American Gas - February 2014 - (Page 25)

COMMITMeNT TO eNHaNCINg SafeTy eAcH operAtor will Need to evAluAte ActioNs iN liGHt oF sucH criteriA As system vAriABles. these actions. In Colorado, for example, the Pipeline Safety Integrity Adjustment rider has been in place since 2012. A new law was passed in Minnesota in 2013 to provide a similar rider. Both processes provide for significant transparency of the planning process as well as regular review of program results. Xcel Energy sees this type of partnership with regulators as a key way to improve public safety and provide certainty for customer rates. Today's low natural gas prices provide the company with an excellent opportunity to improve public safety and invest in renewing aging infrastructure while minimizing the cost impact to customers. What has been the messaging from your company's executives and board of directors in terms of allocating resources to enhance the safety and integrity of the transmission infrastructure? JH: The message from Consumers Energy's executives and board of directors has been clear that safety is the top priority. They have supported the capital investments to install launchers and receivers on our transmission system to allow for ILI tools to be used. (We have utilized a robotics tool when a traditional ILI tool could not be used.) They have supported the "go above and beyond" approach to inspecting our transmission infrastructure outside of the HCA, and encouraged us to think creatively about new assessment techniques. NM: Safety is our highest priority as a company. From the board down to our frontline employees, we have a saying: "Always think safety first." That includes our people, the public, and our system. Our management team is unfailingly supportive of our overall system integrity plan. Additional staffing has been approved that support these facilities and systems in the areas of engineering promanagement, GIS, design engineering, and codes and standards. Capital resources have been made available to support pipeline retrofitting and replacement projects. State regulatory efforts have focused on new rate mechanisms, in the form of integrity management riders in North Carolina and Tennessee, to provide support for the company, as integrity efforts will remain an intense focus into the foreseeable future. Our executives have routinely expressed a desire to ensure that a safe, reliable, and high-integrity pipeline system is in place now and in the future. SK: Public and employee safety is a core value at Xcel Energy, with key metrics included on the corporate scorecard. Senior executives and the board of directors receive regular updates on the progress of these programs and support efforts to continue to improve operations and risk management. Xcel Energy has increased investments in both human and capital resources to improve the safety of our employees and the public. In less than five years, the company has added support and specialized skill sets in critical areas such as integrity management, engineering, project management, geospatial data technology, and gas governance. Its operations organization has also been realigned to provide increased focus on its natural gas infrastructure integrity. In addition, Xcel Energy has one of the best damage prevention and public awareness programs in the nation. The company is focused on a strong partnership with first responders in the communities in which its pipelines are located. What do you see as the greatest challenges for your company in addressing the new regulations that the industry expects the Department of Transportation to issue in meeting the 2011 Pipeline Safety Reauthorization? JH: Although Consumers Energy has in- spected more than 53 percent of the total transmission pipeline system, expanding TIMP requirements beyond the HCA will be a large challenge. There are pipelines in our system that will currently not allow for the passage of an in-line inspection tool. Although we are exploring new technology and trying to be as proactive as possible, this expansion will be a significant undertaking. NM: Piedmont's engineering department believes the biggest challenge will be meeting regulatory timeline expectations associated with any additional requirements. Our systems and infrastructure have been designed and installed over many decades. We need to work with regulators to balance our ability to address safety concerns with the continued safe operations of existing pipeline systems and the needs to improve upon our safe, reliable, and highintegrity industry. SK: Managing legacy pipeline assets will continue to be a challenge for Xcel Energy and the natural gas industry overall. Certain historical records are not available and cannot be re-created, nor will we ever have perfect knowledge of these legacy assets. Some of PHMSA's proposed rules (such as the proposed integrity verification process regulations) will require significant pipeline replacement, which will mean sizable capital investment. In addition, qualified personnel to perform this type of work are scarce and often are simply not available. Xcel Energy believes these legacy assets can be operated and overseen with a proactive integrity management program that supports maintaining a high degree of public safety. The company also strongly supports research and development efforts to improve asset knowledge, which provides more cost-effective improvements that benefit public safety. u Andrew Lu is managing director, Operations & Engineering, for AGA. february 2014 AmericAn GAs 25

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American Gas - February 2014