[Federal Register Volume 63, Number 22 (Tuesday, February 3, 1998)]
[Rules and Regulations]
[Pages 5464-5471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2496]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 192

[Docket PS-118A; Amendment 192-82]
RIN 2137-AC55


Excess Flow Valve--Customer Notification

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule requires operators of natural gas distribution 
systems to provide certain customers with information about excess flow 
valves (EFV's). Specifically, customers of new and replaced single 
residence service lines must be provided written notification about the 
availability of these valves meeting DOT-prescribed performance 
standards, and related safety benefits and costs. If a customer 
requests installation, the rule requires an operator to install the EFV 
if the customer pays all costs associated with installation. EFVs 
restrict the flow of gas by closing automatically if a service line 
breaks, thus, mitigating the consequences of service line failures. 
This regulation would enhance public awareness of the potential safety 
benefits from installing an EFV.

DATES: This final rule takes effect February 3, 1998.

FOR FURTHER INFORMATION CONTACT: Mike M. Israni, telephone (202) 366-
4571, or e-mail: [email protected], regarding the subject matter 
of this final rule, or the Dockets Unit (202) 366-4453 for copies of 
this final rule or other material in the docket referenced in this 
rule.

SUPPLEMENTARY INFORMATION:

Background

    During routine excavation activities, excavators often sever gas 
service lines causing loss of life, injury, or property damage by fire 
or explosion. EFVs restrict the flow of gas by closing automatically if 
a service line breaks, and mitigate the consequences of service line 
failures. Despite efforts, such as damage prevention programs, to 
reduce the frequency of excavation-related service line incidents on 
natural gas service lines, such incidents persist and result in death, 
injury, fire, or explosion. Because damage prevention measures are not 
foolproof, RSPA has sought an appropriate means to mitigate the 
consequences of these incidents. The National Transportation Safety 
Board (NTSB) and others have recommended EFVs to mitigate the 
consequences of such incidents, thus, saving lives and lessening the 
extent of property damage.
    By having an operator inform its customers of the availability of 
EFVs for installation at a cost and the resultant safety benefits, 
customers can decide if they want the operator to install an EFV on the 
service line. Notification giving information on EFVs may encourage EFV 
use and, by encouraging such use, may lead to reduced fatalities, 
injuries, and property damage that can result from excavation-related 
incidents on gas service lines.

Statutory Requirement

    In 49 U.S.C. 60110 Congress directed the Department of 
Transportation (DOT) to issue regulations requiring operators to notify 
customers in writing about EFV availability, the safety benefits 
derived from installation, and costs associated with installation, 
maintenance, and replacement. The regulations were to provide that, 
except where installation is already required, if the customer requests 
installation, an operator must install an EFV that meets

[[Page 5465]]

prescribed performance criteria, if the customer pays all costs 
associated with installation.
    Before DOT prescribed notification regulations, the statute 
required DOT to issue regulations prescribing the circumstances where 
operators of natural gas distribution systems must install EFVs, unless 
DOT determined that there were no circumstances under which EFVs should 
be installed.
    RSPA is the administration within DOT responsible for implementing 
laws addressing pipeline safety.
    RSPA published a notice of proposed rulemaking (NPRM) (Notice 2; 58 
FR 21524; April 21, 1993) (``Excess Flow Valve Installation on Service 
Lines''), proposing to require that EFVs be installed on single-
residence gas service lines. During the rulemaking process we reviewed 
technical information, sought advice from state safety representatives, 
and analyzed available operational data. RSPA determined, primarily for 
cost reasons, that there were no circumstances where RSPA should 
require EFV installation. As required by the statute, RSPA reported 
this determination to Congress on April 4, 1995. A copy of this report 
is available in the docket. As further required by 49 U.S.C. 
Sec. 60110, we developed performance standards for EFVs (industry 
standards were not then available) to ensure that an EFV installed in a 
single-residence gas service line operates reliably and safely. These 
performance standards were published as a final rule [61 FR 31449; June 
20, 1996].

AGA Petition and Pre-NPRM Meetings

    The American Gas Association (AGA) submitted a petition for a 
rulemaking on EFV customer notification in which it identified several 
issues it believed we should discuss in a notification rule. RSPA 
considered AGA's petition (on file in the docket) in developing the 
notice of proposed rulemaking. To gain further information before 
developing a proposed notification rule, RSPA met with representatives 
of AGA, the American Public Gas Association (APGA), NTSB and the Gas 
Safety Action Council (GASAC) on August 2 and September 6, 1995. We 
discussed AGA's petition and these meetings in the NPRM.

NPRM

    RSPA published an NPRM (61 FR 33476; June 27, 1996), proposing 
requirements for excess flow valve customer notification. The comment 
period closed August 26, 1996. Commenters included industry 
associations, local distribution companies, consultants, city and state 
agencies, and a federal safety agency.

Advisory Committee Review

    In November 1996, RSPA briefed the Technical Pipeline Safety 
Committee (TPSSC) on the status and the comments received on this 
rulemaking. In December 1996, we sent letter ballots to the TPSSC 
members to vote on the proposed rule and the regulatory evaluation. 
(The TPSSC is required to serve as a peer review panel and review the 
costs and benefits associated with any proposed regulatory standard in 
accordance with 49 USC 60102 (b)(3)). We received 11 out of 15 ballots. 
These 11 members voted to adopt the NPRM and Regulatory Evaluation. 
Seven members had comments, which are addressed below.

The Final Rule

    The final rule establishes a new section in the pipeline safety 
regulations, Sec. 192.383, ``Excess flow valve Customer Notification.'' 
The rule requires written notification of customers with natural gas 
service lines where EFVs meeting prescribed performance criteria can be 
installed. To be consistent with the final rule that prescribed 
performance standards for EFVs installed on single-residence service 
lines operating continuously throughout the year at a pressure not less 
than 10 psig, this rule limits the scope of customer notification to 
those customers. Of those single-residence services, the rule further 
limits written notification to new and replaced service line customers.

Definitions

    RSPA defines a replaced service line as a natural gas service line 
where the fitting that connects the service line to the main is 
replaced or the piping connected to this fitting is replaced.
    RSPA defines the service line customer an operator must notify as 
the person who pays the gas bill, or where service has not yet been 
established, the person requesting service. Under this definition, the 
person who pays the gas bill may be the tenant, the owner, or a third 
party. In cases where service has not yet been established, such as a 
new subdivision or cluster of homes, the person requesting new service 
may be the home builder.

What to Put in the Written Notice

    This rule requires that the notification contain the minimum amount 
of information the statute requires. An operator may decide how to word 
that information as long as sufficient information is given to provide 
the customer a basis to decide whether to pay for EFV installation. The 
notice must gear the explanations to the gas consumer, not an engineer.

--Meets DOT Performance Standards

    An explanation that an excess flow valve meeting minimum DOT-
prescribed performance standards is available for the operator to 
install on the service line if the customer pays the cost of 
installation. The explanation must make clear to the customer that EFV 
installation is not mandatory, but that if the customer requests 
installation and pays all costs associated with installation, the 
operator will install an EFV.

--Safety Benefits

    An explanation of the potential safety benefits of installing an 
EFV, to include that an EFV is designed to shut off the flow of natural 
gas automatically if the service line breaks.

--Cost Associated With Installation, Maintenance, and Replacement

    An explanation that if the customer requests the operator to 
install an EFV, the customer bears all costs associated with 
installation, and what those costs are. In addition, the notice must 
alert the customer that costs for maintaining and replacing the EFV may 
be incurred, and what those costs would be, to the extent known.

Additional Information in the Written Notice

    The final rule does not require an operator include additional 
information, such as EFV manufacturers' brochures and a consumer 
group's telephone number, in the notification. Although we are not 
requiring such information to be included, we encourage operators to 
include any information that aids a customer's decision making.

When Notification and Installation Must be Made

    The final rule requires that one year after the final rule is 
published, an operator must notify each service line customer of a new 
service line (single-residence service line that operates at a pressure 
not less than 10 psig) when the customer applies for service. On 
replaced service lines, an operator must notify each customer (single-
residence service line operating at a pressure not less than 10 psig) 
when the operator determines the service line will be replaced. If a 
customer requests installation, the operator must install the EFV at a 
mutually agreeable date.

[[Page 5466]]

What Records Are Required

    The final rule requires that an operator must make certain records 
available for inspection:
    (1) A copy of the notice currently in use; and
    (2) Evidence that notices have been sent to the service line 
customers (new and replaced single-residence service lines operating at 
a pressure not less than 10 psig) within the previous 3 years.

When Notification is Not Required

    In the NPRM, we sought comment from operators, state pipeline 
safety agencies, their representative associations and others on the 
issue of a state or locality preventing an operator from charging the 
customer for EFV installation costs. We also sought comment on whether 
the waiver process in such a situation would be too burdensome. We did 
not receive any comment. Thus, in RSPA's judgment the regulatory waiver 
process now in place may be used if a State or local authority prevents 
or restricts the gas utility from accepting a customer's payment for 
EFV installation costs. Similarly, if an operator believes that in a 
particular situation, compliance would be infeasible, impractical or 
unreasonable, the operator may apply for a regulatory waiver.
    The final rule describes certain limited circumstances where an 
operator would not have to notify a customer.
     Service lines where the operator will install an excess 
flow valve voluntarily or where the state or local jurisdiction 
requires installation.
     If excess flow valves meeting the prescribed performance 
standards are not available to the operator.
     Where an operator has prior experience with contaminants 
in the gas stream that could interfere with an EFV's operation, cause 
loss of service to a residence, or where installing an EFV would 
interfere with necessary operation or maintenance activities, such as 
blowing liquids from the line.
     In emergency and short time notice replacement situations 
where an operator cannot notify a customer before replacing a service 
line. Examples of these situations would be where an operator has to 
quickly replace a service line because of

--third party excavation damage
--Grade 1 leaks, as defined in the Appendix G-192-11 of the Gas Piping 
Technology Committee (GPTC) Guide for Gas Transmission and Distribution 
Systems,
--a short notice service line relocation request

    We have allowed an exemption from notification when an operator 
must quickly replace a service line because of third party damage. 
Although the impetus for this notification rule was to mitigate the 
consequences of service line failures, particularly, when caused by 
third party excavators, we recognize that in such an emergency, an 
operator may not be able to notify a customer. Nonetheless, although 
not required to do so, we urge operators to make their best efforts to 
notify customers in emergency situations, so that the consequences of 
any future failures may be mitigated.

Discussion of Comments

    RSPA received 49 comments in response to the NPRM. Commenters 
included two industry associations (AGA, New England Gas Assoc.), 37 
local distribution companies, two consultants, seven city and state 
agencies, and one federal safety agency (NTSB). In addition, we 
received comments from TPSSC members. Of these comments, 12 were 
opposed to issuing any notification rule, and the remaining commenters 
directed their remarks to specific issues.
    General Comments--Twelve commenters were opposed to issuing the 
rule. They questioned the reliability, the benefit versus costs, and 
the suitability of EFVs to handle the majority of leaks encountered in 
a gas distribution system. They argued that our focus should be on 
preventing third-party damage, that incidents involving the type of 
failures where an EFV is effective are infrequent, and that because 
most operators design their load systems for future use, EFVs would 
severely restrict load growth.
    Two commenters said the typical customer is not well versed in gas 
industry technology, safety matters or frequency of service line 
failures, and may even be confused when asked to make a decision on 
EFVs. Two commenters suggested that verbal notification may be 
sufficient.
    NTSB pointed out that the statute placed no limits on the type of 
customer who should receive notification. NTSB recommended we require 
notice of EFV availability to all residential and commercial customers 
with service lines that have operating parameters compatible with any 
commercially available EFV.
    Response--RSPA is following its statutory mandate to prescribe 
regulations requiring operators to notify customers in writing about 
EFV availability, the safety benefits derived from installation, and 
costs associated with installation, maintenance and replacement, and 
requiring operators to install an EFV at the customer's request if the 
customer pays the installation costs. We considered all comments in 
developing final regulations.
    If notification contains this minimum amount of information, and is 
written for an average gas customer, the customer should be able to 
decide whether it wants an EFV installed. If a customer has questions, 
an operator should be able to provide knowledgeable personnel who can 
explain technical information to a customer's satisfaction to enable 
the customer to make a well-reasoned decision about installation.
    RSPA determined that it would neither be practical nor cost 
beneficial for operators to notify all single-residence customers. 
Determining whether EFVs can be installed on existing lines presents 
difficulties (such as lack of relevant records and historical data) not 
encountered on new and replaced lines. Furthermore, RSPA's economic 
evaluation shows that requiring notification to all single-residence 
customers would result in substantially higher costs with marginal 
safety benefits due to the increased time an operator would have to 
spend in responding to customer inquiries and determining operating 
conditions on existing lines. Because of the increased installation 
costs to retrofit an existing line, it would be unlikely that many 
existing customers would choose to pay the costs of installation. 
Nonetheless, RSPA encourages operators to consider expanding 
notification to all single-residence customers.
    RSPA will consider extending the scope of notification to 
hospitals, schools, commercial enterprises, and apartment buildings 
after EFV standards and guidelines are published by the American 
Society of Testing and Materials (ASTM) F17.40 committee and the 
American National Standards Institute (ANSI)/Gas Piping Technology 
Committee (GPTC) Z380.
    Comments on Cost/Benefit Study--Five commenters said that we had 
underestimated the costs to comply with the rule. They explained that 
the cost of developing a utility-specific notice will be significant 
because of the legal, safety, and customer issues involved, and that we 
should consider $35 to $45 per hour as the cost to develop and review 
the notice. Commenters said many calls would need an engineer or a 
supervisor to talk to the customer. AGA said the study had failed to 
address who would incur the costs if the customer wants the EFV 
removed, or if a properly installed EFV later malfunctions and cuts off 
service.

[[Page 5467]]

    Advisory Group: One member pointed out that postage costs were not 
included in the total cost to notify all existing residential 
customers. This member suggested including the estimated number of 
customers who would request an EFV in each case, and a cost comparison 
of excavation costs for new and existing customers.
    Response--RSPA has revised its final economic evaluation in light 
of the comments to include the labor costs of preparing and mailing the 
notice, and the costs of fringe benefits in the hourly costs. In 
addition, we revised the salary estimates of the person responding to 
customer inquiries to accommodate concerns that answering such 
inquiries may require technical expertise.
    RSPA did not include postage costs in its estimate of the cost to 
notify existing customers because the notification could be included 
with the customer's monthly bill. We also did not estimate the number 
of customers who might request an EFV because we have no relevant data. 
The cost/benefit study did explain in comparing the costs to notify new 
and replaced customers versus existing customers that existing 
customers requesting EFV installation might have to pay $500 or more 
for installation mostly due to excavation cost. The cost/benefit study 
is described later in this document and is available in the docket.
    Proposed Section 192.383(a)--(68.9 kPa (10 psig) Threshold)--Six 
commenters said that a 68.9 kPa (10 psig) threshold for installing an 
EFV should not be used as a notification threshold. NTSB said that EFVs 
should be made available to customers having service lines that operate 
at pressures as low as 34.5 kPa (5 psig). The other commenters did not 
want the 68.9 kPa (10 psig) threshold because if the service line 
pressure for each customer is not recorded, it would be difficult to 
know if the line pressure will drop below 68.9 kPa (10 psig). Some 
commenters suggested that a minimum pressure threshold should be left 
to the operator's judgment.
    Response--We proposed that an operator notify a customer of a new 
or replaced service line that operates at a pressure not less than 68.9 
kPa (10 psig) because this is the pressure threshold we had established 
for EFV installation in the performance standards. We explained our 
reasons for setting this threshold in that final rule [61 FR 31449; 
June 20, 1996].
    The final rule continues to limit notification to new and replaced 
service lines meeting the 10 psig threshold. In making this decision, 
we also considered that:

--Most households in the United States receive natural gas from their 
service lines between 68.9 kPa (10 psig) to 413.4 kPa (60 psig).
--DOT's incident report data indicates that services in the 34.5 kPa (5 
psig) to 68.9 kPa (10 psig) pressure range are unlikely to experience 
incidents from outside force damage. (A survey of incidents from 1984 
to 1992 shows that one out of 212 reportable incidents occurred due to 
outside force damage).

    Comments on Section 192.383(a)--(Service Lines Covered Under This 
Rule)--One commenter asked if customer-owned service lines were 
covered. Another commenter said that the proposed rule was unclear 
whether notification should be sent to two customers if both are 
supplied from the same service line.
    Response--This rule applies to service lines serving a single 
residence. One service line serving two or more residents would not be 
covered. Customer-owned service lines operating at or above the 10 psig 
pressure requirement are included unless one of the notification 
exemptions applies.
    Proposed Sections 192.383(a)(1), (a)(3) and (b)--(Costs Associated 
With EFV Installation)--We proposed that if a customer requested EFV 
installation, the customer pay the costs associated with installation 
and defined those costs as the direct costs (parts and labor) of 
installation. We also proposed that an operator must install an EFV if 
the customer agrees to pay all installation costs.
    AGA said that Congress clearly intended for the customer to incur 
all costs including operation and maintenance. Several commenters 
stated that we must follow Congress's intent to require customers pay 
for operating and maintaining the EFV, in addition to the installation 
costs. Some commenters said that costs must include all incremental 
parts, labor and maintenance. They said costs such as repair, 
resetting, replacement, and deactivation can be substantial. Three 
commenters argued that we have no authority to mandate a costing 
methodology because that authority lies with the state public utility 
or commission. Some commenters complained that direct costs had not 
been clearly defined.
    NTSB commented that the language in the proposed rule requiring 
customers to pay replacement costs is inconsistent with the preamble's 
discussion that operators recoup only the direct costs of installation. 
NTSB also pointed out that the experience of the two largest users of 
EFVs, who had not had any design-related EFV failure in the last 20 
years, supported not including replacement costs.
    Advisory Group: Two members said costs should include indirect 
costs of installing or replacing the EFV, including maintenance and 
replacement costs. One member said costs incurred due to false closure 
or other inappropriate operation should be included.
    Response--The statute requires that an operator notify its 
customers of the costs associated with installation, maintenance and 
replacement but that the operator install an EFV if the customer pays 
the installation costs. In following this mandate, we are requiring 
that an operator notify its customers that costs for maintaining and 
replacing an EFV could be incurred after installation and what those 
costs are, to the extent known. The notice must also explain that if 
the customer requests installation, the customer has to pay the 
installation costs at that time, and what those costs are.
    RSPA recognizes that the regulatory authority to price gas lies 
with state and local public utility commissions. We believe that public 
utility commissions will recognize that EFV installation, maintenance 
and replacement costs are legitimate costs and allow operators to 
charge for those services, to the same extent they are allowed to 
charge for other service line services. Nonetheless, we believe that to 
carry out the statutory requirements, we should define some of the 
costs.
    The proposed rule defined installation costs as direct costs (parts 
and labor) of installing an EFV. We proposed a limit on what an 
operator could recoup for installing an EFV so that an EFV would not be 
cost prohibitive. We believe Congress intended gas customers to have a 
reasonably priced extra safety protection. In finalizing this rule we 
have attempted to clarify the installation costs that an operator 
should recoup. Installation costs of an EFV are costs directly 
connected with installation of EFVs, for example, costs of parts, 
labor, inventory and procurement.
    Although the statute was amended to allow an operator to notify its 
customers about installation, maintenance and replacement costs, a 
customer only has to pay installation costs to have an EFV installed on 
its service line. Thus, we believe that an operator may later recoup 
maintenance and replacement costs only if such costs are ever incurred. 
These costs are not to be included in the initial installation costs.

[[Page 5468]]

    Proposed section 192.383(a)(2)--(Potential Safety Benefits)--The 
NPRM proposed that notification include an explanation of potential 
safety benefits. Eight commenters said that the NPRM did not address 
the potential hazards from EFVs, which could subject an operator to 
liability if the EFV fails to perform to a customer's satisfaction. One 
commenter suggested notification include that an EFV is not designed to 
protect against slow leaks, system over pressure, or leaks inside the 
house.
    We further proposed that the explanation of safety benefits include 
that an EFV is designed to shut off the flow of the natural gas when 
the service line is ruptured. A commenter suggested changing the 
wording to ``in the event'' the service line is severed, because ``when 
the service line is ruptured'' implies that a service line will 
rupture. This commenter also suggested that the term ``rupture'' be 
replaced with ``severed'', as ``rupture'' is also used for material 
failures, such as a crack in polyethylene pipe.
    Advisory Group--One member suggested replacing ``service line is 
ruptured'' with ``damaged service line conditions cause its closure.'' 
Another member said the wording ``designed to shut off the flow'' is 
not accurate as an EFV may not totally shut off flow.
    Response--The statute requires notification to include EFV 
benefits. The statute does not preclude an operator from putting in EFV 
limitations (for example, that an EFV does not protect against slow 
leaks due to corrosion, threaded joints, or leaks beyond the meter 
assembly).
    We have changed ``rupture'' to ``break'', and ``when'' to ``if the 
service line breaks'' in the final rule. However, we have retained the 
phrase ``designed to shut off'' because it is a performance standard 
requirement for the valve.
    Proposed Section 192.383(a)(4)--(Notification Language)--The NPRM 
proposed that notification be ``in sufficient detail'' and ``in 
language easily comprehensible.'' Two commenters said this is a 
subjective standard that does not enable the operator to distinguish 
between acceptable and deficient language.
    Response--We have revised this requirement. We continue to use 
performance-based language to ensure that notices are written for the 
average customer, not for persons with specialized technical expertise.
    Comments on Additional Information That Should be in the Notice--
One commenter said notification should include information that 
excessive consumption may cause the EFV to activate. This commenter 
said the operator should not give the customer any warranties about an 
EFV's operation. One commenter said that gas operators should, in 
addition to third party damage, describe all conditions, such as, 
earthquakes, lightning strikes, ground subsidence caused by changing 
weather conditions, and vandalism, which may cause a pipeline to 
rupture.
    Response--RSPA disagrees that excessive consumption may cause an 
EFV to activate. If the valve meets the DOT performance standards and 
is chosen properly based on the service line consumption, then the 
valve will not activate unless consumption exceeds 50% above the 
maximum flow, an unlikely event. We have used the phrase ``if the 
service line breaks'' to acknowledge that other conditions may cause a 
service line failure. However, we leave to the operator's discretion 
whether to describe all conditions that may cause a pipeline to fail.
    Proposed Section 192.383(a)(5)--(Comments on Definitions of 
Replaced Service Line & Service Line Customer)--Twenty six commenters 
requested further clarification of the proposed ``replaced'' service 
line and ``service line customer'' definitions.
    Replaced Service Line--We proposed a ``replaced'' service line as 
one in which a section of pipe is replaced between the gas main and 
meter set assembly. Two commenters suggested a ``replaced'' service 
line should be as where a fitting connecting the service line to the 
main is replaced or when the service is replaced completely from the 
main to the meter assembly. One commenter suggested a ``replaced'' line 
as one where at least 50% of the service line is being replaced. AGA 
recommended that a ``replaced'' service line refer to a natural gas 
service line in which the fitting that connects the service line to the 
main is replaced or the piping connected to this fitting is replaced.
    Advisory Group--Two members recommended we use AGA's definition of 
``replaced'' service line.
    Service Line Customer--We proposed that a ``service line 
customer'', the person the operator should notify, should be the person 
paying the gas bill or where the service was not yet established, the 
owner of the property. AGA suggested that where service has not yet 
been established, the service line customer should be the person 
requesting service. Two commenters suggested the person notified should 
be the person requesting service, or where gas service exists and the 
residence is vacant, the owner of the property. One commenter said the 
person notified should be the builder, not the owner of the property 
who signs for new service.
    NTSB said the proposed definition does not allow persons at risk, 
specifically renters in new housing subdivisions, to decide whether an 
EFV should be installed. NTSB said that because our definition limited 
operators to notifying builders in new housing subdivisions, we should 
require notification of both renters and the owners of the rented 
buildings.
    Some commenters said the proposed wording could be misread to 
suggest all customers must be notified. Commenters suggested using 
``each applicable customer'' and define ``applicable customer'' as 
those customers meeting the criteria in 192.383 (a). AGA and other 
commenters suggested adding another definition to clarify which 
customers should be notified.
    Response--We have revised the ``replaced'' service line and 
``service line customer'' definitions. We have also re-written the 
regulation for clarity, to eliminate any confusion over which gas 
customers must be notified. NTSB's comment that both renters and owners 
be notified would create conflict if one wanted an EFV installed and 
the other did not. Proposed section 192.383(a)(5) is changed to section 
192.383(b) in the final rule.
    Proposed Section 192.383(c)--(30 Day Notification and One Year 
Implementation Requirements)--Practically all commenters expressed 
concern about the proposed requirement that an operator notify each 
customer thirty days before a new or replaced service line is 
installed. They said thirty days was impractical and unduly burdensome. 
Commenters explained that operators currently schedule and complete 
regularly planned service line installations in less than 30 days. 
Moreover, operators replace service lines immediately for public safety 
and good customer service. Some commenters suggested allowing an 
operator to establish its own criteria for when to notify. One 
commenter said that we did not clearly state how many times the service 
line customer should be notified.
    NTSB said the one-year implementation period is too long, and that 
six months is more than adequate for the industry to prepare for 
compliance. NTSB explained that EFVs are commercially available and 
that industry associations are already developing guidance to help 
operators draft appropriate notices.
    Advisory Group--Two members recommended a 5 to 10 day notification

[[Page 5469]]

period as more appropriate than the proposed 30 days.
    Response--RSPA agrees that 30 days advance notification is 
impractical and has revised this requirement. Now an operator must 
notify a new service line customer (single residence with service line 
pressure not less than 10 psig) of EFV availability when that customer 
applies for service. A customer having its service line replaced 
(single residence with service line pressure not less than 10 psig) 
must be notified of EFV availability when the operator determines the 
service line will be replaced. If the customer requests installation, 
an operator must install the EFV at a mutually agreeable date. In 
either case, a customer has to be notified only once.
    We have kept the one-year implementation period. We disagree that a 
six-month implementation period is adequate for operators to notify 
customers. One year is more appropriate for operators to learn which 
customers to notify, to draft notices, and to instruct personnel to 
handle inquiries.
    Proposed Section 192.383(d)-(Recordkeeping)--Six commenters 
objected to the proposal that operators keep proof that notices have 
been sent to customers within the previous 3 years. They said that 
maintaining a list of notified persons will be burdensome and 
cumbersome, driving up the record keeping cost. Some commenters 
suggested changing ``proof'' to ``evidence.''
    Advisory Group--One member argued against any record keeping 
requirement because of the difficulty in tracking who was notified.
    Response--To check compliance, RSPA and State inspectors will need 
to view a copy of the notice operators send customers and evidence that 
notices have been sent to customers. This evidence may relate to the 
overall notification process, and need not be customer-specific. For 
example, a record showing the approximate dates notices are mailed or a 
written procedure for the notification process would be evidence 
notices have been sent. Therefore, we have not changed the proposed 
record keeping requirement.
    Proposed Section 192.383(e)--(Exemptions from Notification 
Requirements)--In the NPRM, we sought comment and information on 
situations where an operator may not be able to notify a customer 
before replacing a service line. Seventeen commenters responded to this 
issue. Several commenters said that many repairs made to services to 
repair minor damage or eliminate leaks involve replacing a short 
section of line and not exposing the main, and should be exempt from 
the notification rule. The majority emphasized that notification 
requirements should not apply to emergency and short notice 
replacements, such as when a line has to be replaced because of:

--third party excavation damage
--Grade 1 leaks, as defined in the Appendix G-192-11 of the Gas Piping 
Technology Committee guide for gas transmission and distribution 
systems (A leak that represents an existing or probable hazard to 
persons or property, and requires immediate repair or continuous action 
until the conditions are no longer hazardous.)
--a short notice service line relocation request (a short notice 
request from the customer or a utility to relocate the service line due 
to, for example, a main being relocated, to prevent interference with 
new construction, the widening of a street.)

    In addition, AGA and three other commenters urged us to exempt a 
service line where the regulator/meter assembly is within 3.66m (12 
feet) of the main. They reasoned that because third party damage on 
shorter service lines is uncommon, an EFV will not serve any purpose.
    One operator said it would not be prudent to put an EFV in any part 
of the system if contaminants have shown up in other areas of the 
system. Another commenter said an operator should not have to send 
notification if it found EFV installation impractical.
    Advisory Group--Two members recommended adopting an emergency and 
short notice exemption. One member recommended exempting notification 
for service lines less than 3.66m (12ft), because third party damage is 
unlikely on short lines. One member suggested exempting installation in 
``impractical or infeasible'' circumstances. Another member said it was 
unclear whether a waiver was required for a specified exemption.
    Response--We have amended the notification exemptions to 
accommodate certain emergency and short notice situations. As explained 
previously, although we are not requiring notification in those 
situations, we encourage operators to make their best efforts to notify 
customers. The consequences of any future service line failures may be 
mitigated if an EFV is installed. We have not adopted a short line 
exemption. We believe that because an operator is unlikely to have 
advance knowledge of a service line's length, creating an exemption for 
short lines would serve little purpose. While we recognize that on 
short service lines an EFV may offer little or no protection, because 
third party damage is unlikely, we believe the customer should decide 
whether it wants an EFV installed. An operator may decide whether to 
include information about short line protection.
    Although we allow an exemption when an operator has experienced 
contaminants in the gas stream, we disagree that EFVs should not be 
installed throughout the entire distribution system if contaminants 
have shown up in other areas of the system. These are probably isolated 
instances, unless the operator can demonstrate otherwise.
    RSPA believes the listed exemptions should cover most situations. 
If in a particular instance, an operator believes it should not notify 
customers because EFV installation would be infeasible, impractical, or 
unreasonable, the operator may apply for a regulatory waiver.
    Comments on Rearranging Sections--Three commenters recommended we 
rearrange sections for clarity.
    Response--RSPA has rewritten and rearranged the final rule for 
clarity.

Regulatory Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This final rule is not considered a significant regulatory action 
under section 3(f) of Executive Order 12866 and, therefore, was not 
subject to review by the Office of Management and Budget. The final 
rule is not considered significant under the regulatory policies and 
procedures of the Department of Transportation (44 FR 11034; February 
26, 1979).
    A regulatory evaluation has been prepared based on the estimated 
expense involved in developing and sending customer notification to new 
and replaced single-residence service line customers.
    RSPA has determined that large and moderate-sized gas operators 
will develop their own customer notice. This should take approximately 
40 hours at approximately $40 an hour or a one-time cost of $1,600 per 
company (40 hours  x  $40 per hour = $1,600). RSPA estimates in its 
regulatory evaluation (based on analysis done for an earlier rulemaking 
on customer-owned service lines) that there are 106 large gas operators 
and 145 moderate-sized gas operators. Therefore, the cost to the 
industry to develop the required notice will be a one-time cost of 
$401,600 (251  x  $1,600).
    The cost of mailing this notice will be $0.32 plus the estimated 
$0.1 copying

[[Page 5470]]

cost for a one-page notice, for a total cost of $0.42 per customer. If 
there are 900,000 new or replaced customers annually, the cost of 
postage for this notice is $378,000 (900,000  x  .42 mailing) per year. 
In our draft economic evaluation, we did not account for the labor cost 
it takes to mail the notice. One operator suggested 5 minutes per 
notice by an employee making $11 per hour with an additional 60% for 
fringe benefits, which calculates to $1,320,000 (900,000  x  $11  x  
1.6  x  1\1/2\ = $1,320,000). The total cost of postage plus labor 
would be $1,698,000 annually ($378,000 + $1,320,000 = $1,698,000).
    Assuming 10% of all notified customers were to call operators for 
more information would result in 90,000 phone calls. Each call lasting 
on average five minutes would amount to 7,500 hours (90,000  x  5/60 
hrs) spent answering customer inquiries. In the draft evaluation, we 
estimated the hourly wage for the person answering telephone inquiries 
would be $15 an hour. One commenter suggested that the person answering 
telephone inquiries should be an engineer. To reflect that a person 
with more technical expertise may need to answer a customer's inquiry, 
we increased the hourly salary estimate to $25 per hour plus benefits. 
If the employee responsible for answering were paid $25 per hour plus 
60% for fringe benefits, the additional cost of these conversations 
would be $300,000 (75,000  x  $25  x  1.6) per year. The total cost to 
the industry will be the one time cost of developing the notice, 
$401,600, and the additional cost per year of mailing and handling 
inquiries, $1,998,000 ($300,000 + $1,698,000 = $1,998,000).
    As discussed in the Regulatory Evaluation, the American Public Gas 
Association (APGA), which represents municipal gas distribution 
companies (the bulk of small operators), has agreed to assist small and 
medium-sized operators in developing a generic EFV notification. RSPA 
also believes that EFV manufacturers, as well as other large companies 
and state gas associations, are likely to assist smaller gas operators 
in developing an EFV notice. RSPA believes that, with this help, small 
and medium-sized operators will choose to use a generic notification 
rather than incur the cost of developing their own notice. However, 
even with the cost of notice reproduction, mailing, and handling phone 
inquiries as described above, we estimate that the cost of developing 
the required notice will be minimal for small and medium-sized 
operators.
    We considered requiring notification of the availability of EFVs to 
all customers, not simply new and replaced customers. We rejected this 
alternative as not being cost-beneficial for two reasons. First, the 
cost of this rule would be an additional $5.36 million (53.6 million 
customers  x  $.10 per copy) just for copying the notice. In addition, 
assuming 10% of all notified customers were to telephone operators for 
more information, that would result in 5.36 million additional phone 
calls. Each call lasting five minutes would amount to 446,666 hours 
(5.36 million  x  5/60 hours). If the employees responsible for 
answering these inquiries were paid a salary of $25 per hour plus 60% 
for fringe benefits, the additional cost of handling inquiries would be 
$17.97 million (5.36M  x  \1/12\  x  1.6  x  $25=$17.97M) to the 
industry. Therefore, the total cost of notifying existing customers 
would be additional $23.33 million ($5.36M + $17.97M). Second, there 
would be marginal safety benefit as few existing service line customers 
would be likely to request EFV installation that could cost more than 
$500 per service line, mainly due to the excavation costs associated 
with such installation. Therefore, RSPA concludes that requiring 
operators to notify all existing customers would cost significantly 
more and would provide little additional benefit to the public.

Benefits

    The main benefit of this regulation is that new and replaced 
service line customers will be provided with the necessary information 
for them to decide whether they should request that an EFV be installed 
on their service line. Other expected benefits from this rule are 
increased EFV use, which could reduce the fatalities, injuries and 
property damage that can result from excavation-related incidents on 
gas service lines.
    Although the total benefits of this rule cannot be estimated, RSPA 
has analyzed incidents (March 1991-February 1994) involving 2 
fatalities and 16 injuries which may have been prevented with the 
installation of an EFV. Further, the average property damage from 30 
reportable incidents (March 1991-February 1994) involving service lines 
where EFV may have mitigated the accident was estimated to be $14,082 
per incident (1993 dollars). Updating this for November 1997 dollars 
the average property damage per incident is estimated to be $15,739 per 
incident.

Conclusion

    Based on the findings of this evaluation this rule should have 
minimal economic impact on industry and the public. The regulatory 
evaluation is available for review in the docket.

Regulatory Flexibility Act

    The Federal Government is required to determine the impact of its 
regulations on small entities. Based on the regulatory evaluation, RSPA 
has determined that the rule will not have a significant impact on a 
substantial number of small entities. Approximately 1,600 natural gas 
distribution operators will be affected by this rule. APGA, the trade 
association of the majority of small operators, has indicated it will 
assist operators in preparing a notification. Additionally, EFV 
manufacturers have also offered to assist operators. It is also likely 
that regional gas associations and large operators will assist smaller 
operators in developing the appropriate notification. All these actions 
will serve to minimize the costs to small operators because small 
operators are apt to use a generic notice created by one of these 
groups rather than incur the expenses of developing their own notice.

Paperwork Reduction Act

    This final rule contains information collections that have been 
submitted for review by the Office of Management and Budget (OMB) under 
section 3507(d) of the Paperwork Reduction Act of 1995 (Pub. L. 104-
13). RSPA has made some adjustments to its hourly and cost paperwork 
burden estimates based on comments it received to its draft economic 
evaluation. If any commenters have additional concerns that have not 
previously been submitted, they may submit their comments directly to 
OMB.
    Interested persons are invited to comment on the collection of 
information. Comments should address:
    (1) The necessity and utility of the information collection for the 
proper performance of the agency's functions; (2) the accuracy of the 
agency's burden estimates, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the information collection burden on the respondents, including the use 
of automated, electronic, mechanical, or other technological collection 
techniques.
    Administration: Department of Transportation, Research and Special 
Programs Administration;
    Title: Excess Flow Valves: Customer Notification
    Need for Information: By notifying customers that they may have an 
excess flow valve installed on their line at cost, some of the 
consequences of service line

[[Page 5471]]

failures (fatalities, injuries and property damage) could be mitigated.
    Summary: Operators must demonstrate that they have sent the EFV 
notification to their customers.
    Proposed Use of Information: The notification will advise customers 
that they may request an excess flow valve be installed on their 
service line at their own expense. Also, by keeping proof that 
notification was sent, RSPA will be able to ascertain that operators 
are complying with this regulation.
    Frequency: Occasionally, once for each new and renewed customer.
    Number of Respondents: 1,590.
    Estimate of Burden: 92,540 hours.
    Respondents: Natural Gas Distribution Operators.
    Estimated Total Annual Burden on Respondents: 58.2 hours (first 
year) 51.9 hours each subsequent year.
    Comments on the information collection requirements should be 
submitted within 30 days of the publication of this notice to: the 
Office of Management and Budget, Office of Information and Regulatory 
affairs, New Executive Office Building, 725 17th St., NW Washington, 
D.C. 20503, Att.: Desk Officer RSPA. Persons are not required to 
respond to a collection of information unless it displays a currently 
valid OMB control number.

Federalism

    This rule will not have substantial effects on states, on the 
relationship between the federal government and the states, or on the 
distribution of power and responsibilities among the various levels of 
government. Therefore, in accordance with E.O. 12612 (52 FR 41685; 
October 30, 1987), RSPA has determined that this rule does not have 
sufficient federalism implications to warrant preparation of a 
Federalism Assessment.

Unfunded Mandates Reform Act

    This rule does not impose unfunded mandates under the Unfunded 
mandates reform Act of 1995. It does not result in costs of $100 
million or more to either State, local, or tribal governments, in the 
aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objective of the rule.

List of Subjects in 49 CFR Part 192

    Pipeline safety, Reporting and recordkeeping requirements.

    In consideration of the foregoing, RSPA amends 49 CFR Part 192 as 
follows:

PART 192--[AMENDED]

    1. The authority citation for Part 192 continues to read as 
follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60110, and 60118; 49 
CFR 1.53.

    2. Part 192 is amended by adding Sec. 192.383 to read as follows:


Sec. 192.383  Excess flow valve customer notification.

    (a) Definitions. As used in this section:
    Costs associated with installation means the costs directly 
connected with installing an excess flow valve, for example, costs of 
parts, labor, inventory and procurement. It does not include 
maintenance and replacement costs until such costs are incurred.
    Replaced service line means a natural gas service line where the 
fitting that connects the service line to the main is replaced or the 
piping connected to this fitting is replaced.
    Service line customer means the person who pays the gas bill, or 
where service has not yet been established, the person requesting 
service.
    (b) Which customers must receive notification. Notification is 
required on each newly installed service line or replaced service line 
that operates continuously throughout the year at a pressure not less 
than 68.9 m (10 psig) and that serves a single residence. On these 
lines an operator of a natural gas distribution system must notify the 
service line customer once in writing.
    (c) What to put in the written notice. (1) An explanation for the 
customer that an excess flow valve meeting the performance standards 
prescribed under Sec. 192.381 is available for the operator to install 
if the customer bears the costs associated with installation;
    (2) An explanation for the customer of the potential safety 
benefits that may be derived from installing an excess flow valve. The 
explanation must include that an excess flow valve is designed to shut 
off the flow of natural gas automatically if the service line breaks;
    (3) A description of installation, maintenance, and replacement 
costs. The notice must explain that if the customer requests the 
operator to install an EFV, the customer bears all costs associated 
with installation, and what those costs are. The notice must alert the 
customer that costs for maintaining and replacing an EFV may later be 
incurred, and what those costs will be, to the extent known.
    (d) When notification and installation must be made.
    (1) After February 3, 1999 an operator must notify each service 
line customer set forth in paragraph (b) of this section:
    (i) On new service lines when the customer applies for service.
    (ii) On replaced service lines when the operator determines the 
service line will be replaced.
    (2) If a service line customer requests installation an operator 
must install the EFV at a mutually agreeable date.
    (e) What records are required.
    (1) An operator must make the following records available for 
inspection by the Administrator or a State agency participating under 
49 U.S.C. 60105 or 60106:
    (i) A copy of the notice currently in use; and
    (ii) Evidence that notice has been sent to the service line 
customers set forth in paragraph (b) of this section, within the 
previous three years.
    (2) [Reserved]
    (f) When notification is not required.
    The notification requirements do not apply if the operator can 
demonstrate--
    (1) That the operator will voluntarily install an excess flow valve 
or that the state or local jurisdiction requires installation;
    (2) That excess flow valves meeting the performance standards in 
Sec. 192.381 are not available to the operator;
    (3) That an operator has prior experience with contaminants in the 
gas stream that could interfere with the operation of an excess flow 
valve, cause loss of service to a residence, or interfere with 
necessary operation or maintenance activities, such as blowing liquids 
from the line.
    (4) That an emergency or short time notice replacement situation 
made it impractical for the operator to notify a service line customer 
before replacing a service line. Examples of these situations would be 
where an operator has to replace a service line quickly because of--
    (i) Third party excavation damage;
    (ii) Grade 1 leaks as defined in the Appendix G-192-11 of the Gas 
Piping Technology Committee guide for gas transmission and distribution 
systems;
    (iii) A short notice service line relocation request.

    Issued in Washington, D.C. on January 27, 1998.
Kelley S. Coyner,
Acting Administrator .
[FR Doc. 98-2496 Filed 2-2-98; 8:45 am]
BILLING CODE 4910-60-P