[Federal Register Volume 81, Number 199 (Friday, October 14, 2016)]
[Rules and Regulations]
[Pages 70987-71002]
[FR Doc No: 2016-24817]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 192

[Docket No. PHMSA-2011-0009; Amdt. No 192-121]
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: Final rule.

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SUMMARY: Excess flow valves (EFV), which are safety devices installed
on natural gas distribution pipelines to reduce the risk of accidents,
are currently required for new or replaced gas service lines servicing
single-family residences (SFR), as that phrase is defined in 49 CFR
192.383(a). This final rule makes changes to part 192 to expand this
requirement to include new or replaced branched service lines servicing
SFRs, multifamily residences, and small commercial entities consuming
gas volumes not exceeding 1,000 Standard Cubic Feet per Hour (SCFH).
PHMSA is also amending part 192 to require the use of either manual
service line shut-off valves (e.g., curb valves) or EFVs, if
appropriate, for new or replaced service lines with meter capacities
exceeding 1,000 SCFH. Lastly, this final rule requires operators to
notify customers of their right to request installation of an EFV on
service lines that are not being newly installed or replaced. PHMSA has
left the question of who bears the cost of installing EFVs on service
lines not being newly installed or replaced to the operator's rate-
setter.

DATES: This final rule is effective April 14, 2017.

FOR FURTHER INFORMATION CONTACT:
    Technical questions: Vincent Holohan, General Engineer, by
telephone at<PHONE_NUMBER> or by electronic mail at
<EMAIL_ADDRESS>    General information: Robert Jagger, Technical Writer, by telephone
at<PHONE_NUMBER> or by electronic mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Purpose of the Regulatory Action

    EFVs can reduce the risk of explosions in natural gas distribution
pipelines by shutting off unplanned, excessive gas flows. These events
are primarily the result of excavation damage to service lines that
occurs between the gas main and the customer's building. Based on the
comments to this rulemaking, PHMSA experience, and various studies,
PHMSA has determined that the safety benefits of expanding the use of
EFVs to new or entirely replaced distribution branch services (gas
service lines that begin at an existing service line or that are
installed concurrently with primary service lines but serve separate
residences), multifamily facilities, and small commercial facilities is
appropriate from a technical, economical, and operational feasibility
standpoint.

B. Summary of the Major Provisions of the Regulatory Action

    Pursuant to Section 22 of the Pipeline Safety, Regulatory
Certainty, and Job Creation Act of 2011, this final rule amends the
Federal pipeline safety regulations by adding four new categories of
service for which EFV installation will be required. These four new
categories are for new and entirely replaced services. The existing EFV
installation requirement for SFRs served by a single service line
remains unchanged. The new categories of service are as follows:
     Branched service lines to a SFR installed concurrently
with the primary SFR service line (a single EFV may be installed to
protect both lines);
     Branched service lines to a SFR installed off a previously
installed SFR service line that does not contain an EFV;

     Multifamily installations, including duplexes, triplexes,
fourplexes, and other small multifamily buildings (e.g., apartments,
condominiums) with known customer loads at time of service
installation, based on installed meter capacity, up to 1,000 SCFH per
service; \1\ and
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    \1\ The average single-family home uses about 200 standard cubic
feet of gas per day and individual apartment units use even less.
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     A single, small commercial customer served by a single
service line, with a known customer load at time of service
installation, based on installed meter capacity, of up to 1,000 SCFH
per service.
    Operators will be required to give all customers notice of the
option to request an EFV installation, except where such installation
is not required under Sec.  192.383(c) (i.e., where the service line
does not operate at a pressure of 10 psig or greater through the year,
the operator has experienced contaminants in the gas stream that could
interfere with EFV operation, an EFV could interfere with operation and
maintenance activities, or an EFV meeting performance standards in
Sec.  192.381 is not available).
    Finally, this final rule also amends the Federal pipeline safety
regulations by requiring curb valves, or EFVs, if appropriate, for
applications operating above 1,000 SCFH.

C. Costs and Benefits

    PHMSA estimates a total impacted community of 4,448 operators for
this rule (3,119 master meter/small LPG operators who will need to
comply with notification requirements and 1,329 natural gas
distribution operators who will need to install valves and comply with
notification requirements) and 222,114 service lines per year on
average. It is expected to generate safety benefits in the form of
reduced fatalities, injuries, lost product, and other property damage
from certain types of preventable incidents in gas distribution
pipelines. The overall benefits over a 50-year period were estimated at
the annual equivalent of $5.5 million per year versus $10.6 million in
compliance costs when calculated using a 7 percent discount rate. When
using a 3 percent discount rate, the total benefits of the rule were
estimated at $10.5 million while the costs were estimated at $12.0
million.

II. Background

A. Excess Flow Valves and Curb Valves

    An EFV is a mechanical safety device installed inside a natural gas
distribution service line between the street and residential meter. If
there is a significant increase in the flow of gas (e.g., due to a
damaged line), the EFV will ``trip'' or close to minimize the flow of
gas through the line and thus, the amount of gas escaping 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.
    Curb valves are installed below grade in a service line at or near
the property line with a protective curb box or standpipe for quick
subsurface access and are operated by use of a removable key or
specialized wrench.

B. The South Riding, VA, Incident

    On July 7, 1998, in South Riding, VA, an explosion stemming from a
residential service line resulted in one death and three injuries. It
is not known if the explosion occurred on a branched or non-branched
service line, but PHMSA believes that this final rule or PHMSA's
previous rule requiring EFVs on single lines serving SFRs \1\ would, at
a minimum, have mitigated the consequences of the explosion.
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    \1\ ``Pipeline Safety: Integrity Management Programs for Gas
Distribution Pipelines,'' 74 FR 63906 (December 4, 2009), RIN 2137-
AE15.
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    An investigation by the National Transportation Safety Board (NTSB)
found the explosion likely would not have occurred if an EFV had been
installed on the service line leading to this single-family home. As a
result of its investigation, on June 22, 2001, the NTSB issued Safety
Recommendation P-01-2, recommending that PHMSA ``require that EFVs be
installed in all new and renewed gas service lines, regardless of a
customer's classification (i.e., not just lines serving single-family
residences), when the operating conditions are compatible with readily
available valves.''

C. PHMSA's EFV Studies and Evaluation Report

    In December 2005, a multi-stakeholder group convened by PHMSA
published a report titled: ``Integrity Management for Gas Distribution:
Report of Phase I Investigations.'' \2\ The report recommended that
``[A]s part of its distribution integrity management plan, an operator
should consider the mitigative value of 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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    \2\ http://www.regulations.gov/contentStreamer?documentId=PHMSA-RSPA-2004-19854-0070&attachmentNumber=1&disposition=attachment&contentType=pdf
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    In an effort to study the possible benefits of expanding EFVs
beyond SFR applications, PHMSA began development of an Interim
Evaluation in early 2009. In June and August of that year, PHMSA held
public meetings on NTSB Recommendation P-01-2 with participants from
the following major stakeholder groups: 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.
    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 enacted in 2006,
other distribution lines, including those that served branched SFRs,
apartment buildings, other multi-residential dwellings, commercial
properties, and industrial service lines, were still not required to
use EFVs. These structures are susceptible to the same risks as SFR
service lines.
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    \3\ ``Pipeline Safety: Integrity Management Programs for Gas
Distribution Pipelines,'' December 4, 2009, (74 FR 63906) RIN 2137-
AE15.
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    PHMSA, already aware of this risk, issued a report in 2010 titled:
``Interim Evaluation: NTSB Recommendation P-01-2 Excess Flow Valves in
Applications Other Than Service Lines Serving One SFR'' (Interim
Evaluation),\4\ which studied the possible expansion of EFVs beyond
SFRs and the challenges involved with such expansion. The Interim
Evaluation also addressed other

practical alternatives, such as the use of manual isolation devices
(e.g., curb valves) to quickly cut off the uncontrolled flow of gas in
an emergency. The Interim Evaluation also identified challenges related
to the feasibility and practicality of the proposed solutions, as well
as significant cost and benefit factors. The report found that there
were no other devices or viable options to shut off gas supply quickly
when gas service lines ruptured.
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    \4\ The purpose of the Interim Evaluation was to respond to 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 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 Evaluation can be found at the following link:
http://www.regulations.gov/contentStreamer?documentId=PHMSA-2011-0009-0002&attachmentNumber=1&disposition=attachment&contentType=pdf.
The Interim Evaluation was finalized in 2015 based on comments to
the Interim Report.
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    The Evaluation \5\ was finalized in 2015, based on comments to the
Interim Evaluation, input from the meetings, and comments to the
Advance Notice of Proposed Rulemaking (ANPRM) discussed below. Both
reports can be found in Docket PHMSA-2011-0009.
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    \5\ http://www.regulations.gov/contentStreamer?documentId=PHMSA-2011-0009-0027&attachmentNumber=1&disposition=attachment&contentType=pdf.
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D. Advance Notice of Proposed Rulemaking

    PHMSA published an ANPRM for gas pipelines on November 25, 2011 (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 the costs of modifying the existing
regulatory requirements.
    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. Individual
operators raised concerns about expanded EFV use that were generally
related to logistics and implementation. Comments from municipalities
reflected a concern that State laws that were already in place could
conflict with new Federal requirements. The NTSB expressed strong
support for increased EFV use. The ANPRM comments collectively helped
PHMSA finalize the Interim Evaluation and determine what regulatory
changes to propose in the Notice of Proposed Rulemaking (NPRM).

E. Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

    In January of 2012, President Obama signed the Pipeline Safety,
Regulatory Certainty, and Job Creation Act of 2011, which required
PHMSA to study the possibility of expanding the use of EFVs beyond SFRs
and issue a final report to Congress on the evaluation of the NTSB's
recommendation on EFVs within 2 years after enactment of the Act. PHMSA
was also required to issue regulations, if appropriate, requiring the
use of EFVs or equivalent technology for new or entirely replaced gas
distribution branch services, multifamily facilities, and small
commercial facilities if economically, technically and operationally
feasible.

F. Notice of Proposed Rulemaking

    PHMSA published an NPRM (80 FR 41460) on July 15, 2015, asking the
public to comment on the findings of the finalized Evaluation and
PHMSA's proposals relating to the expanded use of EFVs in gas
distribution systems. PHMSA proposed a rule that would:
     Expand the EFV requirement to include new or replaced
branched service lines servicing SFRs, multifamily residences, and
small commercial entities consuming gas volumes not exceeding 1,000
SCFH;
     Require the use of manual service line shut-off valves
(e.g., curb valves) for new or replaced service lines with meter
capacities exceeding 1,000 SCFH;
     Require operators to notify customers of their right to
request installation of an EFV on existing service lines; and
     Leave the question of who bears the cost of installing
EFVs on service lines not being newly installed or replaced to the
operator, customer, and the appropriate State regulatory agency.

III. Gas Pipeline Advisory Committee

    The Technical Pipeline Safety Standards Committee (otherwise
commonly referred to as the Gas Pipeline Advisory Committee (GPAC)) is
a statutorily mandated advisory committee that advises PHMSA on
proposed safety standards, risk assessments, and safety policies for
natural gas pipelines. The GPAC was established under the Federal
Advisory Committee Act (Pub. L. 92-463, 5 U.S.C. App. 1-16) and the
Federal Pipeline Safety Statutes (49 U.S.C. Chap. 601). The committee
consists of 15 members, with membership equally divided among Federal
and State agencies, the regulated industry, and the public. The GPAC
advises PHMSA on the technical feasibility, practicability, and cost-
effectiveness of each proposed natural gas pipeline safety standard.
    On December 17, 2015, the GPAC met via a teleconference facilitated
by PHMSA at PHMSA's headquarters in Washington, DC. During the meeting,
the GPAC considered the specific regulatory proposals set forth in the
NPRM and discussed the various comments and edits to the NPRM proposed
by the pipeline industry and the public. The GPAC, in a unanimous 8-0
vote, found the NPRM, as published in the Federal Register, and the
Draft Regulatory Evaluation to be technically feasible, reasonable,
cost-effective, and practicable, if (1) changes were made relative to
Sec.  192.385 paragraphs (a) and (c), as amended during the meeting;
and (2) PHMSA incorporated the preamble language regarding
documentation of customer notification in Sec.  192.383(f).
    The GPAC recommended that PHMSA adopt the following changes:
     Curb Valve Accessibility for First Responders: PHMSA's
proposal in the NPRM stated that manual service line shut-off valves
are ``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 [. . .] in the event of an
emergency.'' The GPAC recommended that the final rule remove language
requiring proposed manual service line shut-off valves be accessible to
``first responders and operator personnel.'' Instead, the GPAC
suggested that the rule require such valves be ``accessible to operator
personnel or other personnel authorized by the operator.'' Several
members of the GPAC shared the concerns of industry commenters that
first responders would attempt to operate these manual service line
shut-off valves without operator consent or authorization, which might
lead to further or otherwise unforeseen consequences, including service
outages. By allowing such valves to be used by ``other personnel
authorized by the operator,'' operators could have discretion to ensure
that people familiar with the gas distribution systems in question be
qualified and authorized to operate manual service line shut-off
valves, which might include properly trained emergency responders.
     Curb Valve Maintenance: PHMSA's proposal in the NPRM
defined a manual service line shut-off valve as ``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.'' Several commenters noted that this
definition could cause confusion and the potential misinterpretation
that these curb valves would be subject to the maintenance requirements
at Sec.  192.747, which states that ``each valve, the use of which may
be necessary for the safe operation of a distribution system, must be
checked and serviced at intervals not exceeding 15 months but at least
once each calendar year.'' The GPAC recommended that manual service
line shut-off valves installed under section Sec.  192.385 be subject
to regular, but less prescriptive, scheduled maintenance, as documented
by the operator and consistent with the valve manufacturer's
specification.
     Documentation of Customer Notification: PHMSA's proposal
in the NPRM stated operators ``must provide written notification to the
customer of their right to request the installation of an EFV,'' and
that ``each operator must maintain a copy of the customer EFV notice
for three years.'' Several commenters noted that the term ``written''
seemed to exclude forms of electronic notification, and they also noted
that documenting individual notifications would be a costly, overly
burdensome task. The GPAC recommended that PHMSA incorporate language
from the NPRM preamble indicating broader options for stakeholder
communication, including statements printed on customer bills or
mailings or certain forms of electronic communication, including Web
site postings, would satisfy the customer notification requirement, and
that operators could keep a single copy of a particular method of
communication for purposes of fulfilling the documentation requirement.
    This final rule adopts all three recommendations of the GPAC.
Additional discussion of the amendments and associated comments of the
GPAC are provided below as a part of the comment discussion.

IV. Comment Summary and Discussion

    In the NPRM published July 15, 2015, PHMSA solicited public comment
on whether the proposed amendments would enhance the safety of natural
gas distribution systems, as well as the cost and benefit figures
associated with these proposals. PHMSA received 12 comments from a
broad array of stakeholders, including trade organizations, pipeline
operators, a government agency, and a public citizen safety watchdog
group. Below is a list of organizations that submitted comments in
response to the NPRM as well as the individual docket number for each
comment. All comments and corresponding rulemaking materials received
may be viewed on the www.regulations.gov Web site under docket ID
PHMSA-2011-0009.
    The majority of the comments specifically supported expanding EFV
installation requirements. Major concerns included whether first
responders should have access to curb valves, whether curb valves
required inspection and maintenance, and what methods were being
proposed for customer notification and documentation. Minor concerns
included EFV installation, the effective date of the rule, and
exceptions to EFV installation and notification. The substantive
comments received on the proposed regulations are organized by topic
and are discussed in the appropriate sections below, along with PHMSA's
responses.
Pipeline Operators (5)
     New Mexico Gas Company (NMG) PHMSA-2011-0009-0032
     Southwest Gas Corporation (SWG) PHMSA-2011-0009-0044
     NiSource (NS) PHMSA-2011-0009-0042
     Sierra Pacific Power Company (SPPC) PHMSA-2011-0009-0041
     MidAmerican Energy Company (MAE) PHMSA-2011-0009-0034
Trade Associations (5)
     American Gas Association (AGA) PHMSA-2011-0009-0037
     National Propane Gas Association (NPGA) PHMSA-2011-0009-
0045
     Gas Piping Technology Committee (GPTC) PHMSA-2011-0009-
0036
     American Public Gas Association (APGA) PHMSA-2011-0009-
0024
     Northeast Gas Association (NGA) PHMSA-2011-0009-0039
Government/Municipalities (1)
     National Transportation Safety Board (NTSB) PHMSA-2011-
0009-0035
Public Citizen Groups (1)
     Pipeline Safety Trust (PST) PHMSA-2011-0009-0040

A. Expansion of EFVs to Multifamily Residences, Branch Service Lines,
and Small Commercial Buildings

    Proposal: EFVs can reduce the risks of explosions by shutting off
unplanned, excessive gas flows, primarily from excavation damage to
service lines between gas mains and buildings. Gas distribution
pipeline operators are currently required to install EFVs in new and
replacement service lines supplying SFRs, per the final rule titled
``Integrity Management Programs for Gas Distribution Pipelines,''
issued on December 4, 2009. In the NPRM, PHMSA proposed adding four new
categories of service for which EFV installation will be required on
new and entirely replaced gas distribution services. These four new
categories are as follows:
     Branched service lines to an SFR installed concurrently
with the primary SFR service line (a single EFV may be installed to
protect both lines);
     Branched service lines to an SFR installed off a
previously installed SFR service line that does not contain an EFV;
     Multifamily installations, including duplexes, triplexes,
fourplexes, and other small multifamily buildings (e.g., apartments,
condominiums) with known customer loads at time of service
installation, based on installed meter capacity, up to 1,000 SCFH per
service; and
     A single, small commercial customer, served by a single
service line, with known customer load at time of service installation,
based on installed meter capacity, up to 1,000 SCFH per service.

    Comments: The majority of the commenters from trade associations,
industry, citizen groups, and government entities explicitly supported
the expanded use of EFVs in all categories and recognized the benefits
of their use. The NTSB was ``pleased that PHMSA is now proposing to
expand the requirements for installing EFVs'' and understood ``that the
expanded coverage is based on a comprehensive examination of the
practical operating limits of EFVs and comments on the ANPRM.'' The
NTSB stated that it ``supports the measures proposed in the NPRM and
believes that they will improve the safety of natural gas distribution
pipeline systems.'' The PST noted the publication ``fulfill[s] the
NTSB's recommendation from 2001 to its full scope,'' and they
``join[ed] with the NTSB in supporting this proposed expansion.''
    Industry trade associations, such as the AGA, which represents more
than 200 local energy companies throughout the United States and
provides gas to 94 percent of U.S. customers, stated in their comments
that they and ``their member utilities completely support expanding EFV
installation to multifamily residential service lines and small
commercial services.'' The APGA, the national, non-profit association
of publicly owned natural gas distribution

systems with over 700 members serving 37 States, also supported the
expansion of EFVs, stating that ``EFVs are the one tool that
distribution operators can use to reduce the risk posed when natural
gas service lines are ruptured by excavation.'' The APGA also noted
that ``in written comments submitted in response to PHMSA's ANPRM
published November 25, 2011, APGA and other commenters suggested EFV
installation requirements virtually identical to what PHMSA has
proposed,'' and ``commend[ed] PHMSA for adopting APGA's
recommendation.''
    NMGC ``commend[ed] and support[ed] expanding the use of excess flow
valves to new and fully replaced branch services, small multifamily
facilities, and small commercial facilities where economically,
technically, and operationally feasible.'' SWG ``support[ed] the
practical and reasonable expansion of EFVs to new and fully replaced
service lines beyond single family residential applications,'' in part
``evident by its EFV installation policy and number of EFVs installed
[on its existing system].'' Likewise, the NGA ``support[ed] PHMSA's
proposal to expand the use of excess flow valves in gas distribution
services for newly constructed applications other than single-family
residences and when existing services are excavated or replaced,''
recognizing that ``installing EFVs, under conditions where they are
effective, when new services are installed, or existing services are
exposed, repaired or replaced, is a cost-effective measure to improve
pipeline safety.'' The NGA also noted that it ``supported this proposal
in its initial comments to the advanced notice of proposed rulemaking
related to this issue in 2012.''
    PHMSA Response: PHMSA has been attempting to address issues
involving the broad installation of EFVs since at least 1990, and the
NTSB has issued several recommendations to PHMSA and the regulated
industry regarding the installation of EFVs on particular services as
far back as the 1970s. NTSB Recommendation P-01-2, which asks PHMSA to
``require that excess flow valves be installed in all new and renewed
gas service lines, regardless of a customer's classification, when the
operating conditions are compatible with readily available valves,'' is
one of PHMSA's oldest, unclosed NTSB recommendations.
    Prior attempts to require the installation of EFVs on certain gas
distribution services were not supported by both industry and State
pipeline safety partners; for years, EFVs were perceived as unreliable,
costly pieces of equipment that might accidentally close and interfere
with normal service, interfere with maintenance activities, or be
difficult to size and use at varying line pressures. Further, in the
Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006,
Congress provided PHMSA with a mandate to focus its resources on
requiring EFV installation on service lines serving single-family
residences as part of PHMSA's gas distribution integrity management
program (DIMP) rulemaking. Following the issuance of the DIMP
rulemaking and the EFV regulations in 2009, EFVs became more
technologically feasible and cost-effective to a point where it became
a realistic possibility for PHMSA to address fully the NTSB
recommendation. PHMSA performed several studies and surveys to evaluate
the feasibility of its position on high-volume EFVs and used its
experience in the prior EFV rulemaking to assist in formulating this
proposal. PHMSA is pleased that there is now such widespread support,
both from industry and public groups, for expanding the installation of
EFVs beyond SFRs. Accordingly, this final rule amends the Federal
Pipeline Safety Regulations by adding the proposed four new categories
of service to require EFV installation on branched service lines (both
branched lines to SFRs installed concurrently with the primary SFR
service line and branched lines to SFRs installed off a previously
installed SFR service lines not containing an EFV), lines serving
multifamily installations, and lines serving small commercial and
industrial customers.

B. Curb Valve Accessibility to First Responders

    Proposal: In the NPRM, PHMSA proposed requiring operators to
install curb valves for applications that operate above 1,000 SCFH, are
not suitable for EFV installation, and do not meet the exemptions in
the existing Sec.  192.383. Curb valves are the most feasible
alternative to EFVs in locations that exceed 1,000 SCFH or have other
issues that prevent EFV use. Although they cannot be operated
instantaneously like EFVs, curb valves can still mitigate the effects
of gas line explosions and are an effective safety measure. Therefore,
PHMSA proposed that any curb valves installed under this section be
accessible to first responders. PHMSA's experience indicates that,
frequently, first responders arrive at the scene of an incident before
operator personnel do. If first responders have access to a curb valve
during an emergency and can operate it, the valve can be closed to
mitigate further consequences.
    Comments: The NTSB was pleased to note that PHMSA's proposal to
require that operators ``install a manual service line shut-off valve
on new or replaced service lines in such a manner that emergency
personnel can access the valve [. . .] goes beyond the original intent
of [the NTSB's] recommendation, to further ensure safety.'' The PST
joined the NTSB in supporting this measure.
    Several of the commenters representing trade associations and
operators supported the use of curb valves where EFVs are not feasible
but strongly opposed requiring that curb valves always be accessible to
first responders. These commenters generally indicated that it should
be the operator's responsibility to operate these select portions of
gas distribution systems and that it should be up to the operator's
discretion to allow other personnel to operate these valves, if needed.
Certain operators noted the ``Pipeline Emergencies'' training manual, a
document developed by a team of respected emergency response and
industry experts in partnership with the National Association of Fire
Marshals and PHMSA, states that emergency responders should consult the
local gas company to determine local procedures for fire department use
of curb valves. The AGA indicated there are a few unique situations
where operators have properly trained first responders to operate curb
valves, but such a practice is not followed by most utilities. Certain
industry operators, including the SPPC, commented that they
specifically train first responders in their service territories, for
safety reasons, not to manually shut off gas flows. If manual service
line shut-off valves are accessible to first responders, first
responders may operate the wrong valve, may not have the proper
equipment to operate the valve, or may incorrectly operate the valve.
    Operators and trade associations also asserted that, given the
complexity of gas distribution systems, emergency shut-off valves
should only be operated by operator-qualified personnel who are
familiar with the specific gas distribution system in question. NS
suggested that, as operators have engineering records indicating the
location of all valves and which ones they control, operator personnel
can verify the location and purpose of a valve, thereby eliminating the
possibility of operating the wrong one and creating a greater hazard.
    The AGA noted there are many accounts of first responders who,

without the approval of the gas company, have inadvertently closed the
wrong valve or opened a valve that should have been closed. Several
operators argued that allowing first responders to operate manual
service line shut-off valves would create additional inconveniences or
safety risks, including loss of service to other customers or
additional property damage, injuries, or even deaths.
    Some operators indicated that giving first responders immediate
access to curb valves would distract them from their primary mission,
which is to perform safety assessments, make locations safe for people,
and conduct evacuations from areas of danger. Instead, they would
suddenly have responsibility for locating valves, determining which
valves should be closed, and closing them--tasks which could
potentially interfere with their primary mission and for which they
might not be trained.
    At the GPAC meeting, members of the committee expressed concerns
similar to those raised by industry regarding unauthorized or improper
manual service line shut-off valve usage. The committee debated whether
there could be a requirement authorizing first responders to operate
those particular valves or whether operators could give discretion to
certain first responders to operate valves. One question that was
brought up was whether eliminating ``first responders'' from the
proposed language (which would leave ``accessible to operator
personnel'' remaining) would unintentionally create a requirement that
would make manual service line shut-off valves accessible to only
company personnel. The committee eventually suggested revising the
paragraph by striking the reference to first responders and inserting
``other personnel authorized by the operator.'' The committee believed
this would give operators the primacy they sought for operating their
own distribution systems while, at the same time, making the valves
accessible and usable by non-operator personnel with the operator's
consent.
    PHMSA Response: PHMSA disagrees with those commenters who argued
that curb valves should not be accessible to first responders. Many
comments PHMSA received seemed to equate valve accessibility with
authority or expectation to operate those valves without consent. PHMSA
is in no way implying that first responders should have complete
autonomy in deciding whether to operate valves on a given gas
distribution system.
    In PHMSA's experience, there have been accidents where the
consequences have grown due to operator delays in shutting off curb
valves. As a part of an operator's regular liaison with first
responders, operators can, if they wish, train first responders to use
curb valves properly through regular exercises and communications.
Further, if the valve cover plate is clearly marked, there should not
be any confusion regarding the operation of the valve in an emergency.
However, PHMSA is not advocating the unauthorized operation of these
valves. Unless they believe there is imminent threat to human life or
extensive property damage, first responders should not operate curb
valves without operator input or consent.
    In this final rule, PHMSA is adopting the language recommended by
the GPAC, which would make curb valves accessible to operators and
other personnel authorized by the operator to manually shut off gas
flow, if needed, in the event of an emergency. PHMSA appreciates the
work of the GPAC in proposing a consensus solution that enables first
responders, if qualified and authorized, to operate valves if needed,
yet retains the operators' right to make decisions regarding the
operation of their own systems.

C. Curb Valve Maintenance

    Proposal: In its NPRM, PHMSA proposed requiring operators to
install curb valves for applications that operate above 1,000 SCFH, are
not suitable for EFV installation, and do not meet the exemptions in
the existing Sec.  192.383. Curb valves are the most feasible
alternative to EFVs in locations that exceed 1,000 SCFH or have other
issues that prevent EFV use. Although they cannot be operated
instantaneously like EFVs, curb valves can still mitigate the effects
of gas line explosions and are an important safety measure. Under the
proposed amendment to Sec.  192.385(c), manual service line shut-off
valves for any new or replaced service line must be installed in such a
way as to allow accessibility during emergencies.
    Comments: Just as it supported the proposal to ensure the
accessibility of curb valves to first responders, the NTSB also
supported this proposal. Comments from industry and trade associations,
however, were unified in their concern that this requirement would
create confusion regarding maintenance requirements based on earlier
PHMSA interpretations.
    Specifically, operators noted that the addition of Sec.  192.385,
as proposed in the NPRM, might lead to the mistaken inference that
manual service line shut-off valves would be subject to the valve
maintenance requirements set forth in Sec.  192.747, ``Valve
maintenance: Distribution systems.'' The AGA, NMGC, SWG, and APGA all
noted that PHMSA has issued many letters of interpretation affirming
that Sec.  192.747 does not apply to curb valves, but the proposed
Sec.  192.385 could be misconstrued to require such annual inspections.
The AGA and NMGC support PHMSA's historical position that manual curb
valves are not considered a ``critical valve'' for inspection purposes,
suggesting that if these valves were to be designated as critical
valves, operators would have to hire and train a significantly larger
staff to inspect and maintain these valves, which would significantly
increase operating costs and impose an administrative burden. The AGA
and APGA noted that if it was PHMSA's intent to change its position and
require annual inspections on these manual curb valves, this is not
indicated in the NPRM, the estimated cost of the rule, or the estimated
paperwork burden. Operators suggested PHMSA clearly state in the final
rule that curb valves installed under this proposal would not be
subject to the requirements at Sec.  192.747.
    At the GPAC meeting, members of the committee discussed this
proposal and whether these valves should be inspected and maintained
according to the requirements at Sec.  192.747. Several members agreed
that inspecting and maintaining these valves would be an important
safety measure, although several suggested that requiring these valves
to be inspected and maintained would require an increase in staffing
and operator qualification.
    Other members of the committee expressed concerns about operating
these valves for inspection purposes, arguing that testing curb valves
could knock out service in areas if they were operated improperly, and
that testing could potentially present more risk than reward. Members
of the committee also agreed that requiring annual inspection and
maintenance of these valves would be unreasonable and perhaps
unnecessary. Some suggested that if these valves were to be inspected
and maintained, then perhaps those requirements could be tied to
existing maintenance activities, such as leak surveys and patrolling,
meter-change programs, or other times when service lines would be shut
off.
    Ultimately, the committee suggested requiring valves installed
under this section to be subject to regularly scheduled and documented
maintenance consistent with the valve manufacturer's specifications.
While some GPAC members expressed concern

that valve manufacturers might specify overly stringent inspection and
maintenance intervals for particular curb valves, other GPAC members
noted that manufacturer specifications are an important part of the
industry's operation and maintenance considerations.
    PHMSA Response: PHMSA believes that curb valves installed under
this section must be accessible (e.g., clear of debris) and
occasionally operated to ensure they are working properly. A curb valve
does not provide any safety benefit if it is inoperable. Therefore, to
ensure the safe operation of a particular gas distribution system, it
is imperative that these valves function as intended. PHMSA concluded
that the burden of inspecting and maintaining these valves would be
minimal, as operator personnel can meet these requirements by simply
ensuring the valves are free of debris that could prevent operation and
by ensuring the valves are able to turn and operate. Further, these
requirements can be quickly performed and will not be an undue burden
on operators, as operators can choose to coordinate them with other
activities, such as leak surveys, patrolling, meter-change programs, as
well as other actions where service would be shut off and properly
qualified personnel are present.\6\ PHMSA also agrees with the GPAC
discussion regarding manufacturer specifications. Not only are
manufacturer specifications important to consider in the context of
operating a safe gas transportation system, but market forces typically
ensure reasonable operation and maintenance standards.
---------------------------------------------------------------------------

    \6\ Nonetheless, if there is minimal increase in time spent on
the order of 5 minutes per visit for curb valve maintenance, PHMSA
estimates costs would be approximately $113,416 annually for an
estimated 40,955 curb valves per year based on a fully loaded hourly
wage rate for natural gas distribution meter readers ($33.23 per
hour per Bureau of Labor Statistics information (http://www.bls.gov/oes/current/oes435041.htm) and a total of 3,413 hours.
---------------------------------------------------------------------------

    PHMSA appreciates the work of the GPAC in debating this proposal
and chooses to adopt the language the GPAC recommended, as the
amendment strikes a good balance between limiting any potential burden
imposed on operators and performing necessary activities to ensure
operability and safety. Therefore, the final rule amends the Federal
Pipeline Safety Regulations to require that manual service shut-off
valves installed under this section be subject to regular scheduled
maintenance as documented by the operator and consistent with the valve
manufacturer's specifications.

D. Customer Notification

    Proposal: PHMSA proposed in the NPRM that operators must notify
customers of their right to request the installation of EFVs.
Specifically, 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.
Operators of master-meter systems may continually post a general
notification in a prominent location frequented by customers.
    Comments: PHMSA received several comments on the proposed
notification requirement regarding the frequency of notification,
method of notification, notification content, and the persons who
should receive notification. The NTSB was ``pleased that PHMSA is
proposing to require the operator to inform customers of their right to
request an EFV be installed on an existing service line,'' and the PST
joined the NTSB in that support. Operators and trade associations
nearly universally supported notifying all existing customers of their
right to request an EFV through broad communication methods rather than
the proposed individual, dedicated notification method, which those
commenters argued would have created a significant administrative
burden.
    Some commenters questioned the effectiveness of the requirement for
notification to customers within 90 days of new service. The APGA felt
it was unclear what was meant by ``notification must occur within 90
days of the customer first receiving gas at a particular location.''
This could be interpreted to apply when the operator changed the name
of the person to whom it sends gas bills. This could also be
interpreted not to require notification of existing customers who have
been receiving gas for more than 90 days. MAE noted it appears the
intent studied in the Evaluation was for a single annual notification
to all customers and customer classes, based on a 1-hour level of
burden. Several operators, including MAE and SPPC, as well as trade
organizations, argued that establishing a 90-day requirement per
customer would cause a significant increase in costs, documentation
efforts, and a tangible administrative burden. MAE concurs with the
idea of notifying owners of the option for an EFV and its potential
benefits but believes this could be done with a new customer packet
that could be acted upon by customers who want to initiate
installation. This could then be inspected as a part of the public
awareness program.
    Many operators and trade associations suggested that notifying all
existing customers through a broad notification, such as ``bill
stuffers,'' ``new customer'' packets, and Web site postings, would be a
better use of operator resources and provide greater benefits. SWG
noted that allowing operators to provide EFV notification through broad
means would be consistent with the way PHMSA proposed the notification
requirement for master-meter operators. Further, the AGA mentioned that
the NPRM's ``Section-by-Section'' analysis indicated PHMSA was open to
other forms of notification, such as a printed statement on a customer
bill or mailings, but that was not evident in the actual proposed
regulatory text. Members of the GPAC echoed this statement when the
committee meeting was held and wanted PHMSA to clarify which methods of
notification were acceptable. The AGA suggested that given the number
of customers that have migrated to online billing and have opted to
receive notifications electronically from their natural gas service
provider, operators should be able to satisfy the notification
requirement through electronic notifications to customers, postings on
the company's Web site, and other forms of electronic communications.
Satisfying the proposed requirement through these methods as well as
traditional communications would allow effective communication at a
lower cost and in a more efficient manner. The AGA urged PHMSA to make
it clear in the final rule that individual communications to each
customer would not be required, and that an annual general EFV
communication would suffice. The APGA noted that, as many operators may
elect to use bill stuffers to notify all customers about EFVs, PHMSA
should allow, as an alternative to notification within 90 days of a
customer receiving gas, operators to notify all customers annually of
their right to request an EFV. For many APGA members, this would be the
least administratively burdensome method of notifying customers and
have the added benefit of providing customers who may have overlooked
the original notice with additional opportunities to choose to have an
EFV installed on their service lines.
    Several commenters had miscellaneous concerns on what the customer
notification should contain. SPPC suggested providing a description of
EFVs and their safety benefits as well as advice on how to request one,
a notification that could be inspected as part of an operator's public
awareness

program. The AGA recommended that PHMSA require operators include
general information in their public communications on the cost
associated with retrofitting an existing service line to accommodate an
EFV. NS suggested PHMSA adapt and incorporate language similar to that
issued in the 1998 EFV customer notification rule, including language
discussing the potential safety benefits, a description of installation
and replacement costs, and an explanation of when a requested EFV would
be installed.
    PHMSA Response: PHMSA appreciates the comments received on this
topic and the industry's support for a broad annual notification
requirement that would provide customers with important safety
information. When outlining the proposal in the NPRM, PHMSA did not
intend to suggest that customer EFV notifications needed to be non-
electronic or otherwise individually carried out. PHMSA has no
objection to the method by which operators notify their customers as
long as the operator can be sure of reaching all customers who have a
right to request an EFV. Therefore, a combination of methods, including
Internet Web site postings, bill stuffers, new customer packets,
statements on billing materials, et cetera, can be used to notify all
customers. PHMSA has determined that, as many of the commenter-proposed
methods would theoretically notify, on a regular basis, all customers
about their potential right to request an EFV, a broad, electronic
method of communication would meet the intent of the regulation and be
acceptable.
    PHMSA has also determined that, as operators appear to be willing
to notify all existing customers about their potential right to request
an EFV, the specific 90-day customer notification window for new
services is unnecessary. PHMSA has removed this language from the final
regulatory text. A broad notification to all customers will also
address any concerns about reaching customers who are not eligible for
EFV installation or who have already had EFVs installed.
    As for the specific content of a notification, PHMSA has determined
it would be beneficial to include language that was previously required
in the 1998 EFV notification rule, especially considering that
operators would already be familiar with the previous requirements. In
line with comments from SPPC, AGA, and NS, PHMSA will require that
operators include general information on the cost associated with EFV
installation, the potential safety benefits that may be derived from
installing an EFV, and conditions for installation. The operator may
choose how to word the specific information as long as they provide
sufficient information to give customers a rational basis for deciding
whether they want to request an EFV installation. The notification
should also be written in plain language.

E. Customer Documentation

    Proposal: PHMSA proposed in the NPRM that each operator must
maintain a copy of the customer EFV notice for 3 years. This notice
must be available during PHMSA inspections or State inspections
conducted under a pipeline safety program certified or approved by
PHMSA under 49 U.S.C. 60105 or 60106.
    Comments: The majority of the comments submitted by industry and
trade associations were an extension of the concerns regarding customer
notification and focused on the idea that documenting individual
notifications would be a major undertaking and a poor use of resources.
While many operators and trade associations seemed to agree that using
and documenting broad methods of communications (e.g., statements
printed on customer bills, mailings, or electronic Web pages) would be
reasonable, there were some differing opinions on how notifications
should be documented.
    The AGA recommended that the final rule allow retention of a single
copy of any notice, accompanied by a listing of the customers who
received the mailing, or by documenting the electronic communication
itself. The APGA noted that in the proposed rule's preamble, PHMSA
stated that evidence of notification could include such items as a
statement printed on customer bills or mailing. The APGA further noted
that PHMSA did not propose to require operators to keep records showing
that individual customers had been notified. SWG stated that while the
section-by-section analysis indicated that operator evidence of
notification could include such items as a statement printed on
customer bills or mailings, the proposed regulatory text did not
include such language.
    Some operators and trade associations discussed other issues
pertaining to the 3-year recordkeeping requirement. SPPC and NGA noted
that customer properties with frequent turnover would have multiple
records for the same address that would need to be maintained and
sorted for a period that could extend beyond the 3 years required by
the regulations. The NPGA argued that PHMSA's recordkeeping requirement
presented a greater burden than estimated. For large liquefied
petroleum gas (LPG) operators, it would be a considerable clerical task
to collect and review all EFV installation notifications to maintain a
record spanning 3 years. The NPGA suggested that PHMSA permit the
recordkeeping as an option rather than a requirement, which would allow
LPG operators to choose best practices for their businesses and
customers.
    PHMSA Response: PHMSA determined that several of the concerns
raised by commenters in this section could be addressed through
clarifying the proposed language and through revisions to the customer
notification method.
    It was not PHMSA's intent to suggest that operators would need to
transmit and document individual notifications to eligible customers.
As a few of the commenters pointed out, PHMSA had indicated that a
statement printed on customer bills or mailings would suffice as
evidence for customer notification, but this language and intent was
not incorporated into the proposed regulatory text. As PHMSA is
allowing operators to notify customers through a broad range of
electronic and traditional communications, the agency will also allow
operators to retain a copy of the broad annual notification or
notifications they are using to communicate with customers their right
to request an EFV. In line with the 2008 Federal Pipeline Safety
Regulations regarding operator evidence of customer notification,
operators will be required to make a copy of the notice currently in
use available during PHMSA inspections or inspections conducted under a
program certified or approved by PHMSA under 49 U.S.C. 60105 or 60106
without any further recordkeeping requirement or timeframe.

F. Installation Flexibility

    Proposal: PHMSA proposed in the NPRM that operators must install a
manual service line shut-off valve for any new or replaced service line
with an installed meter capacity exceeding 1,000 SCFH.
    Comments: Overall, operators and trade associations supported
installing curb valves where EFVs are not feasible due to operational
concerns. However, many operators and trade associations noted that the
language, as proposed, did not allow operators flexibility for
installing EFVs where possible on lines operating at greater than 1,000
SCFH and also might require operators to install both an EFV and a
manual service line shut-off valve on the same line.

    Several operators and trade associations, including SPPC, NMGC,
AGA, NS, MAE, APGA, and SWG, suggested PHMSA revise the proposed
regulatory text to give operators the option to install either an EFV
or a manual service line shut-off valve based on sound engineering
analysis and the availability of larger-format EFVs. The NMGC verified
with EFV manufacturers, such as GasBreaker Inc., that EFVs are
available and will meet the requirements necessary for operating on
single-family residences above 1,000 SCFH. NS saw an opportunity to
encourage operators to install EFVs on loads in excess of 1,000 SCFH,
as NS has had success with installing EFVs in service lines for loads
greater than 1,000 SCFH. The APGA believed the technology of EFVs and
products available would continue to evolve, and in the future, some
operators may test and become comfortable installing EFVs on some
services operating above 1,000 SCFH. The APGA noted the rule should
state that an operator need not install a curb valve if the operator
installs an EFV on a service line instead. Further, SPPC noted that
this requirement should be flexible enough to ensure that operators can
account for increased loads in the future, such as being able to
install a curb valve on a new service line with an initial load less
than 1,000 SCFH but that might later exceed 1,000 SCFH so as to avoid
the additional cost of replacing an EFV with a curb valve in the
future.
    Additionally, NMGC, SWG, NGA, and AGA determined that under no
circumstances should operators be required to install both an EFV and a
manual service line shut-off valve on the same service line. The AGA
noted that, as currently proposed, the regulations would require both a
manual curb valve and an EFV on (1) any SFR operating at greater than
1,000 SCFH or (2) a non-SFR operating at greater than 1,000 SCFH where
an operator installed an EFV under DIMP. Further, as proposed, the rule
could prohibit further innovation on EFVs that might be able to operate
above 1,000 SCFH.
    The GPTC expressed a similar view on the issue, noting that the
rule, as proposed, would not give an operator sufficient flexibility to
use sound engineering practices to design an EFV on service lines with
loads greater than 1,000 SCFH, in lieu of a manual curb valve. In the
proposed Sec.  192.383(b)(4) and (5), PHMSA established a threshold of
1,000 SCFH customer load over which an EFV was not required. However,
there is no threshold limit of 1,000 SCFH for proposed Sec.
192.383(b)(1), (2), and (3). The result is that a large SFR or branch
to two large SFRs with a service line load greater than 1,000 SCFH
would have both an EFV and a curb valve, but a multifamily residence
with a service line load greater than 1,000 SCFH would require only an
emergency curb valve, even if an EFV were available and suited for the
application. The GPTC asked PHMSA to modify this section to allow
greater flexibility.
    PHMSA Response: PHMSA did not intend to require that operators
install both a curb valve and an EFV on the same service line and would
like to give operators the flexibility to choose the proper safety
valve. PHMSA has no objection to operators installing EFVs on lines
with capacities over 1,000 SCFH, as long as that decision is reached
through sound engineering analysis. To clarify, if an operator cannot
or chooses not to install an EFV on an applicable service line with
capacity over 1,000 SCFH, it must install a curb valve.
    PHMSA notes that it originally wanted to require operators install
EFVs on service lines with loads up to 5,000 SCFH, as PHMSA knows that
valves are available for these applications, and manufacturers have
indicated they have sold EFVs for these load sizes. PHMSA chose the
1,000 SCFH threshold, which was accepted by the GPAC, as a compromise
based on comments from industry. Having operators perform a sound
engineering analysis will allow PHMSA to verify operators are taking
into account maximum loads and the capabilities of EFVs, if available,
to handle those loads. An operator's engineering analysis for sizing an
EFV should be based on maximum expected load throughout the year,
including snap loads, critical supply applications, system
configuration, and future anticipated loads (e.g., when commercial
facilities in a shopping center change, gas loads would also change).
In many instances, operators size EFVs based on meter capacity at the
service. Operators must use caution in expanding EFV use to other
larger commercial and multifamily dwelling applications due to the
complexity of service line design and usage patterns.
    In response to SPPC's comment, PHMSA is not allowing manual valve
installation for loads below 1,000 SCFH, even when future anticipated
loads may exceed that threshold. In this final rule, PHMSA is allowing
operators to install EFVs in lieu of manual valves in instances where
loads exceed 1,000 SCFH. As operators already consider anticipated
design loads and work with distribution system designers to determine
proper system configurations and valve sizing when installing systems,
operators should be able to install appropriate valves for future
anticipated loads.
    PHMSA also considered the GPTC's comment. In the best professional
judgment of PHMSA's subject matter experts, a SFR service line combined
with a branch service to another SFR isn't known to exceed 1,000 SCFH,
and typical houses consume anywhere from 100-250 SCF per day. However,
commercial and industrial facilities can exceed 1,000 SCFH, and
therefore the threshold is needed. Accordingly, in this final rule,
PHMSA has amended the Federal Pipeline Safety Regulations at Sec.
192.385(b) to require that operators install either a manual shut-off
valve or, if possible, based on sound engineering analysis and
availability, an EFV on lines operating at capacities exceeding 1,000
SCFH.

G. Cost Recovery and Other Cost-Benefit Issues

    Proposal: In its NPRM, PHMSA proposed that existing service line
customers who desire an EFV on service lines not exceeding 1,000 SCFH
and not meeting one of the exceptions contained in paragraph (c) of
Sec.  192.383 may request an EFV on their service lines. If a service
line customer requests EFV installation, an operator must install the
EFV at a mutually agreeable date. The appropriate State regulatory
agency would determine who would bear the cost of installation and how
the cost would be distributed.
    Comments: Operators and trade associations were strongly opposed to
the final sentence in PHMSA's proposal that designated the appropriate
State regulatory agency as the entity that would determine who would
bear the cost of the requested EFV. Most of the comments questioned
whether PHMSA had the legal authority to make such a statement and
whether a State regulatory agency would be the appropriate authority
for all cases. Specifically, the AGA, APGA, and GPTC noted that PHMSA
lacked the jurisdiction to codify and regulate the manner by which
utilities handle charges to customers.
    The NPGA noted that PHMSA's proposal to permit State regulatory
authorities to determine what party is responsible for installation
costs when a customer requests installation of an EFV presents
particular concerns for LPG systems and businesses. PHMSA's deference
to State agencies would impose disproportionately negative effects on
operators of LPG systems compared to other utilities, since LPG
pipeline operators are not regulated in

the same manner as natural gas utilities. The NPGA asked that PHMSA
modify the proposal to assign the cost of EFV installation performed at
a customer's request to the customer itself, as LPG businesses are not
positioned to pass along additional costs to customers in the same
manner as locally regulated utilities.
    NS noted that in previous amendments to Sec.  192.383 (EFV customer
notification, Feb 3, 1998), the Research and Special Programs
Administration, PHMSA's predecessor agency, acknowledged that the cost
of installing an EFV on an existing line was to be the responsibility
of the customer. Therefore, if PHMSA wishes to address who is to pay
for the installation of EFVs on existing service lines, NS proposed
that PHMSA adopt its previous requirement that the service line
customer bear the cost. NS also believed this requirement would also be
best addressed under Sec.  192.383(e).
    The APGA was vehemently opposed to the proposed language stating
that the appropriate State regulatory agency would determine to whom
and how the costs of the requested EFVs would be distributed,
indicating that of the approximately 1,000 public gas utilities subject
to the Federal Pipeline Safety Regulations, only a few have a State
agency determining how the cost of gas service is distributed among
customers. Whereas State public utility commissions (PUC) typically
review and approve the rates charged by investor-owned and privately
owned operators (which represent less than 25 percent of distribution
operators regulated by PHMSA), rates for public distribution systems
are typically approved by the municipality, utility board, or similar
local oversight body. The APGA noted the preamble of the NPRM made
clear that PHMSA did not intend to regulate how EFV costs would be
recovered and did not believe it was PHMSA's intent to require public
gas distribution operators to become subject to PUC review for EFV cost
recovery. Rather, the APGA believed it was PHMSA's intent to ``leave
the determination of how the cost of installing an EFV at customer
request to the operator and whatever body approves the operator's gas
rates.''
    Apart from PHMSA's proposal for determining cost recovery, some
commenters discussed additional cost-benefit issues related to EFV
installation on existing service lines. The APGA noted that operators
should only be required to install EFVs if requesting customers also
agree to whatever cost-recovery mechanism has been included in the
operator's approved rates. The AGA, SWG, and NGA noted that the cost of
retrofitting an EFV on an existing service line could be significant,
with SWG adding that this cost was not included in PHMSA's cost-benefit
analysis. The NGA further indicated that offering customers the option
of installing EFVs on existing services not planned for replacement,
excavation, or repair was not a cost-effective safety measure, and
installing EFVs on existing services should be evaluated by each
operator as a part of its integrity management planning.
    MAE requested a further analysis of the value and costs of
installation, operations and maintenance, and leak rates on curb valves
to determine whether there are more cost-efficient methods of emergency
shut-off. A member of the GPAC also expressed concerns about PHMSA's
cost-benefit numbers related to curb valves, suggesting that PHMSA
reconsider including curb valve maintenance in the cost-benefit
analysis and further analyze whether the incidents PHMSA used when
examining the effectiveness and usefulness of curb valves were
applicable to the analysis. Specifically, the GPAC member questioned
whether, for the incidents PHMSA selected applicable to curb valves in
its analysis, a curb valve on the line would have actually prevented
fatalities, injuries, or property damage, noting that the narrative of
a few of the accidents indicated some of the fatalities and injuries
were actually caused by car crashes and not the subsequent gas
incidents.
    PHMSA Response: It was not PHMSA's intent in the proposal to
specifically delegate cost-recovery duties to State regulatory
agencies, especially where certain operators do not have their rates
set by these entities. In the Section-by-Section analysis of the NPRM,
PHMSA noted it ``has no jurisdiction concerning natural gas rates or
any costs incurred due to installation of an optional EFV at a
consumer's request.'' PHMSA was only trying to indicate that it would
defer to the existing rate-setting and cost-recovery structure under
which operators currently operate. Therefore, PHMSA has removed the
reference to ``State regulatory authority'' in the regulatory text
applicable to cost recovery and has inserted ``The operator's rate-
setter'' to reflect this intent.
    PHMSA understands that the cost of installing an EFV on an existing
line at the customer's request is more expensive than if the line were
new or being replaced due to excavation and additional labor costs and
determined it was not cost-effective to require the fitting of an EFV
on all existing services.
    A 2007 National Regulatory Research Institute (NRRI) study titled
``Survey on Excess Flow Valves: Installations, Cost, Operating
Performance, and Gas Operator Policy,'' suggests that customer-
initiated EFV installations are quite rare, even in locations where
they are currently allowed by local policy, and would not be a
circumstance operators would be dealing with in significant numbers.
However, without this provision, customers on existing lines without an
EFV would essentially have no option to install an EFV, even if they
highly valued the risk reduction that it provided and were willing to
pay the full installation cost. These foregone transactions would
represent deadweight loss. Although PHMSA determined that mandatory
installation on all existing lines would not be cost-effective due to
excavation and labor costs, some individual households might have a
high willingness-to-pay for EFVs due to differences in risk aversion,
rate of time preference, and other factors.
    Further, it is PHMSA's understanding that customers would typically
be required to pay for these installations. From an economic
standpoint, an EFV requested and paid for by a customer would actually
increase the overall net benefit of the final rule, as PHMSA can infer
from the customer's choice that they value the EFV's protection at a
level greater than the cost they pay.\7\ Therefore, PHMSA has chosen to
retain the right for existing customers to request an EFV installation
if they are eligible.
---------------------------------------------------------------------------

    \7\ For retrofits, the benefits per valve would be essentially
the same as calculated in the accompanying Regulatory Impact
Analysis (a range of $4 to $44 at a 7 percent rate, depending on the
customer type).
---------------------------------------------------------------------------

    As for the concern of whether applicable incidents were chosen to
analyze the costs and benefits for curb valves, PHMSA applied
reasonable filters to its data to choose appropriate and applicable
incidents for analysis but there can be some level of uncertainty in
such incident data. PHMSA is also aware of incidents that might have
been prevented by the use of a curb valve, but these incidents were
excluded from the analysis due to data limitations or for other
reasons.
    In light of this particular comment, however, PHMSA reexamined and
revised the incident set pertaining to curb valves in order to provide
a more conservative cost-benefit analysis. For some of the incidents in
question (e.g., where drivers crashed cars into meter sets), it is
unlikely a curb valve would

have been effective in preventing the incident following impact, and
these incidents were removed from the data set. The final Regulatory
Impact Analysis is available in the docket.
    PHMSA notes that because a curb valve can allow gas flow to be shut
off quickly, a curb valve could still be effective in mitigating the
consequences of these incidents by shortening their duration,
especially where property damage is concerned. Further, PHMSA's data is
limited and often does not indicate clearly whether fatalities, if not
caused by the initial impact, are due to injuries sustained during the
crash or by the subsequent pipeline incident. For example, quickly
shutting off the flow of gas at the site of an incident may be able to
save the life of someone who has been knocked unconscious or has been
otherwise incapacitated. Because of this, PHMSA still believes that
installing EFVs and curb valves on service lines can provide a tangible
safety benefit to the public and the environment.

H. Miscellaneous Comments

Effective Date
    Proposal: The NPRM proposed that each operator must install an EFV
on any new or replaced service line for the services listed in the
proposed Sec.  192.383(b) before those lines were activated and prior
to January 3, 2014.
    Comments: Several operators and trade associations, including AGA,
NS, and APGA, noted that the effective date for the proposed rule would
impose the installation requirement retroactively. These commenters
requested that operators be given at least 6 months to prepare for
complying with the rule, including time to establish cost allocation
with the appropriate rate-setter and to source the valves.
    PHMSA Response: This portion of the rule was drafted with the 2012
statutory mandate in mind and did not necessarily indicate a
retroactive requirement. PHMSA has revised the effective date in the
final rule to allow operators 6 months to comply.
Exceptions to the Right To Request an EFV
    Proposal: The NPRM proposed that operators need not install an EFV
if one or more of the following conditions were 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.
    Comments: The AGA and APGA noted that because of these exemptions,
operators should not be required to provide an individual notification
to customers of their right to request an EFV if it is not feasible to
install an EFV on that customer's service line. The APGA also noted
that if most operators chose to satisfy the notification requirement
through customer bills or other mass communication, every customer
would still receive notification, regardless of whether EFV
installation were impossible or impractical. The APGA also believed
that PHMSA should reconsider applying the proposed requirements for the
right to request an EFV and customer notification to master-meter
operators. As master-meter operators typically serve ``garden-style''
apartments, mobile home parks, universities, public housing, et cetera,
the ``customer'' is typically a renter and not an owner, which could
potentially cause confusion as to who has the right to request an EFV.
    The AGA and SPPC asked that PHMSA consider exempting service lines
that already had manual valves on them or lines where an operator might
expect the load to increase beyond 1,000 SCFH and would install a
manual valve instead.
    PHMSA Response: PHMSA noted that the AGA and APGA comments were
submitted under the assumption that PHMSA was requiring individual
communications to all customers. As the APGA noted, because PHMSA is
allowing broad and electronic communication methods regarding EFV
installation, all customers, regardless of their eligibility for EFV
installation, will be receiving a form of notice. Further, PHMSA has
determined that master-meter operators will largely be held to the same
standards as other operators as far as EFV installation is concerned.
    PHMSA does not wish to include any further exceptions to the ones
that were proposed. PHMSA is concerned that operators might interpret
the fact that a service line already has a manual valve to mean that an
EFV does not need to be installed. This would be an incorrect
assumption. Applicable new and replaced service lines with loads not
exceeding 1,000 SCFH must have EFVs installed on them. Moreover, as
PHMSA is allowing installation flexibility for lines operating above
1,000 SCFH, the agency believes it is unnecessary to provide a specific
exemption for installing an EFV when the line could be expected to
operate above 1,000 SCFH.
Definitions
    Comments: Several commenters requested definitions or clarification
for a few terms in the NPRM. Specifically, SPPC asked PHMSA to add a
definition of ``branch service line'' to Sec.  192.383(a). The APGA
noted that SFR is not defined in part 192 and that PHMSA should add it
to the definitions or spell out the term when used. The APGA also noted
that PHMSA does not define who the ``customer'' is whom the operator
must notify and who has the right to request an EFV. The APGA noted
that, in the preamble, PHMSA states that messages on bills would
satisfy the notification requirement, which appears to intend that the
customer is the person to whom the utility sends the gas bill. The APGA
urged PHMSA to clarify this definition if this is the case, as the term
``customer'' might also be interpreted to mean the consumer of the gas,
a resident at a rented property, or perhaps the owner of a property.
These could all be different people. The GPTC recommended adding a
reference to proposed Sec.  192.385(b) and (c) to refer back to Sec.
192.383 and PHMSA's definition of replaced service line. MAE
recommended PHMSA revise Sec.  192.381(a) to clarify whether EFVs are
required for systems that normally operate at 10 psig but that have
minimum design pressures of 5-6 psig for anticipated heavy-load
conditions.
    PHMSA Response: PHMSA has added a definition of ``branch service
line'' to the definitions paragraph of Sec.  192.383 and spelled out
``SFR'' the first time it is used.
    While PHMSA does not delineate who the ``customer'' is in the
regulatory text, the APGA is correct in that PHMSA intends the
``customer'' to be the person to whom the utility sends the gas bill.
    PHMSA declined to add a reference in proposed Sec.  192.385(b) and
(c) back to Sec.  192.383 regarding PHMSA's definition of a replaced
service line. PHMSA intends curb valves installed under Sec.  192.385
to be appropriate substitutes for EFVs and are not otherwise considered
manual valves within the distribution network.
    Regarding MAE's comment, the language indicating that EFVs are to
be used on service lines operating continuously throughout the year at
a pressure not less than 10 p.s.i. (69 kPa) gage has been in the
regulations since 1996. The only change that has been made since that
time is the removal of the term ``single-family'' from ``service
lines.'' PHMSA is aware, however, there

are service lines that experience pressure drops below 10 psig during
heavy loading conditions. These lines are not required to have EFVs
installed on them.
Editorial Comments
    Comments: NS suggested that proposed language concerning a mutually
agreeable installation date should be moved to proposed Sec.
192.383(e), which deals with notification requirements. The APGA was
not clear on what ``EFV measures'' the reporting requirement refers to.
The APGA suggested this is not a new reporting requirement but rather
refers to the existing EFV reporting requirements in Sec.  191.11 and
should either be deleted or clarified to make clear that it only
applies to operators that are required to file annual reports.
    PHMSA Response: PHMSA considered these changes and made edits to
the regulatory text where appropriate.
EFV Standard Development
    Comments: The GPTC noted that while it appreciated PHMSA's
reference to the GPTC and its work, it still sought to clarify that the
GPTC's Guide Material Appendix 192-8, which provides operators with
guidance for developing a distribution integrity management program and
compliance with certain sections of part 192, does not include
information on the selection, sizing, or installation of EFVs. They
noted that helpful guidance to assist operators in addressing EFV
performance, selection, and installation considerations is found in MSS
SP-115, ASTM F1802, and ASTM F2138. The GPTC also suggested that if
PHMSA wants specific standards to be developed, then PHMSA should
approach those organizations to develop such standards.
    The NGA commented that it did not believe that development of EFV
standards was needed and that the development of design considerations
would best be performed by the utilities themselves or by standards-
setting organizations, based on EFV manufacturer specifications
considering customer load, meter size, service pipe size, and
pressures.
    PHMSA Response: PHMSA solicited comments in the gas pipeline ANPRM
on whether standards should be developed for EFVs. In the NPRM, PHMSA
noted that it would not be incorporating by reference any new standards
for EFVs into the Pipeline Safety Regulations but might do so in the
future if the need arose.

V. Regulatory Notices and Analysis

A. Statutory/Legal Authority for This Rulemaking

    This final rule is published under the authority of the Federal
pipeline safety laws (49 U.S.C. 60101 et seq.). Section 60102 of title
49, U.S.C., authorizes the Secretary of Transportation to issue
regulations governing the 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

    This final rule is a non-significant regulatory action under
section 3(f) of Executive Order 12866 (58 FR 51735) and, therefore, was
not reviewed by the Office of Management and Budget. This final rule is
not significant under the Regulatory Policies and Procedures of the
Department of Transportation (44 FR 11034) because of substantial
stakeholder interest in pipeline safety.
    Executive Orders 12866 and 13563 require agencies regulate in the
most cost-effective manner, make a reasoned determination that the
benefits of the intended regulations justify its costs, and develop
regulations that impose the least burden on society. PHMSA is providing
the final Regulatory Impact Analysis (RIA) simultaneously with this
rule, and it is available in the docket. The final RIA does not address
the benefits and costs of the proposal to require operators to install
EFVs on branched service lines providing gas service to SFRs because
the benefits and costs of this proposal were addressed in the
regulatory impact analysis for a previous rulemaking.\8\ The final RIA
found that the estimated monetized benefits do not exceed the monetized
costs in all cases. For the requirement of installing EFVs on new or
replaced service lines providing gas service to multifamily residences,
the monetized costs exceeded monetized benefits, even when using lower-
bound cost estimates. PHMSA believes that the amendments are
nevertheless justified by 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's 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.'' December 4, 2009, (74 FR 63906) (RIN 2137-
AE15.
---------------------------------------------------------------------------

    PHMSA estimates a total impacted community of 4,448 operators for
this rule (3,119 master meter/small LPG operators who will need to
comply with notification requirements and 1,329 natural gas
distribution operators who will need to install valves and comply with
notification requirements) and 222,114 service lines per year on
average. PHMSA assumed that 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
annualized benefits of the rule are $5.5 million when discounted at 7
percent, while the total annualized costs are $10.6 million. At the 3
percent discount rate, the total benefits of the rule are $10.6
million, while the costs are $12.0 million.
    The following table summarizes the annualized benefits and costs of
this final rule:

  Table ES-1--Summary of Estimated Benefits and Costs ($ Millions) \1\
------------------------------------------------------------------------
        Customer category         Annualized benefit    Annualized cost
------------------------------------------------------------------------
Branched Line Single Family.....  See note..........  See note.
Multifamily Residence...........  1.0...............  6.2
Small Commercial................  1.6...............  1.1
Industrial/Other curb valve.....  3.0...............  3.0

All classifications:              Not estimated.....  0.3
 Notification & recordkeeping.
                                 ---------------------------------------
    Total.......................  5.5...............  10.6
------------------------------------------------------------------------
Note: Benefits and costs for branched SFR services accounted for in
  economic analysis of previous rulemaking (Distribution Integrity
  Management Program).
\1\ 50-year present value converted to annual equivalent using 7%
  discount rate.

    Additional unquantified benefit areas include:
     Equity: Provides a fair and equal level of safety to
members of society who do not live in SFRs;
     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 that are not recorded in
incident reports, including costs of evacuations, emergency response
costs, and business downtime;
     Environmental externalities associated with methane
releases (discussed in the RIA Appendix);
     Peace of mind for operators and customers; and
     Protection against seismic events and intentional
tampering.
    Executive Order 13563 is supplemental to and reaffirms the
principles, structures, and definitions governing regulatory review
that were established in Executive Order 12866, Regulatory Planning and
Review, of September 30, 1993. Additionally, Executive Order 13563
specifically requires agencies to: (1) Involve the public in the
regulatory process; (2) promote simplification and harmonization
through interagency coordination; (3) identify and consider regulatory
approaches that reduce burden and maintain flexibility; (4) ensure the
objectivity of any scientific or technological information used to
support regulatory action; and (5) consider how to best promote
retrospective analysis to modify, streamline, expand, or repeal
existing rules that are outmoded, ineffective, insufficient, or
excessively burdensome. When developing this rule, PHMSA involved the
public in the regulatory process in a variety of ways. Specifically,
PHMSA considered public comments based on the proposals in the NPRM,
addressed those comments in the docket, and discussed the proposals
with the members of the GPAC and any public representatives in
attendance.
    This final rule is expected to produce a safety benefit that
addresses a congressional mandate and a NTSB safety recommendation and
which can be implemented at relatively minor cost; similar regulations
have been effective when applied to single-family residences. Further,
industry has already shown a willingness to expand EFV applications,
recognizing that EFVs have the potential to avert high-cost, low-
probability events that, while absent in the dataset for multifamily
residences, can still occur.

C. Executive Order 13132: Federalism

    This final rule 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 rule apply to operators
of distribution pipeline systems, which are primarily intrastate
pipeline systems. Under 49 U.S.C. 60105, a State may regulate an
intrastate pipeline facility or intrastate pipeline transportation
after submitting a certification to PHMSA. Thus, State pipeline safety
regulatory agencies with valid certifications on file with PHMSA will
be the primary enforcers 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 final 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 (August 10, 1999; 64 FR
43255) 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 will not have a significant
impact on a substantial number of small entities. This final rule 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 compliance with the Regulatory
Flexibility Act to ensure that potential impacts of rules on small
entities are properly considered.
    This final rule requires gas pipeline operators to comply with the
new EFV installation requirements. The Small Business Administration
(SBA) criteria for defining a small business in the natural gas
pipeline distribution industry is one that employs less than 1000
employees as specified in the North American Industry Classification
System (NAICS) codes. The RFA defines ``small governmental
jurisdiction'' as the government of a city, county, town, township,
village, school district, or special district with a population less
than 50,000.
    To identify gas distribution operators affected by the proposed
requirements that are small businesses or small governmental
jurisdictions, PHMSA used information provided by Dun and Bradstreet.
Dun and Bradstreet provides PHMSA with estimates of small business
classifications based on SBA size standards for operators that file an
annual report, along with a flag for public sector entities that is
based on information such as entity name and NAICS code. These data
indicate that approximately 60 percent of affected operators are public
entities; among these, the share that are small governmental
jurisdictions is not known. Among the private sector entities,
approximately one-third are small entities according to the SBA size
definition for their NAICS code. The most common of these is NAICS

221210, natural gas distribution, for which the standard is 1,000
employees. Overall, while the number of small entities is not known
with precision, it appears to be substantial when considering gas
distribution operators that are small businesses or small governmental
jurisdictions, as well as the master meter and small LPG operators that
are presumed to be small entities.
    However, PHMSA determined that this rule does not have a
significant economic impact on a substantial number of small entities.
While the natural gas distribution industry includes many small
entities, including both small businesses and small governmental
jurisdictions, the impacts of the rule are clearly de minimus, both in
relation to operator revenues and to the utility rate-payers to whom
the incremental costs would ultimately be allocated. PHMSA's Regulatory
Flexibility Analysis, which reached this determination, is available in
the docket for this rulemaking.
    Accordingly, the head of the agency certifies under Section 605(b)
of the RFA that this final rule will not have a significant economic
impact on a substantial number of small entities because the additional
costs are minimal.

E. Unfunded Mandates Reform Act of 1995

    This final 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 final 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 final rule 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 1500-1508), and DOT
Order 5610.1C, and has determined that this action will not
significantly affect the quality of the human environment. An
environmental assessment of this final rule, which explains this
determination, is available in the docket.

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

    This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because this rule 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 final 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. Further, the Office of Information and Regulatory Affairs
has not designated this final 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 of this rulemaking, the
following information collection impacts are expected:
Gas Distribution Annual Report Revision
    PHMSA is revising Sec.  192.383 to require the installation of EFVs
on applications beyond SFRs that are currently required. Further, PHMSA
is adding 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 change the Gas Distribution Annual Report, which is
contained in the currently approved information collection, titled
``Annual Reports for Gas Distribution Operators,'' identified under OMB
Control Number 2137-0629. PHMSA is revising the Gas Distribution Annual
Report to collect the number of EFVs installed on multifamily 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 EFVs installed on SFRs and the total number of EFVs
within their systems. Therefore, PHMSA does not expect operators to
experience an increase in burden beyond that already incurred for the
Gas Distribution Annual Report. PHMSA has submitted an information
collection revision request to OIRA to cover the components of this
data collection. The request is under review and pending approval.
PHMSA will publish a subsequent notice in the Federal Register upon the
approval of this collection.
Customer Notification
    Section 192.383 of this final rule will require operators to notify
customers of their right to request the installation of EFVs. Operators
have multiple options for fulfilling this requirement, including adding
a short statement to customer bills, incorporating a public awareness
message on the company Web site, incorporating the notification on bill
stuffers or in new customer packets, and posting a notice in a
prominent location (for master-meter/small LPG operators). PHMSA
estimates that approximately half of the 6,237 operators categorized as
either master-meter operators or small LPG systems will be impacted,
resulting in 3,119 affected 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 1,329 gas distribution
operators will be impacted. Therefore, PHMSA estimates a total impacted
community of 4,448 (3,119 master-meter/small LPG operators and 1,329
gas distribution operators). PHMSA estimates that each impacted
operator will take approximately 1 hour per year to create and complete
this notification. PHMSA expects a vast majority of notifications to be
made electronically, and, as such, expects the recordkeeping of these
documents to be automatic and self-executing upon saving such
documents. Consequently, PHMSA expects there to be no additional burden
to the operator for saving the notifications for recordkeeping
purposes. PHMSA estimates the total annual cost of this provision at
$280,713 per year (4,448 operators * 1 hour/operator * $63.11/hour
\9\). PHMSA has submitted a new information collection request to OIRA
to cover the components of this data collection. The request is under
review and pending approval. PHMSA will publish a subsequent notice in
the Federal Register upon the approval of this collection.
---------------------------------------------------------------------------

    \9\ Bureau of Labor Statistics, Occupational Employment
Statistics, May 2015. Occupation code 13-041, industry code 221200.
http://www.bls.gov/oes/current/oes131041.htm.
---------------------------------------------------------------------------

    As a result of the changes listed above, PHMSA is submitting an

information collection revision request as well as a new information
collection request to OMB for approval based on the requirements in
this final rule. These information collections are contained in the
pipeline safety regulations, 49 CFR parts 190-199. The following
information is provided for these information 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 is requested as follows:

    1. Title: Annual Reports for Gas Distribution Operators.
    OMB Control Number: 2137-0629.
    Current Expiration Date: May 31, 2018.
    Type of Request: Revision.
    Abstract: This information covers the collection of annual report
data for gas distribution pipeline operators. This information
collection will only be revised to reflect the amendment to the Gas
Distribution Annual Report, which will allow operators to submit the
number of EFVs that are installed in multifamily dwellings and small
commercial businesses and the number of manual service line shut-off
valves installed. PHMSA does not expect this revision to result in a
burden-hour increase.
    Affected Public: Gas Pipeline Operators.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 1,446.
    Total Annual Burden Hours: 23,136.
    Frequency of Collection: On occasion.

    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 the requirement of operators to notify customers of their right to
request the installation of excess flow valves.
    Affected Public: Gas Pipeline Operators.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 4,448 responses.
    Total Annual Burden Hours: 4,448 hours.
    Frequency of Collection: On occasion.

    Requests for a copy of this information collection should be
directed to Angela Dow, 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

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.

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 is amending 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 continues to read as follows:

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

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

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

    (a) Excess flow valves (EFVs) 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:
    Branched service line means a gas service line that begins at the
existing service line or is installed concurrently with the primary
service line but serves a separate residence.
    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 means a gas service
line that begins at the fitting that connects the service line to the
main and serves only one single-family residence (SFR).
    (b) Installation required. An EFV installation must comply with the
performance standards in Sec.  192.381. After April 17, 2016, each
operator must install an EFV on any new or replaced service 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) Multifamily 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 the 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 SCFH
and who do not qualify for one of the exceptions in paragraph (c) of
this section may request an EFV to be installed on their service lines.
If an eligible service line customer requests an EFV installation, an
operator must install the EFV at a mutually agreeable date. The
operator's rate-setter determines how and to whom 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 paragraphs (c) and (e)(5) of this
section, each operator must provide written or electronic notification
to customers of their right to request the installation of an EFV.
Electronic notification can include emails, Web site postings, and e-
billing notices.
    (2) The notification must include an explanation for the service
line customer of the potential safety benefits that may be derived from
installing an EFV. The explanation must include information that an EFV
is designed to shut off the flow of natural gas automatically if the
service line breaks.
    (3) The notification must include a description of EFV installation
and replacement costs. The notice must alert the customer that the
costs for maintaining and replacing an EFV may later be incurred, and
what those costs will be to the extent known.
    (4) The notification must indicate that if a service line customer
requests installation of an EFV and the load does not exceed 1,000 SCFH
and the conditions of paragraph (c) are not present, the operator must
install an EFV at a mutually agreeable date.
    (5) Operators of master-meter systems and liquefied petroleum gas
(LPG) operators with fewer than 100 customers may continuously post a
general notification in a prominent location frequented by customers.
    (f) Operator evidence of customer notification. An operator must
make a copy of the notice or notices currently in use available during
PHMSA inspections or State inspections conducted under a pipeline
safety program certified or approved by PHMSA under 49 U.S.C. 60105 or
60106.
    (g) Reporting. Except for operators of master-meter systems and LPG
operators with fewer than 100 customers, each operator must report the
EFV measures detailed in the annual report required by Sec.  191.11.

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 line that is safely
accessible to operator personnel or other personnel authorized by the
operator to manually shut off gas flow to the service line, if needed.
    (b) Installation requirement. The operator must install either a
manual service line shut-off valve or, if possible, based on sound
engineering analysis and availability, an EFV for any new or replaced
service line with installed meter capacity exceeding 1,000 SCFH.
    (c) Accessibility and maintenance. Manual service line shut-off
valves for any new or replaced service line must be installed in such a
way as to allow accessibility during emergencies. Manual service shut-
off valves installed under this section are subject to regular
scheduled maintenance, as documented by the operator and consistent
with the valve manufacturer's specification.

    Issued in Washington, DC, on October 7, 2016, under authority
delegated in 49 CFR Part 1.97.
Marie Therese Dominguez,
Administrator.
[FR Doc. 2016-24817 Filed 10-13-16; 8:45 am]
 BILLING CODE 4910-60-P