Amendment #6 to H4199

Repair/Replacement

Ms. Ehrlich of Marblehead moves to amend the bill in lines 35-53, by striking out subsection (e) and inserting in place thereof the following subsection:

(e) Commencing with calendar year 2013, the department shall establish an infrastructure replacement program to address aging natural gas infrastructure in the interest of public safety, reducing lost and unaccounted for gas, and reducing greenhouse gas emissions. Gas companies shall be authorized to file with the department an annual gas infrastructure replacement project plan, subject to the department’s review and approval. A plan shall include, but not be limited to, the replacement of mains, services, meter sets and other appurtenant facilities composed of non-cathodically protected steel, cast-iron and wrought iron, as leak-prone materials. The plan shall also include (1) a detailed description of the current distribution infrastructure of the company, including but not limited to, the current makeup of the system, the current leak rates on each component of the system, the current number of leaks on the system, the current systems in place for identifying and repairing leaks and determining whether to repair or replace infrastructure, the amount of greenhouse gas emissions reported to the Department of Environmental Protection under 310 C.M.R. 7.71, and the amount of lost and unaccounted for gas reported to the department over the past ten years; (2) proposed investments broken down into categories of programs designed to maintain the safety and reliability of the gas delivery infrastructure and reduce greenhouse gas emissions and lost and unaccounted for gas from the system; (3) a target for the greenhouse gas reductions that will be achieved as a result of the proposed projects; (4) a target for the amount of lost an unaccounted for gas that will be avoided as a result of the proposed projects; (5) an estimate of the bill impacts to ratepayers that takes into account the avoided costs from lost and unaccounted for gas, operations and maintenance, and reduction of greenhouse gas emissions and (6) a cost-effectiveness analysis of the proposed investments that includes a comparison of replacement with repairs. Provided that a gas company files its annual gas infrastructure replacement project plan on or before October 31st of a calendar year, the department shall review the work plan targets within six months, and shall authorize a rate factor becoming effective May 1st of the next calendar year to collect any revenue requirement, including depreciation, property taxes and return associated with the approved work plan. The department shall consider the costs and benefits of a plan, including, but not limited to, impacts on ratepayers, reductions of lost or unaccounted for gas, reductions in greenhouse gas emissions, and improving public safety in making its final determination, giving priority to plans addressing leak-prone infrastructure most immediately in need of repair or replacement. If such a plan is approved, the company shall provide quarterly reports to the department demonstrating that it has met the targets established in the plan for replacement, reduction of greenhouse gas emissions, and reductions in lost and unaccounted for natural gas. If the company does not meet those targets, it shall provide an explanation to the department and the department shall determine whether adjustments are necessary. Final project documentation shall be filed with the department within one year of such approval to demonstrate that project costs were reasonably and prudently incurred and to determine whether the company has met the targets established in the plan. The department shall investigate such costs within eight months, and the department shall have the authority to reconcile the authorized rate factor if necessary.