TITLE
Recommendation to adopt resolution authorizing City Manager to adjust certain rates for natural gas service to reflect market conditions by implementing Gas Rate Schedules 1 through 5, 7, and 9, plus readopt Exhibits A and B. (Citywide)
DISCUSSION
Long Beach Gas and Oil (LBGO) operates and maintains a pressurized natural gas pipeline system that consists of over 1,900 miles of aging underground pipeline and nearly 150,000 natural gas meters. The pipeline system includes both steel and plastic pipeline, with the bulk of the current pipeline system installed in the 1930s, 1940s, 1950s, and 1960s, with some pipeline from the 1920s still in operation. Detailed historical leakage records of LBGO’s pipeline system clearly demonstrate the relationship between the age of the pipeline and the vulnerability to leakage. With an aging pipeline system, it is imperative that LBGO continually reinvest gas ratepayer revenues into the pipeline infrastructure to maintain safe operation.
From that same safety perspective, federal and state regulators nationwide have increased their oversight of how natural gas utility systems are operated and maintained. Under the U.S. Department of Transportation, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has recently established integrity management requirements for the nation’s gas distribution systems. New regulations require gas utilities to develop and implement a Gas Distribution Integrity Management Program (DIMP) that address vulnerabilities to its gas pipeline system. The DIMP report includes benchmarked performance measurements such as the number of gas leaks, age of pipe, and replacement program. PHMSA regularly sends auditors to inspect and review LBGO’s operations and documentation to verify that LBGO is complying with all federal regulations and performing the actions described in the DIMP necessary to maintain a safe pipeline system.
Compliance with these and other regulatory demands for inc...
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