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Dixie Withdraws Tariffs 92 and 93
On Friday, December 12, Dixie Pipeline Company filed a notice with the Federal Energy Regulatory Commission (FERC) withdrawing its tariff proposals related to shipments of propane and refinery grade propylene (RGP). On July 25, 2008, Dixie had proposed to remove the priority for eastbound shipments of propane to allow for increased westbound shipments of RGP into Mt. Belvieu from points in Louisiana. Tariffs 92 and 93 were protested by several shippers on the line, and NPGA intervened as well on behalf of marketers and consumers. FERC scheduled a Technical Conference to work out differences between the two sides, but it was postponed twice to allow for settlement discussions to continue. While NPGA is pleased with the result, the industry should be aware that Dixie may file revised tariffs at any time. NPGA will continue to analyze proposals to ensure that supplies are assured, that contamination is minimized, that communications about contamination issues is rapid, and that allocation methodologies are fully vetted.
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DHS Announces Submittal Deadline Extension
Earlier today NPGA was notified by the Department of Homeland Security (DHS) that the deadline by which Tier 4 regulated facilities need to submit their Security Vulnerability Assessments has been extended to January 12, 2009 from December 31, 2008. No reason for the extension was provided, and the extension will not be published in the Federal Register. DHS advises on its Web site that if you have already submitted your SVA, you do not need to take further action at this time. If you have any questions regarding submission of the SVA or ASP for your facility, please contact the CSAT Help Desk at csat@dhs.gov or 1-866-323-2957.
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NPGA Opposed DIMP Proposal for Propane Pipelines
NPGA argued strongly against a proposal by the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) to require gas distribution integrity management programs (DIMP) for distribution pipelines, including jurisdictional propane pipeline systems.
The proposal specifies that pipeline operators must have developed a written integrity management plan that would contain a minimum of five elements as follows: infrastructure knowledge, threat identification (e.g. corrosion, excavation damage, etc.), identification and implementation of measures to mitigate risks, performance measures on programs effectiveness, and periodic evaluation. There is also a recordkeeping requirement.
PHMSA recognized the limitations of smaller pipelines operators, such as propane operators. Nevertheless, NPGA opposed the DIMP proposal and urged that jurisdictional propane pipeline operators be exempted from the requirements for several reasons as noted below.
There is no perceived safety benefit from the proposed DIMP requirements. The agency already acknowledges that these systems are simple and pose relatively little risk. NPGA believes that no safety condition exists that warrant additional regulations beyond what already exists at the state and federal level. Further, this additional layer of regulatory burden will likely result in propane marketers altering existing systems to fall below the arbitrary threshold of a jurisdictional system to avoid compliance.
Finally, NPGA noted that the most recent edition of NFPA 58 contains provisions for Small LP-Gas systems that address some of the most important aspects of the proposed rule in addition to the provisions that already exist in the document’s Operations and Maintenance sections Also, existing PHMSA regulations state that NFPA 58 prevails when there is conflict between the PHSMA and NFPA regulations, and this idea reflects the overall primacy of NFPA 58.
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Major Wins For Propane As Financial Rescue Bill Extends Propane Tax Credits
In a major public policy victory for the propane industry, President Bush signed into law omnibus financial rescue legislation on October 3 that contained three high priority propane tax credit extensions. Specifically, the bill extended the 50-cent-per-gallon fuel tax credit through the end of 2009, and the propane refueling infrastructure tax credit through the end of 2010. In addition, the tax credits assisting homeowners with the purchase of high efficiency propane furnaces and water heaters were extended through 2009. *Please Note: These extenders begin in 2009 and DO NOT apply for 2008.
Our industry was one of only a handful to achieve such favorable treatment in this legislation.
This enactment culminated weeks of maneuvering on Capitol Hill as Republicans battled Democrats, the Senate battled the House, and Congress battled the Administration. Both the Senate and the House had passed different versions of energy legislation, and it was never certain that both sides would be able to agree on language to send to the President. In the end however, it was the Senate that first attached the energy tax credit extenders to the financial rescue bill in an attempt to “sweeten” it enough to ensure passage.
In addition, as part of a Continuing Resolution that will maintain funding of the federal government through March 6, 2009, Congress appropriated $5.1 billion for the Low-Income Housing Energy Assistance Program (LIHEAP). This is the first time the LIHEAP program has been funded at the fully authorized level. Although actual funds are distributed through individual state programs, NPGA believes that full funding of LIHEAP will provide much needed support to propane customers this winter heating season.
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