RULES AND REGULATIONS

Title 52—PUBLIC UTILITIES

PENNSYLVANIA PUBLIC UTILITY COMMISSION

[ 52 PA. CODE CH. 59 ]

[ L-2009-2107155 ]

Meter Location

[44 Pa.B. 5835]
[Saturday, September 13, 2014]

 The Pennsylvania Public Utility Commission (Commission), on May 22, 2014, adopted a final rulemaking order which amends § 59.18 (relating to meter, regulator and service line location) to be consistent with Federal regulations.

Executive Summary

 The Commission is amending its existing regulations at 52 Pa. Code § 59.18 that are currently limited with respect to providing regulatory requirements for meters, regulators and service line locations. Specifying mandatory requirements for meter, regulator and service line locations is necessary to protect the safety of the public and, therefore, is in the public interest. The regulation provides a general rule that meters and regulators shall be located outside and aboveground, and that the utility shall provide written notice of a relocation. The regulation addresses where meters and regulators can be located and factors that must be considered in locating meter sets. Consideration is also given to inside meter locations that satisfy certain requirements. However, the utility will continue to retain discretion in applying this regulation. Gas utilities shall have 20 years from the effective date of this regulation to complete replacement of existing facilities in compliance with the requirements of the regulation or incorporate the requirements of the regulation in a distribution integrity management plan, whichever occurs first.

Public Meeting held
May 22, 2014

Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; James H. Cawley; Pamela A. Witmer; Gladys M. Brown

Amendment to 52 Pa. Code § 59.18 Meter Location;
Doc. No. L-2009-2107155

Final Rulemaking Order

By the Commission:

 In accordance with Section 501 of the Public Utility Code, 66 Pa.C.S. § 501, the Commission formally commenced a rulemaking process to amend its existing regulations at 52 Pa. Code § 59.18 ''Meter Location.'' On July 28, 2011, the Commission issued a Proposed Rulemaking Order deleting the current provisions and proposing new language for the regulation. Specifically, this review was to address meter placement and location and general requirements for new service lines. Comments were filed by various interested parties, including the Independent Regulatory Review Commission. The Commission reviewed those comments and issued an Advanced Notice of Final Rulemaking Order on September 13, 2013. Comments were again filed by various interested parties. The Commission has reviewed those comments, as well as all comments filed to its Proposed Rulemaking Order, and issues this Final Rulemaking Order.

Background and Procedural History

 On August 21, 2008, the Commission directed the Bureau of Transportation, Gas Safety Division, to institute an investigation into the issue of gas meter placement and relocation in the context of service disputes between gas distribution companies and their customers. Pursuant to the Commission's directive, the Gas Safety Division reviewed existing regulations and tariff language on meter location. The Gas Safety Division concluded that the Commission's existing regulation is vague, inadequate, and out-of-date with respect to the federal standards which the PUC has adopted.

 The issue of gas meter placement and relocation in the context of service disputes between Natural Gas Distribution Companies (NGDCs) and their customers came before the Commission in two cases. Mitchell v. Equitable Gas Company, Docket No. C-20077457 (Opinion and Order entered January 22, 2009); Lucas v. Columbia Gas Company of Pennsylvania, Inc., Docket No. C-20065830 (Order entered June 3, 2008). In both cases, the meter relocation occurred due to a discovery and repair of leaking service lines. Each case involved a customer complaint filed after the utility charged for relocating the meter.

 Specifically, customers had objected to being charged for the relocation of meters from inside their residences to an exterior location, and sought reimbursement of associated costs. The gas line from the meter outlet valve is considered customer owned property. Therefore, when the meters were relocated outside, the customer line was lengthened. Normally, a homeowner would have to contract with an Operator Qualified plumber to extend the house line outside to the meter. In the instances where the customers objected to the relocation of the meters, the NGDC required the meter to be relocated due to safety concerns.

 After reviewing these and other cases, the Commission approved a motion finding that its regulations and the tariff provisions of gas utilities vary significantly:

[I]t is evident that there is ambiguity with respect to meter placement and relocation . . . [and] it is critically important that our regulations and company tariffs provide clear direction on meter location issues to ensure safe and reliable service.

As much of Pennsylvania's natural gas infrastructure is aging and a number of gas utilities are in the process of embarking on significant infrastructure replacement initiatives, it is an opportune time to assess the meter relocation policy to enable gas utilities to more efficiently address this issue in the context of these programs and to ensure safe and reliable service.¹

 The Commission then directed the Gas Safety Division to undertake a review of the regulations and to prepare a report with any recommendations.

 Before discussing the Gas Safety Division's report, it is noteworthy that the Commission's only regulation governing gas meter location reads:

52 Pa. Code § 59.18 Location of meters.

Meters shall be installed in either of the following locations:

1. Inside the building, preferably in a dry, well-ventilated place not subject to excessive heat, and as near as possible to the point of entrance of the pipe supplying service to the building.

2. Outside the building at a location selected by the utility. A meter cover or housing is required if, in the judgment of the utility, conditions require the physical protection for the meter installation.

 The U.S. Department of Transportation (DOT) regulations, which the Commission has adopted² and enforces pursuant to an agreement with the Pipeline and Hazardous Material Safety Administration (PHMSA), include the following:

49 CFR § 192.353 Customer meters and regulators: Location.

(a) Each meter and service regulator, whether inside or outside a building, must be installed in a readily accessible location and be protected from corrosion and other damage, including, if installed outside a building, vehicular damage that may be anticipated. However, the upstream regulator in a series may be buried.

(b) Each service regulator installed within a building must be located as near as practical to the point of service line entrance.

(c) Each meter installed within a building must be located in a ventilated place and not less than 3 feet (914 millimeters) from any source of ignition or any source of heat which might damage the meter.

(d) Where feasible, the upstream regulator in a series must be located outside the building, unless it is located in a separate metering or regulating building.

49 CFR § 192.357 Customer meters and regulators: Installation.

(a) Each meter and each regulator must be installed so as to minimize anticipated stresses upon the connecting piping and the meter.

(b) When close all-thread nipples are used, the wall thickness remaining after the threads are cut must meet the minimum wall thickness requirements of this part.

(c) Connections made of lead or other easily damaged material may not be used in the installation of meters or regulators.

(d) Each regulator that might release gas in its operation must be vented to the outside atmosphere.

 The Commission's Gas Safety Division, in conjunction with the Law Bureau, implemented an investigation regarding meter set (meter and regulator) location. The Gas Safety Division issued ten data requests to the ten largest gas utilities under PUC jurisdiction. The data requests included questions related to the number of inside/outside meter sets, inside regulators, tariff language, inside meter set leak calls, reportable incidents associated with inside meter sets, meter relocation charges, inside leak surveys, and local ordinances requiring certain meter locations. All ten gas utilities responded. The data revealed that the Pennsylvania natural gas industry has approximately 27% of all meter sets located inside of residential dwellings. This average has been consistent over the last five years.

 All the tariffs for the solicited utilities have tariff rules governing the location of meter sets. Each tariff states that the utility will make the ultimate siting determination. The basis for the utility decision for meter and regulator location is safety. The majority of the tariffs include language that allows for exceptions to outside siting. Allowance for inside meter and regulator sets are based upon historic area prohibitions and areas that have high amounts of vandalism.

 The Commission is also concerned about the number of reportable incidents resulting, at least partially, from locating meters and regulators inside structures. The gas distribution utilities reported more than 4,000 leaks occurring on inside meter sets over a five year period. The number of reportable incidents³ (65) over the past forty years, however, is more alarming. While it appears from the data that the inside meter and regulators were not always the primary factor for accidents, locating meters and regulators inside certainly contributed to these incidents through a release of natural gas. State and federal gas safety regulations require gas utilities to perform leak surveys over service lines periodically; however, several of the utilities reported that they could not comply with the leak survey requirements when the meter and regulator are inside a building which prevents access. This is troubling because the state and federal regulations require leak surveys up to the meter. By not having access to the meter sets, the NGDCs cannot comply with the state and federal regulations and cannot detect inside leaks.

 The state has experienced several gas explosions related to steel service lines being struck and pulled up from their stable position and subsequently pulling the service line from the inside meter set. Plastic service lines with inside meter sets do not pull away since the excavation equipment usually severs the line immediately after being struck. The combination of steel service line and inside meter set is a high risk factor for natural gas incidents.

 The responding NGDCs also addressed the cost of moving meter sets from the inside to the outside. In most instances, if the customer requests a meter set relocation, the customer pays for the extension of the customer piping up to the outlet valve of the meter set. But the utilities have multiple exceptions as to who pays. Under federal regulations, Operator Qualified plumbers are the only plumbers who may perform work on service lines and meters. The Operator Qualified plumbers are certified and tested by the specific gas utility.

 If a meter set is to be moved outside and the meter set was connected to a steel service line, the NGDC would replace the steel service line and move the meter set outside where practical. The cost of replacing the steel service line and moving the meter set outside is approximately $4,000 per unit. The average cost of moving only a meter set from inside to outside is approximately $500. UGI Utilities, Inc. (UGI) opined that most of the steel service lines with inside meter sets were connected to bare steel or unprotected steel mains which would also need to be replaced and would increase the cost.

 Therefore, if an NGDC is replacing a natural gas main in accordance with its main replacement program, the NGDC should make all reasonable efforts to replace the bare or unprotected steel service lines in addition to relocating the meter set. In 2008, Columbia Gas of Pennsylvania, Inc. (Columbia) requested limited waivers of the tariff rules relating to customer service line replacement.⁴ According to Columbia's existing tariff, certain customers are responsible for the installation, maintenance, and replacement of their service lines. We agreed it would be inequitable to require these customers to replace their service lines at the customers' expense when the replacement was required by Columbia's main replacement and upgrade project. Thus, it would be prudent and more cost effective for NGDCs to coordinate their meter set relocation program (including steel service line replacement when necessary) with their main replacement program.

 There are several alternatives, however, to relocation and replacement of inside meter sets and steel service lines. One alternative is to retrofit existing service lines with Excess Flow Valves (EFV). An EFV is a device that reduces gas flow in the event that a pipe fails beyond the valve. EFVs are currently mandated for all new and replaced service lines by federal law. See 49 U.S.C. 60110, 49 CFR § 192.383. We have adopted the Federal regulation. See 52 Pa. Code § 59.33(b). The cost of retrofitting a steel service line with EFV is approximately $1,500.

 Another alternative to relocation and replacement is to relocate the inside regulator to the outside. The majority of NGDCs do not allow inside regulators; however, the companies that do allow them include UGI, PECO Energy Company (PECO), and Philadelphia Gas Works (PGW). The relocation of the inside regulator costs approximately $450.

 Finally, several utilities provide service in historic districts where municipal laws may require the meter set to be located inside structures.⁵ In some instances, the utilities may be able to locate the regulator outside; however, it was represented that there are instances when the utility must locate the entire meter set inside due to zoning ordinances. In addition, some utilities may locate meter sets inside due to vandalism concerns.

 After review of the state and federal regulations pertaining to meter set location, gas distribution tariffs, and after meeting with the gas utilities and reviewing the data responses, Gas Safety concluded the following:

 1. The Pennsylvania regulations at § 59.18 are silent as to reimbursement costs related to relocation of meters.

 2. The Commission has adopted provisions of the Code of Federal Regulations, which address the safety issues related to meter set location and installation and thus are in conflict with the existing Pennsylvania regulations.

 3. The collected data show that Pennsylvania has experienced 65 reportable incidents associated with inside meter sets and inside regulators over the last 40 years.

 4. The gas distribution utilities have had more than 4,000 leaks related to inside meter sets over the last five years.

 5. Several of the gas distribution utilities assert they cannot comply with the state and federal regulations pertaining to leakage surveys because they cannot get access to inside meter sets.

 6. Inside meter sets with inside regulators are a major concern due to the possibility of high pressure gas flowing into a structure if the inside meter or inside regulator is detached from the service line. Three gas distribution utilities have high numbers of inside meter sets with inside regulators that are at higher risk for failure because the inside meter and regulator are connected to a steel service line. Steel service lines are susceptible to pulling from excavation equipment. Pennsylvania has experienced several catastrophic explosions due to steel service lines pulling away from inside meter sets and inside regulators.

 Ultimately, Gas Safety concluded that the Commission's existing regulation at 52 Pa. Code § 59.18 is vague, inadequate, and out-of-date with respect to the federal standards which the Commission has adopted.

 Therefore, on July 28, 2011, the Commission adopted and entered a Proposed Rulemaking Order titled ''Rulemaking Re Amendment to 52 Pa. Code § 59.18 Meter Location.'' As indicated previously, the Commission addressed meter placement and location and general requirements for new service lines. The Commission proposed deleting the current provisions and adding new language for the regulation. The Order was published in the Pennsylvania Bulletin on June 16, 2012. Comments were filed by approximately 44 interested parties, including the Independent Regulatory Review Commission (IRRC), and numerous letters were also filed by individual homeowners.

Comments to the Proposed Rulemaking Order

 Essentially, the consensus of the utility industry's comments to the proposed regulations is that changes to existing provisions are unnecessary because the Commission's regulations are already consistent with Federal regulations and that the proposed rules are inconsistent with Federal regulations and impose new additional regulatory requirements. Furthermore, some of the utilities and the Energy Association of Pennsylvania (EAP) contend that the proposed regulation is based on the Gas Piping Technology Committee's (GPTC) Guide for Gas Transmission and Distribution Piping Systems (Guide or Guide Material) which is advisory in nature and not meant to be a regulation. Moreover, NGDCs are concerned about any removal of a utility's discretion in meter placement. It was suggested that relocation should be coordinated with the utility's established main replacement program and schedule, and that, specifically, utilities should not have to replace indoor regulators connected to steel service lines by 2020, as required in the proposed regulation. Utilities also seek clarification whether this regulation, if adopted, would apply to meter sets installed after the effective date of this proposed regulation since a number of new requirements are not requirements of meter sets today.

 The general comments of historical commissions and boards, private citizens, preservation groups, civic associations, and government entities and officials is that meters and regulators should remain in the basements of properties within historic districts to preserve beauty and uniqueness of these areas. Also, moving meters outside will risk damage to the units caused by vehicles hitting meters and tampering, among other occurrences. Moreover, with the development of remote meter reading devices, some of these parties believe there is not a need to make meters visible in front of historic homes.

 These parties also argue against limiting historic districts to those that are federally recognized. In other words, the definition of ''Historic District'' should specifically include local historic districts designated by municipalities, as well as others locally significant. These parties are also looking for a process for utilities to notify property owners about projects and allow the property owners to participate and make informed decisions about where the meter will be located. It was also recommended to the Commission to develop design guidelines for the appropriate location of meters and regulators. The Pennsylvania Historical and Museum Commission (PHMC) also disagreed with a statement in the Order, asserting that it was unable to identify any locally adopted historic property regulations that stipulate the location of gas meters.

 The IRRC emphasized the point that the Commission established in Section 59.33 that the Code of Federal Regulation (CFR) and its subsequent amendments effectively supersede the Commission's regulations; and since the CFR addresses meter and regulator location, the proposed Section 59.18 raises the issue of ''possible conflict with or duplication of Statues or existing regulations.'' 71 P. S. § 745.5(b)(3)(i). IRRC continues its comments asking the Commission to explain how these mandates support the Commission's stated intent to make Pennsylvania's regulations consistent with federal regulations and reconcile with the Commission's statement that ''the proposed amended language imposes no additional regulatory requirements upon natural gas distribution companies (NGDCs) that these utilities are not already subject to under the federal regulations.''

 IRRC further believes the proposed regulation includes only meter and regulator locations and does not address several of the other safety concerns identified by the Commission in its Order.

 IRRC then notes that the Commission has not explained which state and federal provisions are inconsistent, or how the Commission's regulations could conflict. In order to clearly establish and support this rule- making's intent, IRRC recommends that the Commission review and revise its Preamble and responses in the Regulatory Analysis Form (RAF) prior to submitting a final regulation. IRRC questions the Commission's support for the regulation based on safety concerns stating that the Commission has not addressed excess flow valves as alternatives to relocating inside meter sets outside, or established a direct link between reportable incidents and leaks at inside meters.

 IRRC recommends that the Commission withdraw this regulation. If the Commission does not withdraw the regulation, IRRC recommends that it conduct stakeholder meetings with gas utilities and commentators, including those with knowledge of ordinances regulating historic properties. IRRC also recommends that the Commission publish an advance notice of final rulemaking to allow the public and standing committees the opportunity to review any revisions that the Commission makes to the regulatory language before submittal of a final-form regulation.

Discussion of Comments to the Proposed Rulemaking Order

 In response to IRRCs comments and concerns about the progress of the rulemaking, the Commission published an advance notice of final rulemaking to allow the public and standing committees the opportunity to review the revised regulatory language before submittal of a final form regulation. Advance Notice of Final Rulemaking Order, L-2009-2107155, Public Meeting held September 12, 2013, order entered September 13, 2013; 43 Pa.B. 5705 (September 28, 2013).

 The Commission believed that Section 59.18 is currently limited with respect to providing regulatory requirements for locating meters. The regulation merely provides that meters can be installed inside or outside the building with a few location requirements. Our Proposed Rulemaking Order (page 1) acknowledged that the existing regulation is inadequate. IRRC notes that the Commission in Section 59.33 adopts the pipeline safety laws including 49 CFR Parts 191—193, 195 and 199 that address meter and regulator location. We did not believe that our adoption of these minimum safety standards in Section 59.33(b) conflicts or duplicates the proposed regulation. Section 59.33(b) is clear that the Federal regulations are the minimum safety standards that apply to natural gas public utilities.

 While the CFR might address similar provisions in terms of subject matter to the proposed regulations, the specific requirements are not the same. In fact, we agreed with the commentators that the proposed Section 59.18 is taken, largely, from the Guide Material and not the Federal regulations. The proposed regulation relies heavily on the Guide Material for structure and substance. That being said, we disagreed that the language is inflexible and leaves no room for utility discretion. We believed that any limitation of an NGDC's discretion through this regulation is in the public interest. We submitted that specifying mandatory requirements for meter, regulator, and service line locations is necessary to protect the safety of the public and, therefore, is in the public interest. However, the proposed regulation allowed the utility in many instances to deviate from the general rule or requirement if it is not ''feasible and practical to do so.'' The utility will retain discretion in applying this regulation.

 Our adoption of the CFR under Section 59.33(b) sets the minimum safety standards for all natural gas and hazardous liquid public utilities. Therefore, Section 59.33(b) does not prohibit the Commission from imposing additional regulatory safety requirements. Although there are additional requirements, we believed that the additional regulatory requirements are all in the public interest. In effect, the proposed regulation does impose additional regulatory requirements for utilities, whereas the Guide Material made them discretionary. Therefore, we agreed that statements to the contrary in the RAF were incorrect and we will make the appropriate corrections.

 We further noted IRRC's comment that the proposed regulation includes only meter and regulator location and does not address several other safety concerns identified in the Preamble (Order). The issue of access to inside meters to conduct leak surveys up to the meter is raised by IRRC. We believed that reasonable access by the utility to its facilities should be addressed in the utility's tariff. We also addressed the safety issue with respect to steel service lines pulled from a stable position with the regulations that provide for the placement of the regulator outside the building. Finally, the use of excess flow valves is a safety device used in the industry and, at this point, we are not concerned by any lack of use within the industry to warrant regulatory oversight. However, in addition to noting that federal law already requires EFV installation on all new and replaced service lines, we proposed that excess flow valves must also be installed on all service lines when a meter is located inside.

 The proposed regulations do amend existing regulations and we believe are consistent with the already adopted federal regulations. However, we did not intend to imply in response to RAF questions that we would not address other issues and safety concerns. Furthermore, it was not our intent to imply that the provisions of the CFR are in conflict with existing PUC regulations. Rather than be inconsistent, we believed the proposed regulations supplement our current regulations which adopt the federal regulations.

 Moreover, we did not intend to imply that NGDCs do not have access to meter sets, and that NGDCs cannot comply with state and federal regulations. Gas utilities always have the ability to gain access to their facilities by applying their tariff rules.

 We also questioned the comments that assert homeowners will be adversely affected economically by the additional regulatory requirements. With respect to regulators being relocated outside buildings in historic districts, we believed that it is merely speculation to maintain that the relocated regulators would diminish the property value of the historic resource.

 IRRC believes that the PUC should explain how the final regulation takes into consideration the impact of the location of meters and regulators on NGDCs, homeowners, communities, Pennsylvania's historic resources, and local preservation programs. As indicated previously, IRRC also recommended that the PUC publish an advance notice of final rulemaking to allow the public and standing committees the opportunity to review any revisions that the PUC makes to the regulatory language before submittal of a final-form regulation. IRRC recommended that the PUC review and revise its final rulemaking order and responses in the RAF prior to submitting a final regulation, in order to clearly establish and support the rulemaking's intent that it is in the public interest.

 Attachment One to the Advance Notice of Final Rulemaking Order contained a more extensive summary of the Proposed Rulemaking Order comments from the utility industry, historical commissions and boards, private citizens, preservation groups, civic associations, and government entities and officials. In addition, the general comments of the IRRC to the Proposed Rulemaking Order are summarized and then addressed in a response section. Finally, the specific issues raised by the comments to the specific subsections, paragraphs and subparagraphs of Annex A of the Proposed Rulemaking Order are addressed, discussed, and resolved. In so doing, we have retained language, struck proposed language, and added new language.

 As indicated previously, the Commission issued an Advance Notice of Final Rulemaking Order (ANOFRO) on September 13, 2013. Accordingly, the Order established an additional comment period that ended 30 days from the date of the publication in the Pennsylvania Bulletin, that date being September 28, 2013.

 The Commission welcomed public comments on all revisions to the proposed regulations. We emphasized that parties should use this opportunity to focus on the revisions to the proposed rule, and not to revisit issues already raised in previously submitted comments. We were particularly interested in receiving comments on the costs that would be incurred, and any savings that might be realized by affected parties as the result of these proposed amendments.

General Comments to the Advance Notice of Final Rulemaking Order

 The Energy Association of Pennsylvania (EAP) filed comments first noting that when the issue of meter placement developed, the Commission and the General Assembly were already engaged in policy discussions regarding a more cost-effective and efficient way to fund the necessary replacement of aging utility infrastructure. EAP submits that the Commission recognized that gas utilities needed to initiate infrastructure replacement programs and supported legislation to implement a distribution system improvement charge (DSIC).⁶

 EAP further believes that a utility main replacement program would create the economic and risk management efficiencies needed to consider relocation of inside meters or regulators as contemplated in the proposed amendments. EAP states that stand-alone regulatory mandates are not warranted based on the historical risk of failure associated with inside meters and regulators. According to EAP, the proposed meter location regulations will result in higher costs and the inefficient use of resources that otherwise might be dedicated to the replacement of aging infrastructure, and will not be in alignment with the risk analysis detailed in current natural gas distribution company (NGDC) federally required Distribution Integrity Management Plans (DIMP). EAP submits that under various provisions of federal regulations found at 49 C.F.R. Part 192 (which have been adopted in Pennsylvania at 52 Pa. Code § 59.33), natural gas utilities are required to file DIMP plans which identify, categorize, and rank risks associated with distribution facilities. EAP notes that all the large NGDCs have filed individual LTIIPs under Act 11, all of which have been approved by the Commission. EAP maintains that all of these plans consider meter relocation in the context of larger efforts to replace aging infrastructure. Moreover, EAP comments that the proposed language at section 59.18(d)(1)(iv) which provides that ''[i]nside meter locations shall be considered only when: . . . . (iv) a utility determines that an outside meter location is neither feasible nor practical'' is a cumbersome manner in which to provide the desired flexibility to the gas utility to determine meter location.⁷

 EAP requests that the Commission strike the mandate to relocate all meters and regulators outside within 10 years of the effective date of the proposed amendments and draft new language which seeks to align meter relocation efforts with planned gas utility projects to replace aging infrastructure. According to EAP, the costs associated with the meter and regulator relocation mandate could delay replacement of aging pipeline infrastructure. Moreover, EAP contends that the costs would be considerably higher under the ANOFRO where meter relocation is a stand-alone project mandated to occur in a prescriptive timeframe and not coordinated with either a utility DIMP or LTIIP. Finally, EAP seeks further clarification that costs incurred when customer-owned facilities are extended (or replaced) in the course of relocating a meter will be handled as utility expenses for the purposes of cost recovery.

 EAP states that it has compiled estimates from its members assuming all inside meters and regulators would be relocated over the mandated ten year timeframe without necessarily attempting to identify either historic properties or those in areas with a ''high risk of vandalism'' as exempted under section 59.18(d)(1)(i) and (iii). EAP explains that meters are not currently tracked in that manner and that the cost estimate reflects the incremental cost of adhering to the amended regulation, recognizing that a certain number of meter relocations would occur over the next ten years under current main replacement programs. According to EAP, the fact remains that capital and resources will be diverted to complete work that has a lower risk priority based on gas utility DIMP programs.

 In addition to its own recommendations, EAP supports the specific language changes to particular sections of the amended regulation as suggested by its member NGDCs. EAP also suggests, in line with the recommendations of the IRRC, that a stakeholder group to address continuing concerns regarding the new mandated timeframe for relocating all meter sets and the specific language of the proposed amendments to section 59.18 should be assembled.

 UGI Distribution Companies' (UGI) comments first layout statistical information about its system. UGI has approximately 207,000 inside meters (approximately 1/3 of service locations), 48,600 of which are connected to steel service lines, and tend to be concentrated in older urban areas. As of December 31, 2012, UGI also reported having 196,696 excess flow valves installed on its service lines that tend to be located in areas where UGI has more recently initiated service or where it has more recently replaced gas mains.

 UGI explains that it has implemented the policies of (a) installing contemporary plastic, as opposed to steel or other metal, service lines, (b) placing meters and regulators at outside locations, and (c) installing excess flow valves on new medium pressure service lines. According to UGI, excess flow valves recognize a drop in pressure resulting from an unrestricted flow of gas caused on a medium pressure service line and automatically cut off the flow of gas. UGI submits that under the applicable federal gas safety regulation at 49 C.F.R. § 192.383(b), excess flow valves are not installed on low pressure service lines that operate at a pressure less than 10 pounds per square inch gauge (psig) throughout the year because excess flow valves are generally unable to detect and shut off unrestricted gas flows on such low pressure service lines.

 UGI believes that the most efficient means of replacing service lines and relocating meters and regulators is to perform such tasks (1) when streets and sidewalks are already being opened up to replace mains, (2) when there otherwise is a need to perform an excavation at a service location, such as an excavation to repair a leak, or (3) if the main replacement can be performed in conjunction with local street re-paving efforts or other infrastructure replacement projects that require excavation.

 UGI contends that when service lines are replaced at the time of main replacement the costs of permitting fees and repaving costs can be shared, only one service line tie-in to the main has to be performed, only one excavation has to be performed, only one restoration project has to be performed, and work crews and equipment do not need to be dispatched multiple times. In addition, gas service disruptions to customers and gas service restoration activities only need to be performed one time, only one set of notices and community outreach plans needs to be implemented, and associated disruptions to the municipality and its citizens can be minimized.

 UGI agrees that the costs of replacing a service line, relocating the associated meter, and installing an EFV on medium pressure service lines is approximately $4,000 per service location, as indicated on page 6 of the ANOFRO. However, UGI believes this estimate reflects replacements and relocations performed at the time of main replacement. UGI asserts that the best estimate of the incremental costs of performing these tasks not at the time of main replacement (non-coordinated) would be approximately $5,400, or approximately $1,400 more per service location.

 With respect to the completion deadline, UGI estimates that it is already on schedule to replace approximately 58,000 service lines and relocate the same number of meters within the ten years compliance period proposed in the ANOFRO. UGI explains that if it had to relocate all meters within ten years in a non-coordinated fashion, it would have to perform approximately 149,000 accelerated relocations and associated service line replacements in a non-coordinated fashion at an incremental cost of $1,400 per service location for a total incremental cost of approximately $208.6 million, or approximately $20.9 million per year. Finally, UGI submits that additional indirect costs will be imposed upon municipalities and residents.

 UGI maintains that the ANOFRO would take one element of risk, which rates relatively low in UGI's DIMP analysis, and require a significant re-allocation of resources to address this lower risk issue in an inefficient manner. Moreover, UGI explains that since this rulemaking was initiated, an acceleration of the goals of the ANOFRO has already been achieved by these other means.

 National Fuel Gas Distribution Corporation (NFG) comments that the proposed final rule made various changes to the requirements for locating meters and service regulators and several of the changes provide needed clarity with respect to the appropriate location for meters and service regulators. However, NFG still believes that additional clarity is warranted and has made numerous recommendations with respect to specific provisions of the regulation.

 Columbia Gas of Pennsylvania, Inc. (Columbia) also filed comments and acknowledged that the Commission is headed in the right direction but continues to have concern about the funds that utilities will need to divert from other potentially higher priority risks enumerated in their existing DIMP to accommodate the requirements of the new regulations. According to Columbia, the proposed requirement to move existing inside meter sets outdoors conflicts with existing DIMP priorities. Columbia asserts that its DIMP reflects its highest priority risks as third party damage on main and service lines first, then its first generation assets that will be mitigated as part of the Company's accelerated priority pipe replacement plan for mains and services (e.g. corrosion, and material defect).

 Columbia submits that it has been engaged in an accelerated infrastructure replacement program since 2007 and at no time since the Company initiated that program has the risk associated with inside meter sets risen to a level that requires replacement ahead of the rate of relocation associated with main replacement. Columbia explains that it is actively addressing inside meter sets as part and parcel of its priority pipe replacement program, thus structurally creating new, integrated distributions systems (mains, services, and outside risers) entirely made up of new, plastic, or coated cathodically protected steel systems. According to Columbia, this will allow the Company, in an organized, efficient, cost effective way, using engineering and operating principles of today's standards, to address top risks such as corrosion and aging priority pipe, while also addressing inside meter sets by moving those sets out as the Company replaces its aging main lines. Columbia submits that it will be forced to redirect resources away from higher priority risks and jeopardize Columbia's ability to meet its Commission approved forecasted LTIIP, and notably, does not take into account that Act 11 was passed after these proposed regulations were initiated.

 Columbia notes that its waiver of tariff rules is specifically related to, and is confined to, service lines required to be replaced as part of the Company's main replacement and upgrade project. Without a waiver, or other form of permission to replace customer-owned service lines, Columbia maintains that the cost burden will be on the customers to replace a service line in situations where older service lines are no longer able to hold a pressure test that is performed in conjunction with the relocation of a meter.

 Columbia states that the proposed requirement to move existing meter sets outdoors will result in increased costs with minimal savings, and, therefore, at a minimum, the deadline to comply should be 20 years from the effective date of the regulation and not 10 years. Columbia submits that this will allow it to continue to address its top priority risks and also accommodate the Commission's concerns for inside meter sets.

 In addition, Columbia argues like EAP, UGI, and PGW that the proposed requirement to install excess flow valves as an alternative to relocating inside meters conflicts with low pressure operating system areas. Columbia explains in more detail that excess flow valves are a cartridge-like valve that is fitted within the pipe that stops the flow of gas when a line ruptures or is damaged, such as when severed by an excavator, creating a very high flow rate. Columbia explains further that EFVs are triggered by a pressure differential that cannot be created with a low-pressure operating system like Columbia still has today in some areas. According to Columbia, when service lines are replaced or installed on a pressure system operating at less than 10 psig and it is planned to be uprated to greater than 10 psig, EFVs can be installed before the uprate. However, Columbia submits that it is unlikely that EFVs will activate if outside of their functioning parameters thereby negating the purpose of installing an EFV to begin with. Moreover, under certain design parameters, such as a lengthy customer service line operating on a low pressure system, due to their functional characteristics, Columbia maintains that EFVs will reduce the pressure of flowing gas from the inlet side of the EFV to the outlet side. As a result, Columbia explains that the pressure drop caused by the mere presence of an EFV on a low pressure system may limit available pressure to serve a customer with greater than average demand resulting in unintended service interruptions during the higher flow needs of winter heating.

 Peoples Natural Gas Company LLC and Peoples Twp LLC (Peoples) expressed concern that the newly proposed modifications, in certain parts, continue to limit the flexibility of the natural gas distribution companies to use their expertise in designing and placing meters sets, service lines and associated facilities. Further, Peoples is also concerned that the new requirement to replace all inside meters within ten (10) years, which was not present in the July 2011 Order, will unnecessarily increase costs and will be less efficient than if such meter replacements were done in conjunction with the system improvement plans already established by Peoples and approved by the Commission.

 PGW submits that compliance with this rulemaking will require that approximately 332,000 meter sets be relocated from an inside location to an outside location at a cost of approximately $826 million, and if PGW were required to spend $826 million during a ten year period, the impact on the Company, its capital budgets and its customers would be overwhelming. PGW's relocation cost for 332,000 meters is $670,000,000 and the renewal cost for 62,000 unprotected steel service lines is $156,000,000. PGW maintains that the cost of relocation is unwarranted based on the substantially minimal risk in PGW's service territory.

 In support, PGW explains that 99% of PGW's service lines are operated at a low pressure (i.e. 0.25 to 5 psig), and, therefore, the identified risk of delivering high or medium pressure gas which flows to the inside of a customer's building does not exist at virtually all of the customer locations in PGW's service territory.

 Moreover, PGW contends that it has not experienced an incident in which an explosion occurred because a steel service line was struck and pulled from an inside meter set. Finally, PGW submits that its DIMP which was reviewed by the Commission's Gas Safety Division in December 2012 does not identify any risk associated with excavations in which a service line is pulled from an inside meter set. In addition to relocation costs, PGW contends that it will also experience substantial costs related to possible damage to existing buildings and structures, increased customer complaints and lawsuits, and potential liability associated with PGW's work on inside piping. PGW concludes that the regulations should be modified so that inside meter sets connected to certain service lines are excluded from the relocation requirement.

 The PECO Energy Company (PECO or Company) comments generally that the Commission should not expand the scope of the rulemaking beyond meter sets attached to steel services. PECO believes that the ANOFRO significantly expanded the scope of the rulemaking where natural gas distribution companies now must relocate all indoor meter sets, regardless of the type of service line, within 10 years from the effective date of the regulations. PECO explains that such a change would require the relocation of an additional 50,000 meter sets that are attached to other types of service lines, such as plastic, within 10 years. PECO does not believe that the public interest is served by performing more than twice the remediation work that is already included in its approved LTIIP over the same 10 year period when plastic services are involved.

 PECO maintains that it would significantly change the focus of its LTIIP by requiring the Company to accelerate lower safety risk work at the expense of higher safety risk work, which is not the safest, most effective, or efficient approach to meter relocation and, for these reasons, nor is it in the public interest. Finally, PECO asserts that it would almost double the cost of the project to ratepayers from $60 million under the Commission's original order, to $110 million dollars under the ANOFR.

 According to PECO, the LTIIP was not designed to accommodate high and low priority remediation work simultaneously and doing so would not be in the public interest. PECO explains that high priority remediation work addresses risks of incidents that have a higher likelihood of occurring like cast iron main replacements because when they break a large amount of gas can be released and steel service lines because they have a high likelihood for leaking.

 PECO explains that the relocation of indoor meter sets connected to plastic service lines is considered low risk because they have a low likelihood for leaking. The main concern PECO explains is if it is now required to perform high and low priority work simultaneously, high priority work will become delayed by low priority work. Therefore, if this happens, the more significant risks to life, injury, and damage (aged infrastructure consisting of cast iron mains) will not be eliminated within the next 10 years.

 PECO states that it already has an effective process for notifying customers of maintenance work—PECO sends letters one week in advance of the work beginning. PECO believes that this provides more time to account for scheduling changes based on unexpected storm response or other emergent work. PECO believes the regulation will increase cost and customer frustration, which can be avoided by adopting notifications with a one week lead time.

 The OCA submits that some proposed amendments to Section 59.18 require revision or clarification and requests that the Commission adopt these revisions to improve the regulation for the protection and promotion of public safety.

 The City of Allentown (City) filed comments first asserting that natural gas distribution companies should be required to share the specific location of emergency shut-off valves, meters, and regulators with local emergency services, especially in instances where the service line to a property or customer is being upgraded or newly installed. In addition, the City maintains its previous position that the proposed Rule does not address the visual impacts to an historic resource when the equipment is installed outside on a primary façade. The City submits that the Rule does not require that alternatives be considered to avoid or minimize the impact of installing the meter and/or regulator outside on primary façades of historic resources. The City would require that the Rule be revised to discuss in a very specific manner how the utility companies are to work with the property owner to consider regulator placement options, and select one that minimizes the visual impact to the historic property and/or historic district. Moreover, the City argues that the new Rule should require public notification through a meeting or appropriate media outlets when projects impact the neighborhood as a whole. The City also would require natural gas distribution companies to notify property owners as well as the utility customer when they plan to move meter sets to the exterior of a property.

 The Pennsylvania Historical and Museum Commission (PHMC) continues to be concerned, however, that the final rule does not provide any direction or guidance to the utilities for identifying and/or negotiating appropriate alternatives when the utility deems it necessary, practical, or less expensive to relocate a meter on the outside of a designated historic property. In the case of a historic district covered by a municipal ordinance, PHMC explains that gas companies will essentially have the choice of 1) submitting each meter relocation to the local Board of Historical Architectural Review or Historical Commission for their review, or 2) avoiding the review process altogether (since nearly all local ordinances are mute on the subject of installing utility equipment). According to PHMC, neither of these choices is in the best interest of the gas utilities, the municipalities, or the property owners.

 PHMC recommends that the regulations direct gas companies to develop guidelines for relocating outside meters in locally designated historic districts, and these guidelines should provide alternatives for typical historic building types (e.g. row houses, downtown commercial buildings, detached houses on narrow lots, etc.) PHMC still questions who is responsible for determining whether a building or a neighborhood meets one of the historic designation criteria; while many property owners are proud that their property or district is recognized as being significant, others are unaware of that status. PHMC strongly recommends that the Commission require gas utility companies to verify which properties or neighborhoods meet the regulation criteria when planning gas line improvement and meter relocation projects.

 City of Allentown Mayor, Ed Pawlowski (Mayor), strongly supports the amendment to the regulation that permits inside meter locations for properties that have been designated as historic under the Pennsylvania Municipal Historic Districts Law, the Municipalities Planning Code, or a Municipal Home Rule Charter.

 The Mayor also argues that the inside meter locations in historic districts should be the rule unless the utility can justify the placement should be varied for a particular location. Moreover, the Mayor favors the placement of gas meter sets indoors while the regulators, which are small and will be less intrusive on the aesthetics of historic structures, may remain outside.

 Finally, the Mayor argues that property owners should be notified of installation projects and be given the opportunity to participate in public meetings with utility company representatives.

Discussion of the General Comments to the Advance Notice of Final Rulemaking Order

 The consensus position of the gas utility companies is, first, that the proposed meter and regulator location regulation is not warranted based on the historical risk of failure associated with inside meters and regulators. The gas utilities specifically note that federal regulations require utilities to file DIMPs, audited by the Commission, which identify, categorize, and rank risks associated with distribution facilities.

 The United States Department of Transportation's Pipeline and Hazardous Material Safety Administration (PHMSA) published the final rule establishing integrity management requirements for gas distribution pipeline systems on December 4, 2009. See 74 FR 63906. The effective date of the rule was February 12, 2010. Distribution system operators were given until August 2, 2011 to write and implement DIMP plans. See 49 C.F.R. § 192.1005.

 The gas utilities expressed concern that the requirements of the new regulations to move existing inside meter sets outdoors will divert funds needed to address higher priority risks enumerated in existing DIMPs. In addition to the federal requirements, large NGDCs have filed individual Long Term Infrastructure Improvement Plans (LTIIPs) under Act 11, some of which have been approved by the Commission. We supported this legislation to implement a distribution system improvement charge (DSIC) based on our belief that gas utilities need to initiate infrastructure replacement programs. We further acknowledge these plans consider meter relocation in the context of replacing aging infrastructure. We further agree with the utility position that replacement and relocation of meter sets performed at the time of main replacement can be an efficient and cost effective way of upgrading existing service locations.

 Clearly, these efficiencies for relocating meters and regulators would result when streets and sidewalks are already excavated for main replacement. Under these circumstances, when a cost effective coordinated schedule for upgrading infrastructure is undertaken, the permitting and repaving costs can be shared, only one excavation and restoration project is scheduled, service is interrupted only once, and only one set of notices are required.

 However, rather than completely leave compliance with the regulation to the time line imposed by a DIMP, we will set a time limit for gas utilities to complete replacement of existing facilities required by the regulation. We believe that a 10 year time frame is not realistic even if completed as part of a coordinated infrastructure plan. A number of the utilities expressed concern over the 10 year period. Given the remediation work and cost to be undertaken, we shall add paragraph (3) of subsection (g) to set the completion date of 20 years from the effective date of the regulation ''or incorporate the requirements of the regulation in a Distribution Integrity Management Plan, whichever occurs first.''

 Columbia submits that the 20-year period will allow it to continue to address its top priority risks and also accommodate the Commission's concerns for inside meter sets. UGI estimations with respect to the relocation of inside meters over 10 years also support an increase in the time period for compliance with the regulation.

 The 10 year time frame was not included in the July 28, 2011 Proposed Rulemaking Order. The time frame of the year 2020 for relocating steel service lines outside, that was included, is no longer relevant as we have modified the application of regulation requirement.

 We do not agree with the alternative proposed by the gas utilities that meters may be located inside within a building if an excess flow valve is installed at the service line tap and the service line pressure is equal to or greater than 10 psig. EFVs do not stop the gas flow completely in the event of a service line break. Moreover, meters can also leak and utilities must access the meters to conduct a leak survey.

 In addition, we recognize that excess flow valves may not be triggered by a pressure differential that cannot be created with a low-pressure operating system. As a result, meters may be located inside in low-pressure operating systems and regulators are not required. As discussed herein, we shall be adding a new subparagraph (d)(1)(i) that provides that an inside meter location shall be considered where the service line is a low pressure line. For service line pressure of 10 psig or greater, however, regulators are needed to reduce pressure. Therefore, we will retain the provision in the proposed rulemaking at paragraph (c)(2) that ''[r]egulators shall be located outside when a meter is located inside.'' However, consistent with our understanding of where regulators are not required, we shall qualify this paragraph by adding the introductory clause ''[e]xcept for low pressure systems with service line pressure less than 10 psig.''

 We further agree with the Mayor of the City of Allentown that regulators are less intrusive and may remain outside. Therefore, if an excavation involves a line hit that tears the line from the regulator, the gas leak will occur outside the building, rather than inside. This would represent a change to Annex A of the ANOFRO that we believe is warranted for safety reasons and aesthetics, and is now reflected in paragraph (d)(2) of the final rulemaking.

 Moreover, since gas utilities will not be required to perform stand-alone projects not coordinated with either a utility DIMP or LTIIP, we shall not make a distinction in the regulation for the type of service construction, such as plastic service lines that need to be relocated. In other words, meter set relocation required by regulation is not dependent on the type of service line and we shall not make any exceptions. The replacement of service lines whether plastic or steel should depend on the priority of risk in its existing DIMP.

 We also agree that gas utilities should share the specific location of emergency facilities with local emergency services. Although the argument could be made that reasonable service would require that the utility share this information, we do not believe that this requirement is a subject covered or addressed in this regulation.

 We shall also decline to address visual impact alternatives that may avoid or minimize the impact of installing the meter and/or regulator outside. Although we would expect a gas utility or any utility to provide reasonable and adequate service when installing its equipment outside,⁸ we shall not attempt to set what may be subjective requirements that would avoid or minimize the impact to an historic resource. However, we do agree that property owners, as well as utility customers, should be notified of neighborhood projects, which we believe is covered under compliance with the notice requirement of paragraph (a)(2).

 We further believe that the regulation sufficiently defines the restrictions under which inside meters shall be considered. If these circumstances do not exist, then the general rule of paragraph (1) of subsection (a) applies and the meter and regulator shall be located outside and above ground. Therefore, we do not agree that the rule does not provide guidance and direction. Subsection (a) lists general requirements for meter and regulator location. Specifically, for location guidance under paragraph (3) (paragraph 5 in the Final rulemaking), the utility shall consider potential damage by outside forces; under paragraph (4) (paragraph 6 in the Final rulemaking), the utility must consider a number of factors for accommodating access; and under paragraph (6) (paragraph 8 in the Final rulemaking), a list of prohibited locations is provided. Finally, under subsection (b), the regulation lists the locations where outside meter or service regulator locations can be located.

 The recommendation has been made that the regulations should develop requirements for relocating meters and regulators outside in locally designated historic districts and provide alternatives for typical historic building types. As we just indicated, we do have a number of guidelines for relocating meters outside which would apply to outside meters in locally designated historic districts. We do believe, however, that the utility, in applying the regulation, has an obligation to know whether gas line improvements and meter location projects are located in historic areas. This is a burden that any property owner or contractor would probably have in undertaking exterior improvements in an historic district, since the local municipality may require prior approval before a building permit is issued.

 The interested parties also made the following comments and recommendations specific to the regulatory provisions.

Comments and Discussion to Specific Regulatory Provisions of the Advance Notice of Final Rulemaking Order

Section 59.18(a) General requirements for meter and regulator location.

(1) Unless otherwise specified in this section, meters and regulators shall be located outside and aboveground. A utility shall provide written notice to a utility customer by first class mail or by personal delivery 30 days prior to relocating and subsequently installing a meter or regulator outside the customer's property.

(2) When it is necessary to install meters at multiple locations on a premises, a utility shall provide a tag or other means to indicate there are multiple meter locations.

 EAP supports notice to the customer prior to relocation but requests elimination of the perceived requirement of notice thirty (30) days prior to relocating the meter set.

 UGI believes deletion of the reference to steel service lines and the general statement in § 59.18(a)(1) that ''meters and regulators shall be located outside'' suggests that all meters and regulators must be located outside by the deadline specified in subsection (g) (10 years from effective date of regulation) even if served with plastic service lines or with steel service lines with an excess flow valve. UGI explains that if it only had to replace all inside meters served by steel service lines within ten years, as opposed to all inside meter sets, it estimates the incremental direct costs of performing non-coordinated service line replacements and meter relocations would be approximately $44.5 million, or $4.5 million per year, as opposed to $208.6 million, or approximately $20.9 million per year. UGI recommends that the Commission redraft the regulation to remove ambiguity and more clearly state in an affirmative manner what circumstances would require a meter and regulator relocation by an NGDC.

 In addition, UGI notes that there are certain factors that may result in opportunities to accelerate installations of facilities before the expected installation date as well as unexpected delays. By establishing a rigid advance notice requirement, UGI states that crews might have to be demobilized, equipment idled and construction disruptions extended at considerable cost simply to comply with advance notice requirements.

 UGI urges the Commission to either remove the notice requirement from its regulation, or alternatively to simply establish that reasonable advance notice to homeowners should be provided unless it is impossible or impractical to do so. According to National Fuel, providing prior written notice is not always feasible; for example, when work at a customer's premises is triggered by a gas leak or other time sensitive repair, the meter will routinely be moved outside as part of the larger repair and providing written notice is unnecessary because the utility and customer are already in communication regarding the larger repair. Therefore, National Fuel argues that subsection (a)(1) should contain an exception for situations when the meter and/or regulator is moved outside as part of an emergency repair being performed at the customer's premises.

 In addition, National Fuel submits that the language on timing of the notice should be clarified to indicate that the requirement is at least thirty days advanced notice not exactly thirty days. Finally, National Fuel recommends that a sentence should be added to subsection (a)(1) that states that when feasible, the utility shall perform the relocation within the period of time set forth in any written notice provided to the customer. Peoples generally agrees with the ANOFRO revisions, except stating that there are instances in which it is not possible to provide thirty (30) days advance notice prior to relocating and installing a new meter or regulator outside of a customer's building. Specifically, in instances of emergency or unanticipated work on site, it would be economical and efficient to relocate the meter during the repairs—in such instances, advance notice is not feasible.

 Peoples suggests providing ''at least'' 30 days' advance notice, and the natural gas distribution company may send notice to the customer advising that the meter will be removed within a coming period of time—the exact date for which may shift due to various legitimate reasons, such as emergency work, weather conditions and crew availability. Finally, Peoples suggests that the term ''property'' at the conclusion of the sentence should be changed to ''building'' or ''structure'' to ensure that the regulation is specifically addressing meter and regulator locations outside of the building structure itself, and not off of the physical property (land) of the customer. Accordingly, Peoples suggests that the ANOFRO revisions be amended to reflect these changes that are provided on page 3 of its comments.

 PECO notes that it does not allow for gas meters to be installed at multiple locations for safety reasons and recommends removing the proposed section.

 The OCA submits that proposed Section 59.18(a)(1) should first be divided so that the general rule and customer notice provisions are set forth in separate subparts. The customer notice provision contained in proposed Section 59.18(a)(1) should be numbered as a separate subpart of Section 59.18(a) ''General Requirements for Meter and Regulator Locations.''

 As to the first sentence of amended section 59.18(a)(1), the OCA asserts that the language ''[u]nless otherwise specified in this section'' does not accurately encompass that exceptions to the rule that meters and regulators be installed outside and aboveground may be the result of impossibility, a lack of feasibility, or the utility's determination that the location of the meter inside or in a specially designed cabinet with exterior access is in the public interest. The OCA recommends that the first part of proposed section 59.18(a)(1) be revised to read:

Unless otherwise [specified] allowed or required in this section, meters and regulators shall be located outside and aboveground.

 The OCA also submits that the Commission should clarify and refine the customer notice provisions so that the utility provides the customer with appropriate notice and contact information. Additionally, the OCA contends that the Commission needs to revise proposed section 59.18 to assure that both customers and the property owner receive notice. The OCA recommends the following amendments to the customer notice language proposed by the Commission:

A utility shall provide written notice to a utility customer and also, if different, the property owner by first class mail or by personal delivery 30 days prior to relocating and subsequently installing a meter or regulator outside the customer's property. The written notice shall inform the customer and property owner of the equipment that the utility proposes to relocate, the planned new location, and how to contact the utility to provide supplemental information that the utility may not have had available, such as the property's historic status. The written notice should also include contact information for the Commission's Bureau of Consumer Services.

 Under paragraph (a)(1), if the customer is not the property owner, PGW recommends that the customer must be required to forward the written notice to the property owner. Accordingly, PGW recommends that the following sentence should be added at the end of this paragraph:

(1) A utility shall provide written notice to a utility customer by first class mail or by personal delivery 30 days prior to relocating and subsequently installing a meter or regulator outside the customer's property. If the customer is not the owner of the property, the customer must forward the written notice to the owner of the property.

 Under this section, Society Hill Civic Association (Society Hill) comments that the 30-day period is too short to permit a property owner to make an adequate response, and would propose that the notification period be extended to 60 days. Moreover, Society Hill suggests that a pictorial representation of the meter and related equipment, demonstrating its size and character in readily understandable form accompanies the notice.

 Society Hill also urges that the proposed provision relating to recessed cabinets in the building wall expressly exempt activities that would result in the destruction of any portion of the historic fabric of an historic building.

Discussion

 We agree with NFG and Peoples that the notice provision should provide the phrase ''at least'' before thirty (30) days to establish that the advance notice does not have to be exactly 30 days. We believe it is reasonable to establish a specific time period as a minimum amount of time to provide the customer notice of the proposed relocation. We have made this change, now found at Section 59.18(a)(2) in the final.

 In addition, we recognize People's and NFG's concern that in the event of an emergency repair the utility may move the meter outside and the customer would not have had the requisite notice. Even under these rare circumstances, we believe the utility could provide some notice to the customer. Although we believe that it is necessary to provide some notice that the utility will be engaging in the work inside and in front of the customer's property, regardless of the emergency situation, we shall include the clarifying phrase ''[e]xcept in the case of an emergency.'' In addition, although we agree that there could be factors that may result in opportunities for People's to accelerate installations, we assume these are sporadic and that generally the utility will have an infrastructure replacement construction schedule more than 30 days out.

 In fact, under Section 59.38 of our gas service regulations, a public utility is required by regulation to provide to the Commission a report of proposed major construction at least 30 days prior to the commencement of work. Given that there is a notice requirement of at least 30 days for the public utility to notify the Commission of a major construction project, we consider at least 30 days prior notice to the customer to be reasonable. In addition, if the utility provides at least 30 days' notice, the exact date may shift to account for any emergency work, weather conditions, or manpower issues.

 With respect to Peoples suggestion about changing the term ''property,'' we agree and shall implement the recommendation throughout the regulation. We shall replace ''property'' with ''building'' which is a more accurate description and is used in the current regulations. Furthermore, we shall not remove the language in paragraph (2) as recommended by PECO, as other utilities under certain circumstances could allow gas meters installed at multiple locations. However, the language is now located at paragraph (a)(4).

 UGI is correct that the final regulations require that all meters and regulators must be located outside even if served with plastic service lines or with steel service lines, unless a specific exception applies. We have extended the application deadline in paragraph (g)(3) and this work may be coordinated with the utility's general infrastructure DIMP program.

 Finally, we agree that the OCA's recommended language change is more accurate and that paragraph (a)(1) should be divided so that the customer notice provisions are set forth separately. We shall also accept the OCA's language change which acknowledges that the property owner must also be notified and provides specifity about the content of the notice. However, we cannot expect the utility to undertake an extensive property search and know whether the customer is the property owner. Therefore, we shall accept PGW's suggestion, with modification, that the notice make clear that the written notice is for the owner of the property if different than the customer. In addition, if the utility knows the current address of the owner of the building, the notice shall also be mailed or delivered to that address.

 Finally, we do not agree with PGW that the general rule needs any further clarification. We shall add new paragraphs (2) and (3) to reflect these changes regarding notice requirements.

 We have struck language and added new language from proposed rulemaking paragraphs (a)(4)—(a)(9), which is now found at Section 59.18(a)(5)—(a)(8). See our analysis of comments to the proposed rulemaking in Attachment One (pages 23—28) for discussion of these revisions.

Section 59.18(a)

(6) Meters and service regulators may not be installed in the following locations:

(i) Beneath or in front of windows or other building openings that may directly obstruct emergency fire exits.

(ii) Under interior stairways.

(iii) Under exterior stairways, unless an alternate means of egress exists and the meter and service regulator are installed in a well-vented location under stairs constructed of non-combustible material.

(iv) A crawl space

(v) Near building air intakes pursuant to local or State building codes.

(vi) In contact with soil or other potentially corrosive materials.

 National Fuel suggests four revisions to subsection (a)(6). First, National Fuel recommends that this section should be introduced by the phrase ''when feasible and practical to do so, a utility shall avoid installing meters and service regulators in the following locations:'' rather than the current introduction.

 Second, National Fuel submits that subsection (a)(6) should be modified to note that the utility is not under an ongoing obligation to review the factors at subsection (i) thru (vi) with respect to a meter and/or service regulator that has been installed in compliance with the regulation nor is the utility obligated to move the meter and/or service regulator additional times except at the owner's expense.

 Third, National Fuel contends that the requirement in subsection (a)(6)(v) should be stricken since utility workers are not trained in building construction or building codes and may work in a service area that encompasses more than one local building code.

 Finally, National Fuel argues that subsection (a)(6) should not apply to meters located outside prior to the effective date of this rulemaking. National Fuel reasons that if a meter has already been placed at an outside location, the major safety concerns that underlie this rulemaking have been achieved and the utility should not be obligated to move the existing outside meter to a new outside location to comply with the requirements at subsection (a)(6)(i)—(iv). National Fuel submits that these requirements should only apply to new outside meters, including those inside meters relocated outside as a result of this rulemaking.

 UGI recommends that the phrase ''pursuant to local or state building codes'' should be removed from the proposed language of § 59.18(a)(6)(V) since UGI believes it would be unduly burdensome for utility employees to be trained in such local or state building codes.

 Peoples argues that this section should acknowledge that there are some circumstances in which meters may need to be installed in the places now designated as prohibited in the ANOFRO revisions. Peoples believes the better alternative is to amend the ANOFRO revisions to acknowledge that in certain circumstances, meters may need to be placed in prohibited locations—and to provide the natural gas distribution company with the flexibility to use its expertise in determining whether the meter should be placed inside the structure, or outside of the structure in one of the areas now noted as prohibited.

 Additionally, once a meter is placed at a building, Peoples submits that the natural gas distribution company should not be under an ongoing obligation to police the location of the meter over time, nor shall it be required to expense the cost of a relocation necessitated by a building remodeling. Finally, Peoples also believes the natural gas distribution company is not an expert in local or state building codes and therefore, subparagraph (v) should be stricken.

 PECO requests that this section be revised to indicate that natural gas distribution companies do not have a continuing obligation to monitor changes to customer properties that would make a previously acceptable meter set location become a prohibited one and the companies also should not be obligated to move the meter additional times if the customer makes multiple changes that cause previously acceptable meter set locations to become prohibited except at the owner's expense.

 PECO argues that the Commission also should revise the section that prohibits the placement of meter sets near building intakes pursuant to local or state building codes to make it clear that contractors/developers are responsible for ensuring that meter sets will not be placed near building intakes because local and state building codes are applicable to their building design work.

Discussion

 We shall decline to add the introductory phrase suggested by NFG. Some of those locations for installing meters and service regulators identified in the regulation should not be considered and if it is not possible to avoid the locations, then the meter should not be located outside such as provided for under subparagraph (d)(1)(iv). In addition, we shall also decline to make the other changes recommended by NFG. Any issue with respect to having to move equipment that had been located in compliance with the regulation can be addressed through tariff provisions. Also, we disagree that a utility should not be knowledgeable about where it can or cannot install its equipment based on local building codes. When the utility embarks on a major construction project, the utility must be knowledgeable about the building standards. Finally, we believe the new requirements should apply to all outside meters but the utility would have the extended application period of paragraph (g)(3) to comply. We have added new language to that found in the proposed rulemaking, which we discuss in our analysis of comments from the proposed rulemaking found in Attachment One (page 28).

Section 59.18(a)

(7) Unless caused by a customer's violation of applicable gas safety or tariff rules, a utility shall pay the costs of relocating a meter or regulator when the relocation is performed to meet utility or Commission safety requirements.

(8) Unless caused by a customer's violation of applicable gas safety or tariff rules, a utility shall pay the cost of extending customer-owned facilities to the new meter or regulator location when the relocation is performed to meet utility or Commission safety requirements.

(9) A customer requesting that a meter or regulator be moved shall pay the costs associated with relocation when the meter and regulator are currently situated in a suitable location under State and Federal guidelines.

 Peoples generally agrees with the language of this provision but believes a modification should further clarify this section to address situations, such as those addressed in the immediately preceding section, in which property owners modify buildings in a manner that cause the meter location to be out of compliance with these regulations. Peoples submits that in the event a building owner modifies a structure, after meter placement, in such a way that interferes with the safety of the meter location, the regulations should be clear that the natural gas distribution company is not required to expense the costs associated with such relocation. As such, Peoples suggests that the ANOFRO revisions be further amended as stated on page 5 of its comments.

 The OCA supports the Commission's development of these cost responsibility rules. The OCA submits that the gas utilities have an obligation to maintain their system in conformance with Pennsylvania and federal safety standards. However, the OCA submits that the regulation does not recognize the customer may not be the owner of the property and so may not have the ability to prevent the violation or otherwise protect the meter or regulator against damage. The OCA submits that the utility should not have the power to impose costs for relocating regulators or meters or extending customer-owned facilities to connect with the new meter or regulator on a customer or property owner without notice and a reasonable opportunity to cure the violation. However, if the utilities are allowed to impose costs, the OCA advocates that the Commission should require the gas utility to provide written notice to the customer or property owner.

Discussion

 We agree with the OCA that the customer is not always the owner of the property, and this is not recognized in paragraphs (a)(7), (8) and (9) of the ANOFRO. We shall modify the regulation accordingly by adding the term ''or building owner,'' as well as new language we discussed in our analysis of comments to the proposed rulemaking in Attachment One (page 32), to new paragraphs (a)(9), (10) and (11) in the final. As indicated previously, the notice must clearly state that the notice of relocating meters and/or regulators is for the owner of the building if different than the utility customer. Also, we agree that a utility should not have the power to impose costs without prior written notice to the customer. We agree, but believe that the utility should have this notice in a tariff provision. Finally, paragraph (9) of the ANOFRO makes a reference to ''a suitable location under State and Federal guidelines.'' We believe the reference, found now in paragraph (11) of the Final, should be to ''regulations'' instead of ''guidelines,'' since regulations are nondiscretionary requirements that must be implemented.

Section 59.18(b) Outside meter or service regulator locations. Outside meters or service regulators shall be installed in one of the following locations:

(2) In a buried vault or meter box.

 According to PGW's experience, a vault creates a corrosive environment which cannot be remediated. PGW urges that the Commission not permit vaults as an option for outside meter location.

Discussion

 Since this is not a requirement but is left to the discretion of the utility, we shall leave the provision in. We have additionally added language to paragraphs (b)(1) and (2) as addressed in our analysis of comments to the proposed rulemaking in Attachment One (pages 33—35). Finally, we have added subsection (c) which we discuss in our analysis of comments to the proposed rulemaking in Attachment One (pages 34—37). Subsection (c) is taken from paragraphs (b)(3)—(b)(7) in the proposed rulemaking which are discussed in Attachment One, as noted above.

Section 59.18(d) Inside meter locations.

(1) Inside meter locations shall be considered only when:

(i) An outside location is not available due to one of the following restrictions:

(A) A property is listed or is eligible for listing in the National Register of Historic Places.

(B) A property is located within a historic district that is listed or is eligible for listing in the National Register of Historic Places.

(C) A property has been designated as historic under the Pennsylvania Historic District Act, Municipalities Planning Code, or municipal home rule charter.

(ii) Protection from ambient temperatures is necessary to avoid meter freeze-ups.

(iii) A utility determines that a meter is subject to a high risk of vandalism based on the utilities prior experience.

(iv) A utility determines that an outside meter location is neither feasible nor practical.

 PGW has apparently learned through a discussion with the Pennsylvania Historical and Museum Commission (PHMC) that after ''eligibility for listing'' status is granted for a property or historic district, this status is not communicated to the party who is seeking to have the property or district listed. In order for a utility to be properly informed, PGW submits that the PHMC must notify the party seeking the national register listing of the ''eligibility for listing'' status. Accordingly, PGW recommends that these sections should be modified as follows:

(1) Inside meter locations shall be considered only when:

(i) An outside location is not available due to one of the following restrictions:

(A)  A property is listed [or is eligible for listing] in the National Register of Historic Places or the customer notifies the utility that the property is eligible to be listed in the National Register of Historic Places and the eligibility can be readily confirmed by the utility.

(B) A property is located within a historic district that is listed [or is eligible for listing] in the National Register of Historic Places or the customer notifies the utility that the historic district is eligible to be listed in the National Register of Historic Places and the eligibility can be readily confirmed by the utility.

 OCA also is concerned that the structure of amended section 59.18(d)(1) may allow the gas utility to make the final decision regarding the location of a gas meter. Therefore, the OCA submits that the Commission should consider more refinements to assure that the impact on Pennsylvania's historic resources are minimized. According to the OCA, the Commission should clarify that the status of a property as a historic resource or part of a historic district, restricts the property from consideration for an outside meter. The OCA submits that this clarification is needed to offset the ambiguity in the wording of amended section 59.18(d)(1) which allows the gas utility to simply consider the use of an inside meter, while the historic nature of a property, the risk of vandalism, and ambient temperature are labeled as restrictions that make the location of a meter outside ''not available.''

 Finally, the OCA submits that the Commission should clarify that the utility and affected customers or properties may request a case-by-case waiver of this requirement regarding the location of regulators. The OCA submits that customers and communities that have made the effort to restore and preserve historic homes and neighborhoods should have the opportunity to work cooperatively with the gas utilities regarding the placement of regulators and other gas safety installed facilities to find the right balance between the safe provision of gas utility service and preservation of Pennsylvania's historic resources.

 Society Hill points out that restrictions arise primarily from local historic preservation ordinances and façade easements recorded in local land registries. Therefore, Society Hill submits that only local historic districts have the power to prohibit alteration or demolition of historic properties. Moreover, by use of the term ''municipal home rule charter,'' the Commission intended to include individual properties designated as historic pursuant to ordinances enacted by cities of the First Class. However, the language of the revision does not extend to properties located in historic districts designated pursuant to local ordinances adopted by such cities. Society Hill also argues that Federal listings do not constitute restrictions and in fact place no restrictions on the alteration or demolition of listed properties or properties located in listed districts.

 Accordingly, Society Hill proposes that subsection (d)(1) of the proposed rule be amended to read, in pertinent part, as follows:

(1) Inside meter and service regulator locations and shall be required:

(i) In buildings located in historic districts listed on the National Register of Historic Places or eligible for such listing, buildings individually listed on the National Register of Historic Places or eligible for such listing, buildings located in locally designated historic districts or eligible for such listing, and buildings individually designated pursuant to local ordinances as historic landmarks or eligible for such listing, except in cases where an outside meter set may be placed in such a location as not to be visible from a street;

(ii) on buildings subject to historic preservation façade easements recorded in local land registries except where the outside placement of meter equipment would not violate the terms of the easement.

Discussion

 We shall adopt PGW's amendment to the regulation at (d)(1)(i)(A) and (B) of the final rulemaking. This does not appear to be an unreasonable burden to place on the customer or building owner to notify the gas utility of the eligibility of the building or historic district. However, we shall further amend the regulation to account for the possibility that the customer is not the building owner as we have discussed previously, and we shall also provide for the building owner notifying the utility.

 The general rule of the regulation under paragraph (a)(1) is that meters and regulators shall be located outside unless otherwise allowed or required in the regulation. This subsection and paragraph identifies situations where an inside meter will be considered. We agree that the regulation does contain provisions that delegate discretion to the utility in making a determination with respect to locating an outside meter. Although we believe that it is necessary that, due to its public safety obligations, the utility be allowed to make the final decision, this decision to locate a meter inside is not without direction. The regulation does provide, in effect, guidelines that must be followed. If an outside meter is not going to become available because of certain restrictions, then an inside meter location must be considered, and that does not appear to us to be ambiguous.

 We do believe, however, that it is necessary to add an additional category in paragraph (d)(1) to inside meter locations. We shall add a new subparagraph (d)(1)(i) that reads ''[t]he service line pressure is less than 10 PSIG.'' PGW comments (page 5) that the risk of low pressure lines delivering gas flows inside a building do not exist at virtually all of its customer locations. In fact, regulators are not generally required in low pressure operating systems and the risks associated with inside meters are reduced because the system operates at low pressure.

 In addition, we shall not accept EAP's recommendation with respect to subparagraph (d)(1)(iv) in the ANOFRO that the phrase read ''feasible and reasonable.'' The phrase ''feasible and practical'' is very similar to the phrase advocated by EAP in its comments to the proposed rulemaking. As we discussed in our analysis of comments to the proposed rulemaking in Attachment One (page 21), we believe this is a more descriptive standard. Finally, we do not believe that the regulation prevents customers, property owners, and communities from working cooperatively with gas utilities. This language is now incorporated in (d)(1)(v) in the Final.

 In our analysis of the comments to the proposed rulemaking in Attachment One (pages 40—43), we discussed and accepted the historic district designations in subparagraph (d)(1)(i) recommended by PHMC and PGW's modification with respect to addressing meter vandalism in subparagraph (d)(1)(iii). These subparagraphs are now identified as (d)(1)(ii) and (d)(1)(iv), respectively. Language has also been added and stricken in paragraphs (d)(2)—(d)(5) consistent with our discussion of the comments to proposed rulemaking in Attachment One (pages 43—49).

 We also find merit with Society Hill's comments about our use of the term ''restriction'' in subparagraph (d)(1)(i). For the reasons stated therein, we have modified subparagraph (d)(1)(i), which is now identified as (d)(1)(ii). Rather than referred to as ''restrictions,'' we shall refer to the listings, location, or designation as ''criteria.'' We are also persuaded by Society Hill's arguments with respect to inclusion of historic districts designated pursuant to local ordinances. We have added a new subparagraph (d)(1)(ii)(D) to implement this inclusion.

(4) Excess flow valves must be installed on all service lines when a meter is located inside a building.

 For the installation of excess flow valves (EFV), EAP requests a modification to conform to the federal standard established under 49 C.F.R. § 192.383(b). As currently drafted, EAP believes that the proposed amendment contradicts the federal rule which includes a number of situations when excess flow valves are not effective and need not be employed.

 Rather than require the installation of excess flow valves on all service lines, UGI submits that the regulation should conform its standard to the requirements of 49 C.F.R. § 192.383(b) since, as the regulation implicitly recognizes, excess flow valves are not effective on a low-pressure service line which does not operate at a pressure of 10 psig or greater throughout the year.

 National Fuel submits that the requirement at subsection (d)(4) is redundant with subsection (d)(2) and the new requirement at (d)(4) contradicts the federal rule which contains a number of situations when excess flow valves need not be employed, including when the service line does not operate at a pressure of 10 psig or greater throughout the year. 49 C.F.R. § 192.383(b). Since many service lines operate at pressures below 10 psig, National Fuel asserts that subsection (d)(4) should specifically state that excess flow valves are not required in situations described in 49 C.F.R. § 192.383(b).

 PGW generally agrees with this provision, but believes there are certain circumstances in which an excess flow valve cannot or should not be installed. PGW notes that the Pipeline and Hazardous Materials Safety Administration (PHMSA) also regulates this area of concern and a federal regulation recognizes the circumstances in which an excess flow valve cannot or should not be installed as set forth directly below:

Section 192.383 Excess flow valve installation.

*  *  *  *  *

(b) installation required. An excess flow valve (EFV) installation must comply with the performance standards in § 192.381. The operator must install an EFV on any new or replaced service line serving a single-family residence after February 12, 2010, unless one or more of the following conditions is present:

(1) The service line does not operate at a pressure of 10 psig or greater throughout the year;

(2) The operator has prior experience with contaminants in the gas stream that could interfere with the EFV's operation or cause loss of service to a residence;

(3) An EFV could interfere with necessary operation or maintenance activities, such as blowing liquids from the line; or

(4)  An EFV meeting performance standards in § 192.381 is not commercially available to the operator.

 Therefore, PGW recommends the following modification to paragraph (d)(4):

Excess flow valves must be installed on all new or replaced service lines when a meter is located inside a building unless one or more of the conditions set forth in 49 C.F.R. § 192.383(b)(4) is present.

 PECO also notes that this requirement does not consider the prohibitions against using EFVs on new installations and proposes that the regulation should have a qualification for the prohibitions set forth in 49 C.F.R. § 192.383.

Discussion

 A number of utilities have expressed the same comment with respect to EFVs. We agree that our regulation should not conflict with the Federal regulation. We also agree that EFVs are not effective or needed on low pressure service lines. In fact, EFVs do not work on low pressure systems so they should not be required for those systems.

 As indicated in the gas utilities' comments, an EFV must be installed on any new or replaced single family residence service line unless the line operates at pressure below 10 psig. Although that comment is consistent with 49 C.F.R. § 192.383(b), we do not believe that it is necessary to cite the Federal regulation as proposed in the ANOFRO. Therefore, we shall not adopt PGW's change with respect to paragraph (d)(4). In fact, we shall not make any reference to EFVs and the Federal regulation at 49 C.F.R. § 192.383(b).

 Pursuant to 52 Pa. Code § 59.33(b), the Commission has already adopted the Federal pipeline safety laws, including Part 192. Consequently, Pennsylvania gas utilities are already required to comply with the EFV requirements, which only apply to service lines serving a single-family residence. Given our prior incorporation of the Federal regulation, should PHMSA decide to expand the regulation further to large industrial customers, the new Federal regulations will apply to our Pennsylvania large industrial customers or any class of customers covered by the Federal regulatory expansion. Thus, we shall not include any additional requirements providing for installation of EFVs, which could also be interpreted as duplicative of existing Federal regulations.

 No changes were made to what is now Subsection (e) in the final rulemaking from the proposed version.

Section 59.18(f) General requirements for new service lines.

(1) When feasible and practical to do so, a building may not have more than one service line.

(2) When feasible and practical to do so, a service line must terminate at the inlet valve of the meter set in the building in which the service line enters.

(3) When feasible and practical to do so, the service line must be installed in a straight line perpendicular to the main.

 EAP recommends striking this entire section because no safety concerns exist and, in its current iteration, it does not accord the utility with the necessary flexibility needed to handle complex industrial properties with multiple buildings or unusually shaped lots.

 NFG believes the addition of ''when feasible and practical to do so'' at the start of (f)(1)—(3) adds some needed operational flexibility to the requirements in subsection (f). NFG states that ''feasible and practical'' defines a narrow set of circumstances when something cannot be done or accomplished and in fact has never been done before. Therefore, the requirements at (f)(1)—(3) are still too restrictive and should be deleted.

 NFG explains that although the majority of the time the service line will comply with these three requirements, there are situations beyond those that are ''infeasible and not practical'' that warrant deviations from these three requirements. NFG submits that the Commission should maintain the existing flexibility in the current rules regarding service lines and forego these revisions.

 In order to make it clear that the feasibility and practicality of these requirements are not to be left to a customer's discretion, PGW recommends the addition of language granting the utility the discretion to make the determination.

Discussion

 We believe that the application of general requirements for new service lines represents reasonable and necessary engineering practices and implementation of these requirements is in the public interest. Furthermore, we agree with NFG that the language of the subsection adds operational flexibility to the requirements. Moreover, we do not share the same concern as PGW that it is within the customer's discretion to apply the general requirements for new service lines. We shall not make the recommended language change offered by PGW. Finally, in Attachment One (pages 21 and 28) we analyzed comments addressing requirements for new service lines and made changes that were incorporated in a separate subsection (f) for service lines.

Section 59.18(g) Application of regulation

(1) Upon its effective date, utilities shall comply with this regulation for new meter, regulator, and service line installations in new locations.

(2) Upon its effective date, utilities shall comply with this regulation when replacing existing meters, regulators and service line facilities.

(3) Utilities shall have 10 years from the effective date of this regulation to complete replacement of existing facilities in compliance with the requirements of the regulation.

 EAP requests clarification of the application of subsection (g)(2) to the extent it would require a utility to comply with section 59.18(f) when replacing/renewing existing service lines. EAP suggests that the most cost effective way to ''replace'' an existing service line may be to ''renew'' the line by inserting contemporary pipe into the existing service line which may not comply with the proposed regulations at section 59.18(f). EAP recommends eliminating subsection (g)(3) in its entirety and consider language which aligns the risk associated with certain inside meters and/or regulators when attached to steel service lines, as determined under a DIMP, with the utility's program to replace cast iron and bare steel pipelines as established in its LTIIP or other pipe replacement programs. EAP concludes that the new mandate to relocate all inside meter sets within a ten year period to the outside of a building or residence regardless of the nature of the existing service line and without aligning this new regulatory program with current programs to replace aging infrastructure, is not based on recognized principles of risk management and gas safety, is not cost-effective, and is not in the public interest.

 NFG recommends that the reference to ''replacing existing meters'' should be deleted because meters are often replaced because they are non-functioning or suspected of malfunctioning, and if the problematic meter is inside, the utility should be permitted to replace it with a new inside meter immediately without having to comply with the time consuming requirements of this rulemaking.

 Moreover, NFG states that paragraph (g)(2) should be revised to specifically exclude Section 59.18(f) which by its title applies to ''new service lines.'' In other words, NFG explains that a utility should not be required to reconfigure existing service lines since this would add significantly to the expense and resource demands of compliance with this regulation. As an example, NFG explains that if a utility detected a leak on a steel service line for an industrial or commercial customer, it would normally correct the problem by inserting a plastic line within the existing steel line. However, under the new rule, NFG submits that this would be a replacement of an existing facility and the utility would need to reconfigure the layout of the service line to be perpendicular to the main and/or to go from two or more service lines into the building to only one. As a result, NFG argues that existing service lines should be ''grandfathered'' from the requirements in Section 59.18(f).

 NFG's position is that paragraph (g)(3) should be deleted entirely or revised to contain a significantly longer term for compliance for existing facilities. NFG concludes that the data summary in the Order suggests that little or no empirical evidence supports the immense burden of accelerated compliance for existing facilities, especially in light of other infrastructure improvement planning.

 NFG explains that it has nearly 60,000 inside meters remaining in Pennsylvania, so in order to comply with the 10 year timeframe for existing facilities, NFG would have to move approximately 6,000 meters outside each year for the next ten years. NFG submits that this is roughly three times its average rate over the last three years and will require NFG to take actions that would not coordinate with its larger infrastructure improvement plans.

 According to NFG, its DIMP, which was prepared in compliance with 49 C.F.R. § 192 subpart P, and is subject to audit by the Gas Safety Division of Bureau of Investigation and Enforcement, was developed after an assessment of applicable safety risks and attempts to balance safe operations with the need to operate in a cost effective and prudent manner. Therefore, NFG believes that any deadline on the application of this rulemaking to existing facilities jeopardizes the risk assessment and analysis that led to the development of NFG's DIMP by diverting resources to relocating existing meters, service regulators, and service lines.

 Finally, if any deadline is included in paragraph (g)(3), NFG submits that it should specifically state that it does not apply to the requirement at Section 59.8(f), which by its title applies to ''new service lines.'' Given the addition at numerous places in the proposed final rule of the new phrase ''when feasible and practical to do so,'' NFG submits that it is essential to add to this rulemaking a new subsection that clarifies how a utility demonstrates that something is infeasible and not practical. The utility should be able to rely on ''reasonable documentation'' created by its employees that explains the reasons for selecting a particular meter, service line, and/or regulator location in contravention of the specific parameters set forth in the regulation.

 With respect to application of the regulation, Peoples describes its current process of replacing its infrastructure:

Peoples is in the process of replacing its distribution system infrastructure—and has been doing so for several years. Over the past two years, Peoples has replaced nearly 50 miles of cast iron pipe. Over the next twenty years, Peoples plans to replace its entire system of unprotected bare steel pipe and associated facilities (3,273 miles). The recently filed, and approved, Long Term Infrastructure Improvement Plans, filed by both Peoples companies, outlined the 5 year plans for infrastructure replacement, including the estimated costs. The LTIIPs established by Peoples provide for a systematic replacement of facilities which are ranked by condition and risk factors associated with those facilities. This systematic approach allows the Company to focus its capital dollars on the facilities with higher risk of failure, or those with a greater system-wide impact due to failure. This approach allows the Companies to take proactive steps to protect the integrity of the system operations by first replacing those facilities that may have a greater impact in the event of a failure. Each year the risk conditions and risk factors are re-evaluated and the projects are then re-categorized. At this time, the LTIIPs do not specifically include inside meter replacements, although they do include Peoples currently existing statistical sampling, risk-based approach to meter replacement.

If a 10 year standard is applied for the replacement of all inside meters. Peoples anticipates that it will need to expend greater capital over the 10 year period that was not previously planned. By requiring natural gas distribution companies to now replace all inside meters within 10 years, Peoples estimates that it will have to expend between $70—$94 million dollars over the next 10 years to replace all 47,000 inside meters on its current system. While these relocations costs may not seem considerable, if the project is split equally over a ten year period, $7—$9.4 million per year is a considerable sum when placed on top of the already planned LTIIP expenditures of approximately $4.5 million per year already expected to be spent on meter replacement. Further, the estimated costs per meter relocation may increase beyond the estimated $1,500—$2,000 per meter due to unique building configurations and other work necessary to bring the meter location into compliance. This added capital expenditure will force Peoples to make an evaluation as to whether mains replacement or inside meter replacement is paramount—and may interfere with planned LTIIP expenditures.

 Peoples believes that the replacement of inside meters should occur in line with its LTIIP plans. Peoples explains further that allowing the programs to run in tandem will result in real cost savings and also ensure capital expenditures are applied to higher failure risk facilities first which provides for a safer and more reliable system over time.

 Specifically, PGW says that Section 59.18(g)(3) should be modified as follows:

(3) Utilities shall have 10 years from the effective date of this regulation to complete replacement of existing facilities in compliance with the requirements of the regulation, except for an inside meter and regulator connected to a service line which is:

(i) operating at less than 10 psig: or

(ii)  a plastic service line (all sizes); or

(iii) 3 inches in diameter or larger; or

(iv) equipped with an excess flow valve.

 The positive benefits PGW explains are that these modifications will focus the meter set relocation requirement on the circumstances that actually pose a safety issue. Furthermore, PGW states that focusing the relocation requirement as proposed by PGW would ameliorate the enormous cost of complying with this proposed rule to manageable levels for PGW.

Discussion

 EAP raises the issue whether inserting contemporary pipe into an existing service line is renewing the line and complies with the proposed regulations at Section 59.18(f). We believe the insertion of plastic pipe into an existing line qualifies as ''replacing . . . service line facilities'' as required in paragraph (g)(2). We further agree as discussed previously that implementation of new regulations for meter, regulator and service line installations should be aligned with current programs to replace aging infrastructure.

 We have thoroughly reviewed these comments about the need to consider meter set relocation in the context of an infrastructure replacement program and agree that meter set relocation efforts should be aligned with planned gas utility projects to replace aging infrastructure, including main replacements. More specifically, meter and regulatory relocation mandated projects should be coordinated with the gas utilities DIMPs. We agree that a main replacement program or other large infrastructure replacement program could create the economic and risk management efficiencies needed to undertake the relocation of inside meters or regulators. In addition, we disagree with the point raised by NFG that replacement of non-functioning or malfunctioning meters inside should not have to comply with these regulations. Gas utilities have the application period under paragraph (3) subsection (g) to comply with the regulation and replacement should be determined according to the utility's risk analysis in its DIMP.

 We also do not agree with National Fuel that ''new service lines'' should be excluded from paragraph (g)(2). Under the example presented by the utility, in replacing the existing facility, it may not be ''feasible and practical'' to reconfigure the layout because it corrected the problem by inserting a plastic line within the existing steel line. If it is feasible and practical to comply with the regulation, however, the fact that it may be inconvenient should not be a reason for ''grandfathering'' the regulation. Again, we agree with National Fuel, as we have with the other utilities, that meter replacement should be coordinated with larger infrastructure improvement projects.

 We shall not accept National Fuel's recommendation that no deadline should apply to the application of subsection (f) nor add a new subsection clarifying how a utility demonstrates that something is not feasible and not practical. We believe our explanation of these terms in our analysis of comments to be the proposed rulemaking in Attachment One (page 21) provided sufficient guidance to apply to the regulation. That being said, we do not disagree that the utility can rely on reasonable employee documentation to support its decisions.

 We agree with Peoples position to the extent it argues that the replacement of inside meters should occur in conjunction with overall infrastructure improvement plans. PGW is also in support of focusing on safety stating that the meter set relocation requirement conducted in such a manner would ameliorate the cost of compliance with this regulation to manageable levels.

 In Attachment One (page 44), we specifically discussed comments and the addition of new subsection (g) that addresses the application of the regulation for new installations, replacing facilities and a time period. As indicated above, we have modified that time period from 10 years to 20 years.

 As indicated previously, we agree with the Mayor of the City of Allentown that regulators are less intrusive and may remain outside. We shall amend subsection (d) in the final regulation by retaining paragraph (c)(2) from the proposed rulemaking which reads: ''(2) Regulators shall be located outside when a meter is located inside.'' Again, if an excavation involves a line hit that tears the line from the regulator, the gas leak will occur outside the building.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 31, 2012, the Commission submitted a copy of the notice of proposed rulemaking, published at 42 Pa.B. 3454 (June 16, 2012), to IRRC and the Chairpersons of the House Consumer Affairs Committee and the Senate Consumer Protection and Professional Licensure Committee for review and comment.

 Under section 5(c) of the Regulatory Review Act, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Commission has considered all comments from IRRC, the House and Senate Committees and the public.

 Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on July 23, 2014, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 24, 2014, and approved the final-form rulemaking.

 Therefore,

 It Is Ordered That:

 1. The regulations of the Commission, 52 Pa. Code Chapter 59, are amended by amending § 59.18 to read as set forth in Annex A.

 2. The Secretary shall serve a copy of this Final Rulemaking Order and Annex A on all jurisdictional natural gas distribution companies, the Office of Consumer Advocate, the Office of Small Business Advocate, the Energy Association of Pennsylvania and all other parties that filed comments at Docket No. L-2009-2107155. The Order, Annex A, and Attachment One shall be posted and made available electronically on the Commission's website.

 3. The Secretary shall certify this Final Rulemaking Order, Attachment One and Annex A and deposit them with the Legislative Reference Bureau to be published in the Pennsylvania Bulletin.

 4. The Secretary shall submit this Final Rulemaking Order, Attachment One and Annex A to the Office of Attorney General for approval as to legality.

 5. The Secretary shall submit this Final Rulemaking Order, Attachment One and Annex A to the Governor's Budget Office for review of fiscal impact.

 6. The Secretary shall submit this Final Rulemaking Order, Attachment One and Annex A for review by the designated standing committees of both houses of the General Assembly, and for review and approval by the Independent Regulatory Review Commission.

 7. The final regulations become effective upon publication in the Pennsylvania Bulletin.

 8. The contact person for this final-form rulemaking is Terrence J. Buda, Assistant Counsel, Law Bureau, (717) 787-5000. Alternate formats of this document are available to persons with disabilities and may be obtained by contacting Sherri DelBiondo, Regulatory Coordinator, Law Bureau, (717) 772-4597.

ROSEMARY CHIAVETTA, 
Secretary

 (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 44 Pa.B. 5420 (August 9, 2014).)

 Fiscal Note: Fiscal Note 57-277 remains valid for the final adoption of the subject regulation.

[Continued on next Web Page]

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¹  Gas Meter Location, Docket No. M-2008-2058386, Motion of Commissioner Kim Pizzingrilli (August 21, 2008).

²  See Ratification and Adoption of Amendments to Part 192 of Title 49 of the Code of Federal Regulations, Docket No. M-00001347, Order entered March 16, 2000, 2000 Pa. PUC LEXIS 4; 52 Pa. Code § 59.33 Safety.

³  A reportable incident exists where there was a release of gas and (1) greater than $50,000 in damages; (2) death or injury; or (3) a significant event in the determination of the distribution utility.

⁴  See Petition of Columbia Gas of Pennsylvania, Inc. for Limited Waivers of Certain Tariff Rules Related to Customer Service Line Replacement, Docket No. P-00072337 (May 19, 2008).

⁵  Such municipal laws may not be enforceable against public utilities due to the Commission's exclusive jurisdiction of utilities under the Public Utility Code. See Duquesne Light Co. v. Monroeville Borough, 449 Pa. 573, 581, 298 A.2d 252, 257 (1972).

⁶  Act 11 of 2012 signed into law on February 14, 2012. According to EAP, the Commission entered a Final Implementation Order on August 2, 2012 which included detailed discussion, inter alia, regarding the content and purpose of Long Term Infrastructure Improvement Plans (LTIIP) required under Section 1352 (a) of Act 11.

⁷  EAP suggests further amending the phrase to read ''feasible and reasonable'' and to eliminate the use of the word ''practical.'' EAP believes the phrase ''feasible and practical'' will actually limit utility discretion regarding meter location and give rise to unnecessary litigation regarding, inter alia, meter placement.

⁸  See e.g., West Penn Power Company v. Pennsylvania Public Utility Commission, 578 A.2d 75, appeal denied, 593 A.2d 429 (1990).

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