1. ILLINOIS COMMERCE COMMISSION Darin Burk Manager – Pipeline Safety 1

2. Distribution Integrity Management 2  Proposed Rule published in the Federal Register on June 25, 2008  Numerous comments were received by the Pipeline and Hazardous Materials Safety Administration (“PHMSA”)  Final Rule expected in September of 2009

3. Why is PHMSA Proposing DIMP? 3  Additional prescriptive requirements would bee too burdensome on the pipeline industry.  More effective to allow operators to analyze their system, identify weaknesses that could result in high consequence incidents and address those weaknesses.

4. Program Implementation 4  Distribution system operators will have 18 months from the published date of the final rule to develop and implement a Distribution Integrity Management Program.  The DIMP will address 7 basic elements.

5. Element 1: Knowledge 5  Identify the characteristics of the system and the environmental factors necessary to assess applicable threats and risks to the system.  Understand the design and operation.  Identify the additional information needed  Determine how to obtain additional information  Have a process to refine plan  Record data for newly installed facilities

6. Element 2: Identify Threats 6  Threat Categories  Corrosion  Natural Forces  Excavation Damage  Other Outside Force  Material or Weld Failure  Equipment Malfunction  Inappropriate Operation  Other Concerns

7. Element 3: Evaluate and Prioritize Risk 7  Determine the relative probability of each threat  Determine likelihood of failure  Determine potential consequences  System may be subdivide the system into regions of similar characteristics and consistent risk

8. Element 4: Identify and Implement Measures to Address Risks 8  Effective leak management program  Enhanced damage prevention  Assuring individual performance (Training & Operator Qualification)  Quality assessment

9. Element 5: Measure Performance, Monitor Results & Evaluate Effectiveness 9  Number of hazardous leaks either eliminated or repaired  Number of excavation damages  Number of excavation tickets  Number of EFV’s installed  Total number of leaks eliminated or repaired  Additional measures

10. Element 6: Periodic Evaluation 10  Continually re-evaluate threats and risks on the entire system  Evaluate the effectiveness of the program for assuring individual performance to reduce the risk of human error  Determine appropriate period for complete program re-evaluation based on complexity and changes in factors  Maximum of 5 year re-evaluation interval

11. Element 7: Reporting Results 11  Must report plastic pipe material failures including: fittings, couplings, valves, and mechanical joints  Must be reported no later than 90 days after failure  Include: location, pipe size, material type, nature of failure, pipe manufacturer, lot number, date of manufacture and other information found in markings on failed pipe

12. Excess Flow Valves 12  Required on all single family residences  New installations and replacements  Not require if:  System operates below 10 psig  Operator has knowledge of contaminates  Could interfere with necessary operation and maintenance activities  If EFV meeting performance standards is not available to operator

13. Deviation from Required Inspections 13  Operators will be allowed to propose inspection intervals that are outside the current required time limits  The ICC will review the request and determine if the operator will be allowed to extend inspection intervals

14. Does This Rule Apply To Master Meter Operators? 14  Yes.  Master Meter operators will be required to meet 5 elements:  Infrastructure Knowledge  Identify Threats  Identify & Implement Measures to Mitigate Risks  Measure Performance, Monitor Results, Evaluate Effectiveness  Periodic Evaluation and Improvement

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