PUCO
Definition
The mission of the Public Utilities Commission of Ohio (PUCO) is to assure all residential and business consumers access to adequate, safe and reliable utility services at fair prices, while facilitating an environment that provides competitive choices. With regard to natural gas, PUCO oversees more than 54,000 miles of distribution lines, which provide natural gas to individual users, as well as more than 6,000 miles of transmission lines. However, S.B. 315 amended Section 4905.03(A)(6) of the ORC, effective 9/10/2012, to clarify that companies engaged in gas gathering and the transport of raw or finished natural gas liquids are exempt from PUCO public utility oversight.
The Public Utilities Commission of Ohio (PUCO) regulates the safety aspects of most gas pipelines located within the state of Ohio. The PUCO Pipeline Safety section monitors the construction of these lines and conducts routine inspections and audits once the lines are placed in service.
The only exceptions to PUCO regulations are production lines, which are regulated by the Ohio Department of Natural Resources, and liquids or interstate lines, which are regulated by the federal Pipeline and Hazardous Safety Administration (PHMSA).
link: www.puco.ohio.gov
Discussion
PUCO Jurisdiction
PUCO regulates companies operating as public utilities in the state of Ohio. "The public utilities commission is hereby vested with the power and jurisdiction to supervise and regulate public utilities . . . ." ORC §4905.04. A "public utility" can include a "natural gas company" or a "pipeline company," as defined under ORC §4905.03:
(E) A natural gas company, when engaged in the business of supplying natural gas for lighting, power, or heating purposes to consumers within this state. Notwithstanding the above, neither the delivery nor sale of Ohio-produced natural gas or Ohio-produced raw natural gas liquids by a producer or gatherer under a public utilities commission-ordered exemption, adopted before, as to producers, or after, as to producers or gatherers, January 1, 1996, or the delivery or sale of Ohio-produced natural gas or Ohio-produced raw natural gas liquids by a producer or gatherer of Ohio-produced natural gas or Ohio-produced raw natural gas liquids, either to a lessor under an oil and gas lease of the land on which the producer's drilling unit is located, or the grantor incident to a right-of-way or easement to the producer or gatherer, shall cause the producer or gatherer to be a natural gas company for the purposes of this section. All rates, rentals, tolls, schedules, charges of any kind, or agreements between a natural gas company and other natural gas companies or gas companies providing for the supply of natural gas and for compensation for the same are subject to the jurisdiction of the public utilities commission. The commission, upon application made to it, may relieve any producer or gatherer of natural gas, defined in this section as a gas company or a natural gas company, of compliance with the obligations imposed by this chapter and Chapters 4901., 4903., 4907., 4909., 4921., and 4923. of the Revised Code, so long as the producer or gatherer is not affiliated with or under the control of a gas company or a natural gas company engaged in the transportation or distribution of natural gas, or so long as the producer or gatherer does not engage in the distribution of natural gas to consumers. Nothing in division (E) of this section limits the authority of the commission to enforce sections 4905.90 to 4905.96 of the Revised Code.
(F) A pipe-line company, when engaged in the business of transporting natural gas, oil, or coal or its derivatives through pipes or tubing, either wholly or partly within this state, but not when engaged in the business of the transport associated with gathering lines, raw natural gas liquids, or finished product natural gas liquids;
Then the statute goes on to provide, “As used in this section, "gathering lines" has the same meaning as in section 4905.90 of the Revised Code, and "raw natural gas liquids" and "finished product natural gas liquids" have the same meanings as in section 4906.01 of the Revised Code. ORC § 4905.03.
It is worth noting that the Ohio Supreme Court held that LP gas suppliers did not meet the definition of either a "natural gas company" or "pipeline company” thus were not subject to PUCO jurisdiction because LP gas was not “natural gas.” Haning v. PUC (1999), 86 Ohio St. 3d 121.
PUCO vis a vis HLPSA
The appendix to the HLPSA states, "The HLPSA leaves to exclusive Federal regulation and enforcement the 'interstate pipeline facilities,' those used for the pipeline transportation of hazardous liquids in interstate or foreign commerce." 49 CFR part 195, Appendix A. So, to the extent that HLPSA and PUCO do not conflict one does not preempt the other.
PUCO Regulation
PUCO regulates the safety aspects of most gas pipelines located within the state of Ohio. The PUCO Pipeline Safety section monitors the construction of these lines and conducts routine inspections and audits once the lines are placed in service. The only exceptions to PUCO regulations are production lines that are regulated by the Ohio Department of Natural Resources, and liquids or interstate lines that are regulated by the federal Pipeline and Hazardous Safety Administration (PHMSA).
PUCO general authority after S.B. 315
See: Bill Analysis, S.B. 315, Ohio Legislative Service Commission.
SB 315 amended Section 4905.03(A)(6) to clarify that companies engaged in gas gathering and the transport of raw or finished natural gas liquids are exempt from PUCO public utility oversight. The new law achieves this by exempting those pipeline companies from the definition of "pipeline company" for purposes of the regulation of public utilities. That definition is cross-referenced in the definition of "operator" under the pipeline safety law. By making this change, the bill makes clear those companies are not "operators" under the pipeline safety law.
It exempts gas gathering pipelines and processing plant gas stub pipelines from the PUCO's safety regulation over gathering lines.
It also exempts from regulation as a public utility certain natural gas gatherers and producers engaged in the business of supplying natural gas for lighting, power, or heating purposes to Ohio consumers, and that deliver or sell Ohio-produced raw natural gas liquids.
But SB 315 adds to the current law duties of the Public Utilities Commission (PUCO) regarding intrastate pipeline safety the requirement that the PUCO perform all regulatory and enforcement duties required under Ohio's pipeline safety law, ORC 4905.91.
PUCO may, for the purpose of protecting the public safety regarding intrastate pipelines, enter into a cooperative agreement or memorandum of understanding with another state agency for consultation services and the exchange of advice and technical expertise to assist the PUCO in exercising its regulatory authority over public utilities.
PUCO pipeline safety standards
PUCO requires an operator of a gas gathering pipeline or processing plant gas stub pipeline to comply with the applicable pipe design requirements under the minimum federal safety standards for the transportation of natural gas by pipeline, i.e., 49 CFR Part 192.
Pursuant to ORC 4905.911, PUCO shall require an operator of operator of a gas gathering pipeline or processing plant gas stub pipeline that was completely constructed on or after 9/10/2012 and that transports gas produced by a horizontal well (see ORC 1509.01), to comply with the applicable pipe design requirements of 49 C.F.R. 192 subpart C. Operators must also do all of the following regarding the pipeline:
• Design, install, construct, initially inspect, and initially test the pipeline in accordance with the requirements of 49 C.F.R. 192 if the pipeline is new, replaced, relocated, or otherwise changed;
• Control corrosion according to requirements of 49 C.F.R. 192 subpart I if the pipeline is metallic;
• Establish and carry out a damage prevention program under 49 C.F.R. 192.614;
• Establish and carry out a public education program under 49 C.F.R. 192.616;
• Establish the maximum allowable operating pressure (MAOP) of the pipeline under 49 C.F.R. 192.619;
• Install and maintain pipeline markers according to the requirements for transmission lines under 49 C.F.R. 192.707;
• Perform leakage surveys according to requirements in 49 C.F.R. 192.706;
• Retain a record of each required leakage survey conducted under 4905.911(A)(2)(g) and 49 C.F.R. 192.706 for five years or until the next leakage survey is completed, whichever time period is longer.
Filing of pipeline information with PUCO prior to pipeline construction
Anyone who plans to construct a gas gathering pipeline or a processing plant gas stub pipeline subject to the pipeline safety standards must file with the PUCO Division of Pipeline Safety a form approved by the Division that includes all of the following information:
• The route of the proposed pipeline;
• The maximum allowable operating pressure of the pipeline; The outside diameter of the pipeline;
• The wall thickness of the pipeline;
• The material that the pipeline will be made of;
• The yield strength of the pipeline.
• The form must be filed with the Division not later than 21 days prior to the commencement of construction of the pipeline.
Filing of pipeline information with PUCO after completion of pipeline construction
The operator of a pipeline for which information was filed with the Division prior to construction of the pipeline must file information with the Division regarding the pipeline's route and operating information not later than 60 days after the completion of construction of the pipeline.
See: Bill Analysis, S.B. 315, Ohio Legislative Service Commission.