[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79362-79364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22118]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
[Docket No. PHMSA-2024-0151]
Pipeline Safety: Proposed Project-Specific Waiver of the Build
America, Buy America Act Requirements for City Utilities of
Springfield, Missouri for Certain Products
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).
ACTION: Notice; request for comments.
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SUMMARY: The Pipeline and Hazardous Materials Safety Administration
(PHMSA) proposes to waive the Build America, Buy America (BABA) Act's
domestic preference requirements for certain products that City
Utilities of Springfield (City Utilities) will use in its Natural Gas
Distribution Infrastructure Safety and Modernization (NGDISM) grant
project. The proposed waiver would exempt the following products used
in City Utilities' project from BABA requirements on the basis of
nonavailability: locator markers; meter stops with insulated unions;
magnesium anodes; 1A meter swivels, nuts, and washers; and direct bury
lugs. In accordance with section 70914(c) of BABA, PHMSA is seeking
public comments on the proposed waiver.
DATES: Comments must be received by October 15, 2024.
ADDRESSES: Please submit your comments to the Federal eRulemaking
Portal at http://www.regulations.gov, Docket No. PHMSA-2024-0151, and
follow the online instructions for submitting comments.
Instructions: You must include the agency name and docket number at
the beginning of your comments. Except as described below under the
heading ``Confidential Business Information,'' all submissions
received, including any personal information provided, will be posted
without change or alteration to http://www.regulations.gov. For more
information, you may review the U.S. Department of Transportation's
complete Privacy Act Statement published in the Federal Register on
April 11, 2000, (65 FR 19477).
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Mr. Brandon Hollingshead, PHMSA Office of the Chief
Counsel, 202-366-4400, or via email at [email protected].
Office hours for PHMSA are from 8:30 a.m. to 5 p.m., E.T., Monday
through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
A copy of this Notice, all comments received on this Notice, and
all background material may be viewed online at http://www.regulations.gov using the docket number listed above. Electronic
retrieval help and guidelines are also available at http://www.regulations.gov. An electronic copy of this document also may be
downloaded from the Office of the Federal Register's website at:
www.FederalRegister.gov and the Government Publishing Office's website
at: www.GovInfo.gov.
Confidential Business Information
Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
this notice contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to this notice, it is important that you
clearly designate the submitted comments as CBI. You may ask PHMSA to
give confidential treatment to information you give to the agency by
taking the following steps: (1) mark each page of the original document
submission containing CBI as
[[Page 79363]]
``Confidential''; (2) send PHMSA, along with the original document, a
second copy of the original document with the CBI deleted; and (3)
explain why the information you are submitting is CBI. Unless you are
notified otherwise, PHMSA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this Notice. Submissions containing CBI should be sent to:
Mr. Brandon Hollingshead, PHMSA, 1200 New Jersey Avenue SE, E26-316,
Washington, DC 20590. Any comment submissions that PHMSA receives that
are not specifically designated as CBI will be placed in the public
docket for this matter.
Background and Justification for Waiver
The NGDISM program was authorized by the Infrastructure Investment
and Jobs Act (IIJA) (Pub. L. 117-58). The program provides Federal
funding to municipal- or community-owned natural gas utilities (not
including for-profit entities) to repair, rehabilitate, or replace
their natural gas distribution pipeline systems or portions thereof, or
to acquire equipment to (1) reduce incidents and fatalities and (2)
avoid economic losses. The IIJA appropriates $200 million per year for
each of Fiscal Years (FY) 2022 through 2026 for the NGDISM program ($1
billion in total). The IIJA provides that 2 percent of this amount
shall be used to pay the administrative expenses of the NGDISM program.
Accordingly, the total amount expected to be awarded as grant funding
over the five-year period is $980,000,000. In FY2022, PHMSA awarded
approximately $196 million to 37 municipal- and community-owned natural
gas utilities across the nation to fund pipeline replacement projects
and the purchase of leak-detection equipment.
Congress also enacted the Build America, Buy America Act (BABA),
providing that ``none of the funds made available for a Federal
financial assistance program for infrastructure . . . may be obligated
for a project unless all of the iron, steel, manufactured products, and
construction materials used in the project are produced in the United
States.'' IIJA, Public Law 117-58, section 70914(a). Under IIJA section
70914(b), PHMSA has authority to waive the requirements of BABA (1) if
a domestic product is unavailable, (2) if using a domestic product
would present an unreasonable cost, or (3) if application of BABA would
not be in the public interest.
In FY2022, City Utilities was awarded $10 million in NGDISM grant
funding to help fund its ``Legacy Plastic Pipe Replacement Project,''
which it initiated in 2010. City Utilities operates approximately 500
miles of ``Aldyl A'' plastic distribution pipeline within disadvantaged
areas of Springfield, Missouri. Aldyl A is a type of plastic commonly
used in gas pipelines in the 1960s and 1970s. Aldyl A has since been
found to be susceptible to premature brittle-like failures when
subjected to stress intensification, presenting a high risk of leakage
and associated safety hazards. Additionally, the Aldyl A pipe operated
by City Utilities lacks continuous tracer wire, which is used to locate
underground pipelines prior to excavation to avoid damaging the
pipelines in the course of excavation. The $10 million awarded would
allow City Utilities to speed up its Legacy Plastic Pipe Replacement
Project by funding the replacement of approximately 13.7 miles of
legacy Aldyl A pipe and approximately 1,409 legacy plastic gas services
with modern, industry-standard polyethylene pipe. City Utilities will
also use the grant funds to install a locator system on the new
pipeline, allowing the pipe to be located during subsequent excavations
near the pipeline, thereby ensuring the pipe is not damaged.
On December 13, 2023, City Utilities issued an Invitation for Bids
(IFB) seeking, among other products, locator markers; meter stops with
insulated union; magnesium anodes; 1A meter swivels, nuts, and washers;
and direct bury lugs. A more detailed description of each of these
products is provided below:
Locator Markers: Locator markers are small devices placed
on buried pipe and valves designed to help operators locate the
infrastructure before excavation to help prevent damage to the pipe
from excavation equipment. (NAICS: 325211)
Meter Stops with Insulated Union: Meter Stops are valves
that are installed above a natural gas riser upstream of the meter to
serve as a shut-off valve to control the flow of gas into the meter and
subsequently into the building's gas system. They are crucial for
maintenance, emergencies, or when the gas service needs to be shut off.
Insulated Unions are fittings attached to the above ground portion of a
natural gas utility riser in order to electrically insulate (i.e.,
isolate) a structure from the pipeline system to prevent corrosion.
(NAICS: 332919)
Magnesium Anodes: Magnesium anodes are blocks of magnesium
that are attached to steel pipe in order to protect against corrosion
damage. (NAICS: 335999)
1A Meter Swivels, Nuts, and Washers: Meter swivels, nuts,
and washers are fasteners used to secure a gas meter assembly. (NAICS:
33251/332722)
Direct Bury Lugs: Direct Bury Lugs are waterproof
connectors used for splicing low-voltage wires, like those used in
tracer wire, without cutting the main line wire. They simplify
installation and increase the longevity of the connection with pre-
filled silicone sealant for waterproofing. (NAICS: 332999)
The IFB remained open for more than a month, between December 13,
2023, and January 15, 2024. In response to the IFB, City Utilities
received seven responsive bids. However, each of the respondents to the
IFB represented that they would not be able to certify compliance with
BABA requirements for the above listed products.
Additionally, prior to City Utilities requesting this waiver, PHMSA
independently engaged the supplier scouting services of the National
Institute of Standards and Technology Manufacturing Extension
Partnership (NIST MEP) to search for domestic manufacturers of 1A meter
swivels, nuts, and washers. At the conclusion of the process, NIST MEP
identified several companies who stated they had the capability to
manufacture these products. However, these companies declined to do so
because it would be cost prohibitive for them to begin domestic
manufacture of these products in the quantities that City Utilities
needs to purchase for its NGDISM project. Accordingly, supplier
scouting did not result in identification of any sources that could or
would manufacture these products domestically.
On these bases, PHMSA has determined that locator markers, meter
stops with insulated unions, magnesium anodes, 1A meter swivels, nuts,
and washers, and direct bury lugs are not manufactured in the United
States in sufficient and reasonably available quantities or of a
satisfactory quality.
Proposed Waiver and Request for Comments
PHMSA proposes to waive the requirements of BABA for the above
listed products for City Utilities' Legacy Plastic Pipe Replacement
Project funded by NGDISM grant funds. The waiver would be applicable
only to City Utilities' project; it would not be applicable to any
other NGDISM grant recipient's projects. The proposed waiver would be
effective from the effective date of the final waiver through
[[Page 79364]]
the period of performance and closeout of PHMSA financial assistance
for the project, estimated to be February 21, 2028. If the sources of
Federal financial assistance applied to the project are changed, PHMSA
will consider whether the waiver continues to be warranted, taking into
account the project's development status at that time and any changes
in market conditions for the products subject to the waiver.
Although City Utilities was awarded $10 million in NGDISM grant
funding in FY2022, the majority of funding in NGDISM projects typically
goes towards labor costs rather than materials costs. City Utilities
estimates that for its FY2022 project the total cost of the products
proposed to be waived equals approximately $72,000, divided across five
types of products. NIST MEP identified several companies who have the
capability to manufacture 1A meter swivels, nuts, and washers, yet
declined to do so after engagement with City Utilities on the grounds
that it would be cost prohibitive to manufacture these products at the
relatively small scale needed by City Utilities.
By contrast, the proposed waiver would have a large impact on City
Utilities' ability to successfully complete its NGDISM project and
deliver meaningful safety benefits to disadvantaged areas of
Springfield, MO. All of the products listed herein are essential to the
proper construction of a natural gas distribution pipeline. If this
waiver is not approved, City Utilities' project will not be completed
successfully. Additionally, City Utilities estimates that its total
materials costs for the project will equal approximately $800,000. The
cost of the products proposed to be waived therefore equates to 9
percent of City Utilities' total materials costs, which is above the
five percent threshold applicable to DOT's Waiver of Buy America
Requirements for De Minimis Costs and Small Grants (88 FR 55817).
Under OMB Memorandum M-24-02, agencies are expected to assess
``whether a significant portion of any cost advantage of a foreign-
sourced product is the result of the use of dumped steel, iron, or
manufactured products or the use of injuriously subsidized steel, iron,
or manufactured products'' as appropriate before granting a public
interest waiver. PHMSA's analysis has concluded that this assessment is
not applicable to this waiver, as it is being proposed on the basis of
nonavailability, rather than public interest or unreasonable cost.
PHMSA will consider all comments received in the initial 15-day
comment period during our consideration of the proposed waiver, as
required by Section 70914(c)(2) of the IIJA. Comments received after
this period, but before notice of our finding is published in the
Federal Register, will be considered to the extent practicable.
Issued in Washington, DC, on September 23, 2024, under authority
delegated in 49 CFR 1.97.
Tristan H. Brown,
Deputy Administrator.
[FR Doc. 2024-22118 Filed 9-26-24; 8:45 am]
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