Report to TACIR on Underground Utility Damage Prevention in Tennessee Tennessee Regulatory Authority

Outline What is underground utility damage and how does current law address utility damage prevention in Tennessee? Why is this issue important? Why is the TRA involved? Have other states implemented reforms and how are they working? What reforms are needed in Tennessee to comply with Federal guidelines?

Damage Prevention Enforcement Gas Pipeline Operators Violations and Fines are assessed by TRA $10,000 per violation per day up to $500,000 ATMOS Energy – $12,000 Athens Utility Board – $15,000 Mt Pleasant Gas – $76,396 Memphis Light Gas and Water - $3,000 Gibson County Utility District - $184,000

Damage Prevention Enforcement All other utility owners and/or excavators Violations and Fines assessed by local police Maximum $2,500, 48 hrs in jail, or both.

Why important? Disruption of utility services to customers Increase utility costs Public safety Current law problems Inconsistent enforcement Not uniformly applied Lack of public education efforts on law to stakeholder groups No advisory group to help enforce law (stakeholder involvement lacking)

Why TRA Involved? Promote public utility safety Existing jurisdiction (Gas Pipeline Safety Program) Comptroller’s Audit Report 2007 Pressure from U.S. Department of Transportation Congressional action (PIPES Act 2006)

Federal Certification Application for states to enforce Federal Regulations Must adopt Federal Regulations Must have essentially same authority Must encourage and promote programs to prevent damage to pipeline facilities. Cooperate with Federal monitoring

Federal Monitoring Results Yearly Scores 2004 98 2005 100 2006 2007 98.5 2008 99

Inspection Totals Minimum requirement of 420 inspection Days Per Year

Funding 40-50% Federal funding 50-60% Inspection fee State Damage Prevention Program Grant ~$150,000 in past 2 years

Training Mandatory Federal Training Industry training and meetings 7 – Week-long Classes Pipeline Failure Investigation Techniques Course Optional Classes LNG, IMP, OQ Industry training and meetings

Expertise Education Federal Categorization 6 Graduate Engineers 2 Licensed Professional Engineers in the State of Tennessee Federal Categorization 4 Category I 2 Category III

Tennessee Regulatory Authority Performance Audit (August 2007) Tennessee Comptroller of the Treasury Recommendation: The General Assembly may wish to consider increasing the civil penalties for gas pipeline safety violations to levels that are substantially the same as federal levels. Such a revision could encourage increased compliance with pipeline safety standards and could also help ensure that Tennessee receives the maximum federal funding available from the U.S. Pipeline and Hazardous Materials Safety Administration.

Federal Evaluation Results “Dear Mr. Borum …Improvements are needed to Tennessee’s underground facilities damage prevention laws to incorporate the best practices described in the published Common Ground Alliance Study.” U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration July 22, 2007

Federal Evaluation Results “Dear Mr. Borum …Excavation damage continues to be the single greatest cause of underground pipeline failures. The PIPES Act encourages states to oversee damage prevention law non-compliance enforcement.” U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration August 22, 2008

Federal Evaluation Results “Dear Director Hargett. …The PIPES Act raises the 50 % cap on Federal funding of states pipeline safety programs to 80%. Establishing or actions taken to establish an effective Damage Prevention Program will likely be one of the key factors in achieving funding above the 50% level” U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration August 28, 2008

Federal Evaluation Results “Dear Commissioner Roberson, I am writing to enlist your support for a vital initiative to improve all underground utilities within your state. We are advocating an excavation damage prevention program to protect all pipelines as well as telecommunications water and sewer and other vital lifelines on which your citizens depend. Construction related damages is an all too frequent threat to our safety and the continuity of services we need to live and work ” U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration

Has Reform Worked in Other States? Virginia Law §56-265 (1995) Approximate 55% decrease in damages since inception. Georgia Law §25-9-1 (2000) “The new enforcement program has been successful and the stakeholder group has aided the PSC in driving down underground utility damages.” Georgia PSC Commissioner

Essential Components of Reform Element 1 – More utilities become a part of One Call Element 2 – Establish a stakeholder group Element 6 – Establish a dispute resolution process by the State Element 7 -- Empower a state agency with enforcement power with sufficient penalties to ensure consistent and fair enforcement of state law

Questions