Demand, Maintenance To Keep Gas Distribution Market Stable In ’09

Annual Survey and Report
By Rita Tubb, Managing Editor | February 2009 Vol. 64 No.2

Contractors continue to provide a sizeable portion of the nation’s new distribution construction to install gas utilities. The figures provided by survey participants indicate that 82 percent rely on contractors to carry out 75 to 85 percent of all new construction on projects, while 12 percent indicated they relied on contractors to perform 50 to 70 percent of this work. Of the remaining 6 percent, 4 percent, with fewer than 5,000 gas customers, indicated they didn’t use contractors at all and the remaining 2 percent reported using contractors to perform approximately 25 to 35 percent of their work.

Integrity management for LDCs

The Pipeline and Hazardous Materials Safety Administration (PHMSA) has published a proposed rule that would establish integrity management requirements for gas distribution pipeline systems. This is the final phase of PHMSA’s implantation of integrity management. While writing of the final rule – and the completed guidance document – is not expected to be released before next year, respondents clearly see the final integrity management rule as having an adverse financial and operational impact on the LDC. The most common response was concern over the extensive documentation that will be required, plus the potential for software and hardware upgrades and additional administrative personnel.

A number of small LDCs said they felt particularly vulnerable. One described it as an “added burden for smaller companies that would grow over time.”

Regardless of size, more than 75 percent of those surveyed said they expected the rule to prove far more costly for the LDC than the PHMSA has suggested.