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UGI: 40-year pipeline plan OK

UGI officials told a state Senate panel in Allentown on Tuesday that the utility is satisfied with its 40-year timeline to replace cast-iron pipelines, some of which are a century old.

A 12-inch cast-iron distribution line dating to 1928 is the prime suspect in the Feb. 9 explosion that killed five people and leveled a city block in Allentown, about a mile from the site of the hearing at Allentown Symphony Hall. The investigation into the blast is ongoing and a conclusion could still be months away, said Public Utility Commission gas safety chief Paul Metro.

Asked by Sen. Pat Browne, R-Lehigh, how long it would take to replace all the cast-iron pipe it has in the state, Robert Beard, UGI's vice president for marketing, rates and gas supply said:

"At the rate we are replacing cast-iron today, it would be approximately 40 years."

"Why is your timeline that long?" Browne asked. "Is that an acceptable timeline to you?"

"In my opinion, based on the history we have seen, that is a reasonable timeline," Beard said. "Again, what comes out of this investigation is new data to us ... when we take a look at [the investigation of the Feb. 9 explosion] our process by which we assign risk to different facilities will change when we get this information and that may in fact prompt us to accelerate our spend on capital."

Regardless, the distribution pipe on N. 13th Street in Allentown wasn't on the list for quick replacement, Beard said, because it had little to no "leak history" and the utility's risk assessment system considers low-pressure 12-inch diameter cast-iron pipes safer than higher-pressure 3-inch diameter cast-iron pipes. Age is only one factor the utility considers.

"This segment of pipe was not a candidate for accelerated replacement," Beard said.

Browne asked Beard how much "riskier" pipe exists in Allentown, but Beard said he didn't have that information handy.

"Of the 81/2 miles of cast iron that is replaced across UGI, I believe 21/2 miles were replaced in Allentown in 2010," Beard said.

Of the approximately 400 total miles of cast-iron pipeline in the UGI system, about 230 miles are in the Lehigh Valley. Almost a third -- 79 miles -- is in Allentown, according to UGI. Beard said the company spends about $20 million a year to replace, upgrade and maintain natural gas facilities.

Forty years is unacceptable, said Browne and state Sen. Lisa Boscola, D-Northampton, who is minority chairwoman of the Senate Consumer Protection and Professional Licensure committee.

Committee chairman Sen. Tommy Tomlinson, R-Bucks, said utilities have a way to raise money to finance faster pipeline replacement if they chose to take advantage of it.

"If a utility wants to accelerate what they are doing, they come to you and ask for a rate case," Tomlinson said to Robert Powelson, the PUC chairman.

Powelson said some utilities are reluctant to approach the agency for a base rate increase to pay for increased infrastructure replacement because the process is inefficient and takes nine months to complete. UGI last asked for a base rate increase in 1995.

Browne and Boscola said after the hearing that they would work to pass legislation to accelerate the replacement of aging natural gas pipelines and distribute the cost fairly between customers and the utility's shareholders.

"They could invest more than they are doing," Boscola said.

One of the options under consideration is creating a small surcharge that could be added to customers' bills to finance pipeline replacement. Boscola and Browne said any legislation must include cost-sharing by the utility itself.

Dave Malloy, who attended the hearing and lives in the 600 block of Jefferson Street, about a block from the explosion, said he was stunned to hear of UGI's 40-year replacement timeline.

He suggested the federal government create a pilot program in Allentown like the Depression-era Public Works Administration that would pump resources into tearing up and replacing the cast-iron lines.

"It just seems like 40 years is too long to fix these pipes," he said.

Scott.kraus@mcall.com

610-820-6745

Copyright © 2014, The Baltimore Sun
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