APCA Holds 39th Annual Convention

Another Record Turnout in San Juan
May 2010 Vol. 65 No. 5
New 2010 APCA President, Wayne Stringer and his wife Kathy of Troy Construction, Inc.

A record registration of 200 attendees marked the American Pipeline Contractors Association’s 39th Annual Convention at the El San Juan Hotel & Casino in San Juan, PR. This was on top of a record attendance at the 2009 meeting in Scottsdale.

Business session speakers included Greg Guidry, Onebane Law Firm, who spoke to regular members on the proposed labor legislation before Congress. Other speakers included Gregory Harper, senior vice president and group president of pipelines and field services for CenterPoint Energy; and Joseph Colaluca, senior vice president of Captive Resources.

Colaluca discussed the many benefits of joining or forming a captive insurance group, along with potential downsides and how to avoid them. Under a captive group, unspent premiums and reserve accounts are returned to you as dividends earn investment income. This can be substantial for companies with a good safety record. Additional insurance is purchased for catastrophic claims. Coverage includes workers compensation and liability; corporate insurance premiums must be at least $150,000 a year to qualify.

He gave an example of a captive with 285 members that one APCA member belongs to. The first $500,000 in losses is the responsibility of all the members. There is re-insurance for amounts between $500,000 and $1 million, and then a broker would provide each member an umbrella for claims above that. The umbrella is outside the program.

Greg Harper talked about the challenges of moving from a pipeline company, Spectra Energy where he was president, to a utility. This division of CenterPoint is growing and accounting for 40 percent of the company’s earnings. Several years ago, this figure was closer to 20 percent. CenterPoint is an amalgamation of the old Houston Lighting & Power, Arkla, Mississippi River Transmission system and Minnegasco. It owns no generation facilities, operating strictly as a transmission company. Its close proximity to shale gas plays along with its hub status and storage facilities have fueled recent growth.

The field services group accounted for about $100 million in revenue last year and Harper is projecting it will grow to $300 million in two years. Last year the company spent $320 million on gathering systems. Harper commented that the market driver today is the producer, who is pushing shale gas supply to market. He looks at a 28 Tcf market down the road, but feels there are some customers gone forever, including large industrial plants.