has started. Operators will rely upon 
the appropriate State regulatory agencies to determine who would bear 
the costs of installation for customer requested EFVs.
    With regard to the issue of installation costs of a customer 
requested EFV, PHMSA has no jurisdiction concerning natural gas rates 
or any costs incurred due to installation of an optional EFV at a 
consumer's request. Rather, the appropriate State regulatory agency 
will determine all issues related to the costs of installation.
    PHMSA proposes to add paragraphs (e)(1) through (2) which would 
require that operators notify existing service line customers of their 
right to request an EFV in writing. Master meter operators may 
continuously post a general notification in a prominent location 
frequented by customers. Operators must also have evidence of customer 
notification. Operator evidence of notification could include such 
items as a statement printed on customer bills or mailings. Small 
Master meters would be ask to prove that they posted a notice at some 
common location. Each operator must maintain a copy of the customer EFV 
notice for three years. This notice must be available for inspection by 
the Administrator or a State agency participating under 49 U.S.C. 60105 
or 60106.

Section 192.385 Manual Service Line Shut-Off Valve Installation

    PHMSA is proposing the addition of Sec.  192.385 to require the 
installation of a manual service line shut-off valve, such as a curb 
valve, when an EFV is not installed in accordance with Sec.  192.383. 
This proposed section also includes a

[[Page 41468]]

definition for ``Manual service line shut-off valve'' to further 
clarify the applicability of this provision.

V. Regulatory Notices

A. Statutory/Legal Authority for This Rulemaking

    This Notice of Proposed Rulemaking is published under the authority 
of the Federal pipeline safety law (49 U.S.C. 60101 et seq.). Section 
60102 authorizes the Secretary of Transportation to issue regulations 
governing design, installation, inspection, emergency plans and 
procedures, testing, construction, extension, operation, replacement, 
and maintenance of pipeline service lines. Further, section 
60109(e)(3)(B) states that ``the Secretary, if appropriate, shall by 
regulation require the use of excess flow valves, or equivalent 
technology, where economically, technically, and operationally feasible 
on new or entirely replaced distribution branch services, multifamily 
facilities, and small commercial service facilities.''

B. Executive Order 12866, Executive Order 13563, and DOT Regulatory 
Policies and Procedures

    Executive Orders 12866 (Regulatory Planning and Review) and 13563 
(Improving Regulation and Regulatory Review) require agencies to 
regulate in the ``most cost-effective manner,'' to make a ``reasoned 
determination that the benefits of the intended regulation justify its 
costs,'' and to develop regulations that ``impose the least burden on 
society.'' Expansion of the use of EFVs and curb valves is a non-
significant regulatory action under Executive Order 12866 and the 
Department of Transportation's (DOT's) Regulatory Policies and 
Procedures. This proposed requirement has been reviewed by the Office 
of Management and Budget in accordance with Executive Order 13563 and 
Executive Order 12866 and is consistent with the requirements in both 
Orders.
    During the initial stages of the development of the regulatory 
evaluation, PHMSA developed the survey recommended by the Interim 
Evaluation, which was aimed at gathering data on EFV and curb valve 
costs and benefits. PHMSA intended to send the survey to all operators 
in order to ensure that any proposed changes were based upon 
comprehensive and useful data. The goal was to have a better 
understanding of the costs of EFVs on installations beyond SFRs from 
those who have deployed them already, and on the costs and 
effectiveness of curb valves. Nine companies were asked to pilot the 
census, and a copy was published in the Federal Register.
    Both the census pilot and the comments to the proposed census 
published in the Federal Register quickly revealed that company 
databases are not currently set up to provide the necessary data. Load 
and customer type data are stored separately from data on EFVs and from 
data on incidents, and grouping customers into the census categories 
would, in some cases, cost more in labor for the database work and 
analysis than it would cost to implement this proposed rule itself. As 
a result of discussions with industry representatives and the NTSB, 
PHMSA chose to propose a rule similar to the framework included in 
Section 22 of the Pipeline Safety, Regulatory Certainty, and Job 
Creation Act of 2011.
    The initial Regulatory Impact Analysis (RIA), which is included in 
the docket for this rulemaking, does not address the benefits and costs 
of the proposal to require operators to install EFVs on branched 
service lines servicing SFRs because the benefits and costs of this 
proposal were addressed in the regulatory impact analysis for a 
previous rulemaking \8\. The initial RIA found that the estimated 
monetized benefits do not exceed the monetized costs in all cases. For 
the proposal to require EFVs on new or replaced service lines servicing 
MFRs, the monetized costs exceed monetized benefits even when using 
lower bound cost estimates. PHMSA believes that the proposals are 
nevertheless justified by the significant unquantifiable benefits, such 
as avoided evacuations and environmental damage from EFV-preventable 
incidents, including incidents that could not be included in the 
analysis because they do not meet PHMSA reporting criteria. EFVs also 
provide protection against a low-probability but high-consequence 
incident that could inflict mass casualties.
---------------------------------------------------------------------------

    \8\ ``Pipeline Safety: Integrity Management Programs for Gas 
Distribution Pipelines.'' 74 FR 63906 (December 4, 2009) RIN 2137-
AE15.
---------------------------------------------------------------------------

    The proposed rule is assumed to affect approximately 1,289 natural 
gas distribution operators and 222,114 service lines per year on 
average. The RIA assumed valves do not have network effects, in other 
words, each EFV operates independently and the costs and benefits of 
EFV installation simply scale linearly. The total annual benefits of 
the rule are $7,735,725 when discounted at 7 percent, while the costs 
range from $4,381,734 to $17,848,499 depending on the costs of the 
valve. At the 3% discount rate the total benefits of the rule are 
$2,748,456, while the costs range from $4,967,145 to $20,311,030. PHMSA 
requests public comments on its monetized estimates of the proposed 
rule's benefits and costs.
    The following tables summarize the quantified benefits and costs of 
this proposed rule at the 3 and 7% discount rates:

[[Page 41469]]

                     Estimated Benefits and Costs: Low and High Scenarios, 7% Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                   Annualized       Annualized      Annualized
                                  Number of                         cost, low    cost, from DIMP    cost, high
           Category                valves         Annualized     scenario  ($15  Analysis  ($20-  scenario  ($50
                                 installed,         benefit       EFV, $10 curb    $30 per EFV)   EFV, $100 curb
                                   year 1                            valve)                           valve)
----------------------------------------------------------------------------------------------------------------
SFR (as upper bound estimate   ..............  $11-27 million..  ..............  $8 million.....  ..............
 for Branched SFR) \9\.
Multi-Family EFV.............         153,985  $1,144,372......      $3,102,295  ...............     $10,340,985
Commercial EFV...............          27,174  $1,434,683......         547,467  ...............       1,824,890
Industrial/Large Other Curb            40,955  $5,156,671......         550,073  ...............       5,500,726
 Valve \10\.
Notification and               ..............  ................         181,899  ...............         181,899
 Recordkeeping.
                              ----------------------------------------------------------------------------------
    Total....................         222,114  $7,735,725......       4,381,734  ...............      17,848,499
----------------------------------------------------------------------------------------------------------------

                     Estimated Benefits and Costs: Low and High Scenarios, 3% Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                                    Annualized      Annualized
                                                     Number of                       cost, low      cost, high
                    Category                          valves        Annualized    scenario  ($15  scenario  ($50
                                                    installed,        benefit      EFV, $10 curb  EFV, $100 curb
                                                      year 1                          valve)          valve)
----------------------------------------------------------------------------------------------------------------
Multi-Family EFV................................         153,985      $1,958,991      $3,534,722     $11,782,405
Commercial EFV..................................          27,174       2,748,456         623,778       2,079,259
Industrial/Large Other Curb Valve...............          40,955      10,240,363         626,747       6,267,467
Notification and Recordkeeping..................  ..............  ..............         181,899         181,899
                                                 ---------------------------------------------------------------
    Total.......................................         222,114      14,947,810       4,967,145      20,311,030
----------------------------------------------------------------------------------------------------------------

    Additional unquantified benefit areas include:
---------------------------------------------------------------------------

    \9\ Benefit and cost information is taken from the DIMP 
rulemaking analysis. No information is available to estimate the 
proportion of SFR service lines that are branched; PHMSA believes it 
to be very roughly in the range of 10%. The DIMP analysis used 
different estimates for the cost of an EFV and used the then-
prevailing USDOT values for injury prevention. Although DIMP did not 
cover branched SFR, benefits and costs were calculated as if they 
were, because there were no data available to create a more precise 
estimate.
    \10\ This category is defined by service characteristics (size, 
flow) for which a curb valve is more appropriate than an EFV. No 
data are available on customer classification within the category, 
though it likely includes larger MFR, commercial and industrial 
facilities, and other similar customers.
---------------------------------------------------------------------------

     Equity: Provides a fair and equal level of safety to 
members of society who do not live in single-family residences.
     Additional incident costs avoided for which no PHMSA 
incident data are available: Mitigates the consequences (death, injury, 
property damage) of incidents when customer piping or equipment is 
involved and thus the incident would not be reflected in PHMSA records.
     Additional incident costs which are not recorded in 
incident reports, including costs of evacuations, emergency response 
costs, and business downtime.
     Environmental externalities associated with methane 
release (discussed in Appendix).
     Peace of mind for operators and customers.
     Protection against seismic events and intentional 
tampering.

PHMSA requests public comments on methods and information sources that 
could be used to quantify and monetize these unquantified benefits.

C. Executive Order 13132: Federalism

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 (``Federalism''). PHMSA 
issues pipeline safety regulations applicable to interstate and 
intrastate pipelines. The requirements in this proposed rule apply to 
operators of distribution pipeline systems, primarily intrastate 
pipeline systems. Under 49 U.S.C. 60105, a state may regulate 
intrastate pipeline facility or intrastate pipeline transportation, 
after submitting a certification to PHMSA. Thus, state pipeline safety 
regulatory agencies with a valid certification on file with PHMSA will 
be the primary enforcer of the safety requirements proposed in this 
NPRM. Under 49 U.S.C. 60107, PHMSA provides grant money to 
participating states to carry out their pipeline safety enforcement 
programs. Although a few states choose not to participate in the 
natural gas pipeline safety grant program, every state has the option 
to participate. This grant money is used to defray additional costs 
incurred by enforcing the pipeline safety regulations.
    PHMSA has concluded this proposed rule does not include any 
regulation that: (1) Has substantial direct effects on states, 
relationships between the national government and the states, or 
distribution of power and responsibilities among various levels of 
government; (2) imposes substantial direct compliance costs on states 
and local governments; or (3) preempts state law. Therefore, the 
consultation and funding requirements of Executive Order 13132 (64 FR 
43255; August 10, 1999) do not apply.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an 
agency to review regulations to assess their impact on small entities, 
unless the agency determines that a rule is not expected to have a 
significant impact on a substantial number of small entities. This NPRM 
has been developed in accordance with Executive Order 13272 (``Proper 
Consideration of Small Entities in Agency Rulemaking'') and DOT's 
procedures and policies to promote

[[Page 41470]]

compliance with the Regulatory Flexibility Act to ensure that potential 
impacts of rules on small entities are properly considered.
    This NPRM proposes to require small and large gas pipeline 
operators to comply with the new EFV installation requirements. The 
Small Business Administration (SBA) criteria for defining a small 
entity in the natural gas pipeline distribution industry is one that 
employs less than 500 employees as specified in the North American 
Industry Classification System (NAICS) codes.
    PHMSA calculated the number of small businesses affected by 
reviewing annual reports submitted by gas pipeline operators and data 
provided by Dunn and Bradstreet. PHMSA estimated that of the 1,289 
operators who submitted an annual report to PHMSA on their gas 
distribution activities, 1,221, or 95 percent, of these natural gas 
operators are classified as being ``small business.'' The natural gas 
distribution industry does have a substantial number of small entities 
as defined by the SBA. However, we believe that this rule would not 
have a significant impact on small entities because the additional 
costs are minimal: approximately $30 per EFV installed and $55 per curb 
valve installed. Industry comments have described these additional 
costs as ``relatively minimal'' \11\ and the one-time cost is largely 
offset by incident cost avoidance over the 50-year lifetime of the 
valves. The notification and recordkeeping costs associated with the 
new notification requirement for optional EFV installation are 
estimated at $42 per firm annually, which is a minimal cost even for 
the smallest operators.
---------------------------------------------------------------------------

    \11\ PHMSA-2012-0086-0003, Comment by the American Gas 
Association, submitted July 17, 2012, pg. 2.
---------------------------------------------------------------------------

    Accordingly, the head of the agency certifies under Section 605(b) 
of the RFA that the proposed rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
PHMSA seeks comment on the Initial Regulatory Flexibility Analysis. A 
copy of the Initial Regulatory Flexibility Analysis has been placed in 
the docket.

E. Unfunded Mandates Reform Act of 1995

    This proposed rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It would not result in costs of 
$147.6 million, adjusted for inflation, or more in any one year to 
State, local, or tribal governments, in the aggregate, or to the 
private sector, and is the least burdensome alternative that achieves 
the objective of the proposed rule. Installation of EFVs and curb 
valves significantly protects the safety of the public and is 
technically and economically feasible.

F. National Environmental Policy Act

    PHMSA analyzed this NPRM in accordance with section 102(2)(c) of 
the National Environmental Policy Act (42 U.S.C. 4332), the Council on 
Environmental Quality regulations (40 CFR parts 1500 through 1508), and 
DOT Order 5610.1C, and has preliminarily determined that this action 
will not significantly affect the quality of the human environment. A 
preliminary environmental assessment of this NPRM is available in the 
docket, and PHMSA invites comment on the environmental impacts of this 
proposed rule.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13175 (``Consultation and 
Coordination with Indian Tribal Governments''). Because this NPRM does 
not have tribal implications and does not impose substantial direct 
compliance costs on Indian tribal governments, the funding and 
consultation requirements of Executive Order 13175 do not apply.

H. Executive Order 13211: Energy Supply, Distribution, or Use

    This proposed rule is not a ``significant energy action'' under 
Executive Order 13211 (Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use). It is not 
likely to have a significant adverse effect on supply, distribution, or 
energy use. The Office of Information and Regulatory Affairs has not 
designated this proposed rule as a significant energy action.

I. Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA is required to provide 
interested members of the public and affected agencies with an 
opportunity to comment on information collection and recordkeeping 
requests. As a result of the requirements proposed in this notice of 
proposed rulemaking, the following information collection impacts are 
expected:
Gas Distribution Annual Report Revision
    PHMSA is proposing to revise Sec.  192.383, to require the 
installation of EFVs beyond single family residences as currently 
required. Further, PHMSA is proposing to add Sec.  192.385 which would 
require the installation of manual service line shut-off valves. As a 
result, PHMSA wants to track the number of new installations related to 
these provisions on an annual basis. This will lead to changes to the 
Gas Distribution Annual Report which is contained in the currently 
approved information collection titled ``Annual Report for Gas 
Distribution Operators'' identified under OMB Control Number 2137-0629. 
PHMSA proposes to revise the Gas Distribution Annual report to collect 
the number of EFVs installed on multi-family dwellings and small 
commercial businesses and the number of manual service line shut-off 
valves installed. Currently, operators are required to submit the total 
number of excess flow valves installed on single-family residences and 
the total number of EFVs within their system. Therefore, PHMSA does not 
expect operators to experience an increase in burden beyond the burden 
currently estimated for the Gas Distribution Annual Report.
Customer Notification
    PHMSA proposes to revise Sec.  192.383 to require operators to 
notify customers of their right to request the installation of EFVs. 
PHMSA estimates that approximately half of the 6,184 operators 
categorized as either master meter operators or small LPG systems will 
be impacted, resulting in 3,092 operators. This estimate is based on 
the premise that only half of these operators have systems that can 
accommodate an EFV. PHMSA also estimates that 1,289 gas distribution 
operators will be impacted. Therefore PHMSA estimates a total impacted 
community of 4,381 (3,092 master meter/small LPG operators and 1,289 
gas distribution operators). PHMSA estimates that each impacted 
operator will take approximately 30 minutes per year to complete this 
notification and an additional 30 minutes per year to maintain the 
associated records. Therefore, PHMSA will request a new information 
collection to address these reporting and recordkeeping requirements.
    As a result of the changes listed above, PHMSA proposes to submit 
an information collection revision request as well as a new information 
collection request to OMB for approval based on the requirements in 
this proposed rule. These information collections are contained in the 
pipeline safety regulations, 49 CFR parts 190 through 199. The 
following information is provided for these information

[[Page 41471]]

collections: (1) Title of the information collection; (2) OMB control 
number; (3) Current expiration date; (4) Type of request; (5) Abstract 
of the information collection activity including a description of the 
changes applicable to the rulemaking action; (6) Description of 
affected public; (7) Estimate of total annual reporting and 
recordkeeping burden; and (8) Frequency of collection. The information 
collection burden for the following information collection will be 
requested as follows:
    1. Title: Annual Report for Gas Distribution Operators.
    OMB Control Number: 2137-0629.
    Current Expiration Date: May 31, 2018.
    Type of Request: Revision.
    Abstract: This information collection covers the collection of 
annual report data for information from Gas distribution pipeline 
operators for Incidents and Annual reports. This information collection 
will only be revised to reflect the amendment to the Gas Distribution 
Annual Report which will not result in a burden hour increase.
    Affected Public: Gas Distribution Pipeline Operators.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 1,440. (no change).
    Total Annual Burden Hours: 2,300. (no change).
    Frequency of Collection: Annual.
    2. Title: Customer Notifications for Installation of Excess Flow 
Valves.
    OMB Control Number: TBD.
    Current Expiration Date: Not Applicable.
    Type of Request: New Information Collection.
    Abstract: This new information collection will cover the reporting 
and recordkeeping requirements for gas pipeline operators associated 
with customer notifications pertaining to the installation of excess 
flow valves.
    Affected Public: Gas Pipeline Operators.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 4,381 responses.
    Total Annual Burden Hours: 4,381 hours.
    Frequency of Collection: On occasion.
    Requests for a copy of this information collection should be 
directed to Cameron Satterthwaite, Office of Pipeline Safety (PHP-30), 
Pipeline and Hazardous Materials Safety Administration (PHMSA), 2nd 
Floor, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, Telephone 
202-366-4595.

J. Privacy Act Statement

    Anyone is able to search the electronic form of all comments 
received for any dockets by the name of the individual submitting the 
comment (or signing the comment, if submitted on behalf of an 
association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477), or at http://www.regulations.gov.

K. Regulation Identifier Number

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN contained in the heading of 
this document may be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 192

    Excess flow valve installation, Excess flow valve performance 
standards, Pipeline safety, Service lines.

    In consideration of the foregoing, PHMSA proposes to amend 49 CFR 
part 192 as follows:

PART 192--TRANSPORTATION OF NATURAL AND OTHER GAS BY PIPELINE: 
MINIMUM FEDERAL SAFETY STANDARDS

0
1. The authority citation for part 192, as revised at 80 FR 12762 
(March 11, 2015), effective October 1, 2015, continues to read as 
follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60110, 
60113, 60116, 60118, and 60137, and 49 CFR 1.97.

0
2. In Sec.  192.381, the introductory text of paragraph (a) is revised 
to read as follows:

Sec.  192.381  Service lines: Excess flow valve performance standards.

    (a) Excess flow valves to be used on service lines that operate 
continuously throughout the year at a pressure not less than 10 p.s.i. 
(69 kPa) gage must be manufactured and tested by the manufacturer 
according to an industry specification, or the manufacturer's written 
specification, to ensure that each valve will:
* * * * *
0
3. Section 192.383 is revised to read as follows:

Sec.  192.383  Excess flow valve installation.

    (a) Definitions. As used in this section:
    Replaced service line means a gas service line where the fitting 
that connects the service line to the main is replaced or the piping 
connected to this fitting is replaced.
    Service line serving single-family residence (SFR) means a gas 
service line that begins at the fitting that connects the service line 
to the main and serves only one SFR.
    (b) Installation required. An excess flow valve (EFV) installation 
must comply with the performance standards in Sec.  192.381. After 
January 3, 2014, each operator must install an EFV on any new or 
replaced services line serving the following types of services before 
the line is activated:
    (1) A single service line to one SFR;
    (2) A branched service line to a SFR installed concurrently with 
the primary SFR service line (i.e., a single EFV may be installed to 
protect both service lines);
    (3) A branched service line to a SFR installed off a previously 
installed SFR service line that does not contain an EFV;
    (4) Multi-family residences with known customer loads not exceeding 
1,000 SCFH per service, at time of service installation based on 
installed meter capacity, and
    (5) A single, small commercial customer served by a single service 
line with a known customer load not exceeding 1,000 SCFH, at the time 
of meter installation, based on installed meter capacity.
    (c) Exceptions to excess flow valve installation requirement. An 
operator need not install an excess flow valve if one or more of the 
following conditions are present:
    (1) The service line does not operate at a pressure of 10 psig or 
greater throughout the
    year;
    (2) The operator has prior experience with contaminants in the gas 
stream that could interfere with the EFV's operation or cause loss of 
service to a customer;
    (3) An EFV could interfere with necessary operation or maintenance 
activities, such as blowing liquids from the line; or
    (4) An EFV meeting performance standards in Sec.  192.381 is not 
commercially available to the operator.
    (d) Customer's right to request an EFV. Existing service line 
customers, who desire an EFV on service lines not exceeding 1,000 SFCH 
and not meeting the conditions in paragraph (b) of this section, may 
request an EFV be installed on their service line. If a service line 
customer requests EFV installation, an operator must install the EFV at 
a mutually agreeable date. The appropriate State regulatory agency

[[Page 41472]]

determines whom and/or how the costs of the requested EFVs are 
distributed.
    (e) Operator notification of customers concerning EFV installation. 
Operators must notify customers of their right to request an EFV in the 
following manner:
    (1) Except as specified in paragraph (e)(2) of this section, each 
operator must provide written notification to the customer of their 
right to request the installation of an EFV within 90 days of the 
customer first receiving gas at a particular location.
    (2) Operators of master meter systems may continuously post a 
general notification in a prominent location frequented by customers.
    (f) Operator evidence of customer notification. Each operator must 
maintain a copy of the customer EFV notice for three years. This notice 
must be available for inspection by the Administrator or a State agency 
participating under 49 U.S.C. 60105 or 60106.
    (g) Reporting. Each operator must report the EFV measures detailed 
in the annual report required by Sec.  191.11 of this chapter.
0
4. Section 192.385 is added to subpart H to read as follows:

Sec.  192.385  Manual service line shut-off valve installation.

    (a) Definitions. As used in this section:
    Manual service line shut-off valve means a curb valve or other 
manually operated valve located near the service main or a common 
source of supply that is accessible to first responders and operator 
personnel to manually shut off gas flow to the service line in the 
event of an emergency.
    (b) The operator must install a manual service line shut-off valve 
for any new or replaced service line, with installed meter capacity 
exceeding 1,000 SCFH.
    (c) Manual service line shut-off valves for any new or replaced 
service line must be installed in such a way to allow accessibility 
during emergencies.

    Issued in Washington, DC, on July 7, 2015, under authority 
delegated in 49 CFR 1.97.
Jeffrey D. Wiese,
Associate Administrator for Pipeline Safety.
[FR Doc. 2015-17195 Filed 7-14-15; 8:45 am]
 BILLING CODE 4910-60-P