May 2016

“PUCN’s MASTER METER REPLACEMENT PROGRAM”

Paul Maguire – Engineering Manager

49 CFR 192.3 Defines a master meter as:

“a pipeline system for distributing gas within, but not limited to, a definable area, such as a mobile home park, housing project, or apartment complex, where the operator purchases metered gas from an outside source for resale through a gas distribution pipeline system. The gas distribution pipeline system supplies the ultimate consumer who either purchases the gas directly through a meter or by other means, such as by rents.”

Can take many different forms:◦ Mobile Home Parks ◦ Apartments & Condo Complexes◦ Cabins and other unit rentals

As part of the investigation performed by

the Commission in Docket No. 12-06043,

the Commission determined the following:

The pipeline safety regulations were becoming too complicated and onerous for small master meter operators;

The only viable solution to address these aging master meter systems was to have the systems replaced by the local distribution company (Southwest Gas or NV Energy)

49 CFR 192 only has 4 areas that lesson requirements for Master Meter Systems

Odorant, sniff tests (49 CFR 192.625);

Damage Prevention (49 CFR 192.614)

Public Awareness Message (49 CFR 192.616)

DIMP (49 CFR 192.1005);

** BESIDES THESE 4 AREAS, MASTER METER OPERATORS MUST COMPLY LIKE LARGE OPERATORS **

The master meter operators were hit by a perfect storm of events:

49 CFR 192 did not exist when many parks decided to install master meter system;

Up until the late 1980s/early 1990s, master meter systems had fallen between the regulatory cracks, with neither PHMSA nor the States diligently inspecting these systems;

Laws passed that prohibited the marking-up of gas sales so that all gas sales just became a pass-through; NO PROFIT JUST LIABILITY;

Systems run at 5 PSI, masking problems/issues;

Main components of the program:

The systems are replaced in their entirety by the LDC, as LDCs will not assume ownership and/or operation of existing systems.

Some contribution by the master meter operator is required, with 20 to 30 percent of the conversion cost having to be contributed funds or contributed work by the master meter operator.

The LDC costs are included in general rates for full recovery.

Operators are not equipped to handle all emergency situations

Master Meter ServedCustomers (1400)

LDC Served Customers(750,000)

Nevada Compliance Resource (NV LDCs compared to MM):

Significant inspection and regulatory/compliance resources can be freed up to focus on other larger operators.

2015 Probable Violation Comparison

2015 Master Meter PVs (18) 2015 LDC PVs (12)

Drafting 30 plus page NOPV/Warning Letters (which does not count as inspection time) becomes a thing of the past.

LDCs have procedures in place that ensure new units are pressure/drop tested before a new coach is hooked up.

90 PERCENT OF ALL MHP UNITS WERE LEAKING IN TWO OF THE CONVERSIONS DONE IN 2015;

EFVs Installed, Vehicle – Meter Damage;

It avoids placing the LDCs that serve the master meter systems in the position of having to responds to leaks and having to make tough decisions (shut down entire system);

The significant issue of ownership and manager turnover is addressed. The annual audit no longer starts with the familiar statement “I AM A MASTER METER WHAT?”

Mains & Service Under Coaches

PROCEDURE ISSUES

PROCEDURE ISSUES

Aliso Canyon: Preliminary Assessment Raises Potential

Concerns About Reliability

California Energy

Commission

May 5, 2016

California Public

Utilities Commission

Introduction: Aliso Canyon Gas Storage Facility

• Facility is one of largest in U.S.– Serves 11 million citizens– Holds 86 billion cubic feet of working gas

• Winter and summer peak demands require gas from storage

• SoCalGas operates three other gas storage fields– Aliso is the only field that can effectively

support demand in LA Basin

Page 26

AppendixSoCalGas Territory Map

Page 27

Aliso Essential to Daily Operations Gas• Gas from Aliso provides energy during winter and summer

peaks– Winter peaks occur on cold days, when buildings use

significant gas for heating– Summer peaks occur on hot days, when gas-fired

generators supply power to air conditioner

• Gas delivered to LA Basin is limited by pipeline capacity and the speed at which gas moves

• Over the period 2012-2015 withdrawals taken from Aliso an average of 134 out of 151 winter days and 70 out of 214 summer days.

Page 28

Average # Days of Withdrawal from AlisoJanuary February March April May June July August September October November December

Avg # of Days of

Aliso Withdrawal

(2012-2015) 31 21 18 7 3 5 13 18 12 12 26 31

Gas demand by customer type

Page 29

Winter Gas Demand

Summer Gas Demand

Initial assessment identified base load risk if winter demand exceeds historical supply/capacity without Aliso

Page 30

Supply/Demand Design

(Bcf/day)

Past Experience

(Bcf/day)

Pipeline Capacity Supply 3.8 3.0Other Storage Supply (without Aliso)

1.7 1.0

Peak Winter Gas Demand -5.0 -5.0Reserve Margin 0.5 (1.0)

• Typical outages can reduce capacity 0.5-1.0 Bcf/day• Electric generation typically requires 1.0-2.0 Bcf/day

18 large power plants representing ~9,800 MW of capacity are supported by Aliso Storage

31

Of total generating capacity 40% is in LADWP, 60% in ISO

Power Plants Served by Aliso Withdrawal

# Electric Generation Station Capacity (MW)

1 LADWP Haynes Generation Station 1724

2 LADWP Scattergood Generation Station 803

3 LADWP Valley Generation Station 573

4 LADWP Harbor 466

5 SCE Alamitos Toll 1970

6 SCE Huntington Beach Generating Station 452

7 SCE Redondo Beach 1343

8 SCE Barre Peaker 45

9 SCE Center Peaker 45

10 El Segundo Energy Center, LLC 526

11 El Segundo Power, LLC 335

12 Long Beach Generation, LLC 260

13 City of Glendale 288

14 City of Burbank 139

15 City of Pasadena 203

16 City of Anaheim - Canyon Power 200

17 City of Vernon - Malburg 138

18 Southern California Public Power Authority – Magnolia 328

Page 32

2015 actual ISO generation in LA Basin

Page 33

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LA Basin Generation under ISO Control

Real-Time Max Generation Real-Time Min Generation Day-Ahead Max Generation

June 30 gas curtailment occurred due to gas pipeline outage

Multi-agency team has identified risks to reliability

• Outages on the gas system limiting pipeline and other storage availability

• Lack of supply due to cold or external conditions

• Scheduled flowing gas not meeting demand

• Rapid ramping of electric generation can exceed dynamic capability of gas system without Aliso

Page 34

Analysis also identified ongoing risk to gas/electric operations while maintaining gas pressure within sustainable and safe operating tolerances without Aliso

• Flowing gas supply that does not match actual demand creates electric generation curtailment risk– Unexpected demand changes– Market practices and rules– Gas flow differences may be a operational challenge

without Aliso

• Rapid ramping of electric generation can exceed gas operations ability to maintain gas pressure within tolerances

Page 35

Preliminary mitigation measures to reduce reliability risks• Flex Alerts in summer and winter (recognizing they affect

different appliances depending on season)• Pursue new energy efficiency and demand response to

reduce or manage electric system load

• Increase SCG, LADWP and ISO operational coordination

• Enhance outage coordination to optimize flowing gas capability (SCG, CPUC)

• Provide two-day ahead dispatch information to inform gas procurement prior to day-ahead market (ISO)

• Establish daily gas balancing rules (CPUC)

• Modify operational flow order rules to reflect Aliso limitation

• Subject to safety considerations; maintain options for reliability purposes

Page 36

Natural Gas SafetyM O N I TO R I N G G AS QU AL I TY

Today’s Presentation

• Natural Gas Interchangeability

• Wobbe Index

• NGC+ Interchangeability Work Group

• Interim Guidelines

• Wyoming Rules Initiative

• Wyoming’s Regulatory Process

Natural Gas Interchangeability

The ability to substitute one gaseous fuel for another in a combustion application without materially changing operational safety, efficiency, performance or materially increasing air pollutant emissions.

Options for Managing Interchangeability

• Management at the Production Source

• Management prior to Introduction into the Transmission Pipeline System; and

• Management at the Point of End Use

Wobbe Index

• Based on the Heating Value and Specific Gravity of a Gas and is related to the Thermal Input to a Burner (Btu per hour)

• Recognized as the Most Robust Single Parameter.

• Establishing a MAXIMUM Wobbe Number can address certain Combustion Phenomena such as Yellow Tipping, Incomplete Combustion and potential for increased emissions of Nox and CO.

• Establishing a MINIMUM Wobbe Number can be used to address Lifting, Blowout and CO.

NGC+ Interchangeability Work Group

N G C + W O R K G R O U P (20 0 5 )

• Formed by FERC to examine and update gas interchangeability standards

• “Concerns exacerbated by North American natural gas supply being unable to meet current or projected demand.”

W HI TE PAP E R O B J E C TI V E

• To define acceptable ranges of natural gas characteristics that can be consumed by end users while maintaining safety, reliability, and environmental performance.

NGC+ Interim Guidelines

• A Range of plus and minus 4% Wobbe Number Variation from Local Historical Average Gas, or, alternatively, Established Adjustment or Target Gas for the Service Territory.

• Subject To: Maximum Wobbe Number Limit: 1,400

• EXCEPTION: Service Territories with Demonstrated Experience with Supplies exceeding these Wobbe Limits may continue to use Supplies conforming to this Experience as long as it does not Unduly Contribute to Safety and Utilization Problems of End Use Equipment.

Wyoming’s Rule Initiative

G OV E R N O R M E AD ’S D I R E C TIVE

• Streamline Government

• Reduce Number and Length of Existing Rules by One-Third

• Eliminate Obsolete and Unnecessary Rules

• Make Rules more Transparent, Concise and Understandable

W P S C R E S U LT S

• Reduced from 8 Chapters to 5 (37.5% reduction)

• Reduced from 139 Pages to 93 (33% reduction)

• Reduced from 170 Sections to 94 (45% reduction)

WPSC Rules – Quality of Service

•Chapter 3, Section 1(c)(v)(B):• Gas utilities shall monitor changes to tariff-established

Wobbe Indices.

• Unless otherwise authorized by the Commission, a Wobbe Index for a DDA that deviates more than 4% from the established Wobbe Index is considered a change in service.

WPSC Rules – Change in Service

• Chapter 3, Section 2 • A change in service is a substantial change made by a utility in the type of

service rendered in a DDA that affects the efficiency of operation or requires adjustment of customer appliances. Upon a change in service, a utility:

• (a) Shall notify the Commission and affected customers, in advance, if possible; and

• (b) May be ordered to inspect and adjust the appliances of the affected customers in the DDA to the new conditions without charge.

• (i) The Commission may defer the inspection and appliance adjustment requirement if the circumstances warrant, or, pending the utility’s analysis of gas quality and associated safety parameters in the DDA.

WPSC Rules – Gas Utility Quarterly Reports

•Chapter 3, Section 30• Gas utilities shall quarterly report, using forms provided

by the Commission:

• The weighted mean monthly heating value of gas supplied to each DDA during the quarter, including the Wobbe Index.

• Gas leaks.

Wyoming’s Regulatory Process

• Standard Form

• Map

• Color Representations

Quarterly Reports

• Staff Separates DDAs into Three Categories

• Analyze/Research Problem DDAs

Staff Analysis and Compilation • OM Agenda Item

Every Quarter

• Utilities Participate to Discuss Anomalies or Solutions

Commission Consideration

Kara Brighton, Commissioner2515 Warren Avenue, Suite 300Cheyenne, Wyoming 82002

307-777-7427kara.brighton@wyo.gov

QUESTIONS