December 2018, Vol. 245, No. 12
Features
Replacement Projects Still Boosting Infrastructure Work
By Michael Reed, Managing Editor
With so many companies involved in natural gas distribution (P&GJ reports on 250 such companies, ranging in size from 6 million to 1,300 customers in the Annual 500 Report last month), this summary of ongoing infrastructure replacement projects is intended to provide only a representative overview of the current widespread activity.
As recently as 2016, the federal Department of Transportation (DOT) estimated 30,000 miles of cast-iron pipe still carried gas in the United States, with the highest percentage of these mains located in older eastern cities such as New York City, Philadelphia, Boston, Baltimore and Washington, D.C.
Further DOT data indicate that replacement work, while steady, is far from complete. In 2015, there were still 27,771 miles of wrought- and cast-iron gas distribution lines in service in the U.S., down from 39,342 miles since 2005, a decrease of almost 30%.
About 97% of natural gas distribution pipelines in the U.S. were made of plastic or steel at the end of 2017, according to the DOT. The remaining 3% is mostly iron pipe. Additionally, DOT data showed that during the period 2004-13, distribution companies replaced 17,000 miles of bare-steel mains, leaving about 56,000 miles of bare-steel still in operation.
The 2017 American Gas Association (AGA) playbook reported during the past decade local distribution companies (LDCs) have installed updated plastic pipelines at a rate exceeding 30,000 miles per year.
The AGA data shows that of over $21 billion of gas utility construction for 2015, $11.6 billion or about 55%, went toward gas distribution assets. Since 2010, AGA estimates, local distribution operators have replaced over 20,000 miles of cast-iron and bare-steel pipeline, and about 900,000 miles of cast-iron and bare-steel services.
With that in mind, these summaries show there is still a large volume of work to be done for decades to come through multibillion-dollar infrastructure replacement programs, many now underway nationwide, with more destined to follow.
East
Baltimore Gas & Electric (BGE) replaced about 45 miles of gas mains in 2017 and plans to complete a similar amount of replacements this year. BGE has addressed nearly 12,000 service pipes and risers during the past two years of its program.
BGE accelerated the pace of replacement following passage of Maryland’s STRIDE law in 2013 and the Maryland Public Service Commission’s approval of BGE’s accelerated plan in March 2014. STRIDE allows gas utilities to recover some of the costs of pipeline modernization as work is being done, making it possible to replace more aging infrastructure sooner. BGE invested about $55 million in 2014, $90 million in 2015, and projected 2016 investment was $113 million.
Con Edison continues to replace an average of 65 miles of cast-iron and unprotected steel gas mains each year and looks to continue at that rate for at least another 20 years. In fact, the company has proposing bumping its goal up to 100 miles a year.
The plan calls for continuation of Con Ed’s monthly patrols of its gas-delivery system, which began in 2016, as well as pilot programs testing residential methane detectors. The company maintains about 4,000 miles of gas mains and service lines in Manhattan, the Bronx, and portions of Queens and Westchester County, about half of which are targeted for replacement.
PSE&G, which has more cast-iron pipe in its system than any other utility in the nation, remained busy in 2018. Of the system’s 18,000 miles, about 3,900 miles of mains are cast-iron, according to company records. The utility is on pace to replace 510 miles of aging cast-iron and unprotected steel gas lines by the end of the year under a program approved in 2015 by the New Jersey Board of Public Utilities. Completing the entire job is expected to take about 25 years.
National Grid is nearing completion of a two-year program to replace about 100 miles of aging steel and cast-iron mains across eastern and central New York state at a cost the company places at about $1 million per mile.
National Grid’s overall effort will likely take another 20 years as the company removes pipe, some of it dating back to the 1800s, replacing it with high-density plastic pipe.
In Boston, National Grid accelerate the number of miles of older mains it is upgrading and plans to replace over 400 miles of the remaining cast-iron, wrought-iron and unclad steel pipe in that system over the next 20 years. In 2015, National Grid replaced 75.3 miles of gas lines in Rhode Island; in 2016, 64.6 miles were replaced in 2017. About 65 miles of pipe was expected to be replaced by the end of 2018.
PECO Energy, which serves 500,000 gas customers in southeastern Pennsylvania, about 90% of whom are residential, increased its main replacement pace from 14 miles to 30 miles per year in 2015 and has carried on at that pace. At the same time, the company increased its rate of bare-steel service replacement from 1,800 to 4,000 services per year.
UGI Utilities, which has 600,000 customers primarily in eastern and central Pennsylvania, has 90% of its 12,000 miles of pipeline already constructed of modern contemporary material. That still leaves more than 1,000 miles of bare steel and 300 miles of cast-iron infrastructure to replace.
The company expects to have all cast-iron gone by February 2027 with all bare-steel pipe replaced by 2041. The $1.2 billion replacement program, which began in February 2012, is on pace to update 65 miles of pipeline in 2018.
Washington Gas continues to replace about 15,950 miles of mains and over 230,000 gas services as part of its accelerated replacement program in Virginia, Maryland and the District of Columbia. The projects have been underway three years and will continue, depending on the location, from 15-40 years.
The ongoing work also targets replacement of bare and unprotected steel services, bare or unprotected targeted steel mains, cast-iron, copper and vintage plastic services. In all, 520 miles of cast-iron pipe will be replaced, the majority of it in the District of Columbia. Most of the replacement pipe will be medium-density polyethylene, the majority of which is 2-inch or smaller.
The company will spend $520 million over the next four years on infrastructure replacement projects, or an average of $130 million per year.
West
Avista Utilities, headquartered in Spokane, Wash., serves eastern Washington, northern Idaho and portions of southern and eastern Oregon. As is common in the western states, the company has never had cast-iron in its system but still maintains a 20-year program to replace 700 miles of plastic main piping and install transition tubing at about 16,000 steel tee locations. The ongoing project cost for replacing pre-1987 plastic pipe cost is about $20 million per year.
Pacific Gas and Electric Company (PG&E), which serves most of the northern two-thirds of California, replaced all system-wide cast-iron pipeline ahead of its 2014 year-end goal. Since then, it has focused on eliminating all pre-1940 steel pipe, replacing about 30 miles a year.
In 2015, PG&E replaced 62 miles of Aldyl-A pipe and continues to increase its year-over-year rate in recognition of the fact that it has about 5,450 miles of known Aldyl-A pipe in its inventory. Also, in 2015, PG&E replaced 13 miles of distribution pipe through its ongoing Reliability Main Replacement Program.
South
Alagasco, north and central Alabama’s largest natural gas utility with 460,000 residential and retail customers, invested an average of $24 million in each of the past five years to replace gas mains. As of early 2015, the company had about 1,300 miles of cast-iron and bare-steel mains still to replace.
CenterPoint Energy estimated it would spend over $2 billion on replacement and further upgrades to its system by the end of 2019 in northwest Louisiana alone. At the time, CenterPoint had 118 miles of cast-iron and 408 miles of bare-steel pipelines remaining in Louisiana and planned to remove over 1,700 miles of cast-iron pipes – 90% of its entire system – and 2,116 miles of bare steel over the course of 30 years.
Memphis Light, Gas and Water (MLGW), which is the largest three-service provider in the United States, serves customers throughout Shelby County, Tenn. The company began replacing its 330 miles of cast-iron mains in 1992 as part of a $100 million program. MLGW expects to have removed all cast-iron from its system by 2021. Along with cast-iron replacement the company plans to eliminate all the wrought iron and PVC gas pipes from its gas distribution systems by 2021.
TECO Peoples Gas is actively replacing all cast-iron and bare-steel distribution pipe in the Tampa area under a program begun in 2012. The company is spending about $8 million a year to accelerate its 10-year program, which replaces an average of 15 miles of cast-iron and 40 miles of bare-steel pipe each year.
Midwest
Columbia Gas of Ohio began replacing lines in the city’s downtown area in June 2016 as part of a larger program to improve more than 20,000 miles of its system over a 25-year period. In 2016, the company invested over $25 million in Columbus, benefiting 4,500 customers.
DTE Energy, based in Detroit, is three years into a five-year, $2.5 billion gas and electric infrastructure upgrade in which it plans to spend $1.4 billion for natural gas pipeline infrastructure that spans 20,000 square miles spread across the state. The company began a small pilot replacement project in 2007, covering 33 miles, then ramped up considerably four years later.
Dominion East Ohio, based in Cleveland, started replacing over 6,000 feet of pipelines in Ravenna, Ohio, as part of a $1.53 million project last spring, targeting the eventual elimination all 1950s-era bare-steel pipe with coated steel pipe. The work is part of a $4 billion replacement project that began in 2008 and is expected to continue through 2033. When completed, the company expects to have replaced over 5,500 miles of its 22,000-mile system.
Last Sept. 14, PUCO approved an expansion of the work and authorized an increase in the annual program investment. The ruling will allow Dominion to increase spending by up to an additional 3% in the years 2019 through 2021.
Integrys Energy Group continues to replace what will be a total of 2,000 miles of cast-iron mains within its Peoples Gas Distribution system, with a large portion of the work taking place within Chicago. In addition to the pipe, 300,000 service pipes and related meters will be installed.
The effort began in 2011 and the company expects half of its system to be brand new within 20 years. Cast-iron pipes, some of which went into service in the late-1800s, are being replaced with polyethylene plastic pipes, ranging from 2-18 inches, depending on whether the location is a residential or arterial street. Protected steel pipe, generally 24 inches but in some cases up to 42 inches, is also being installed.
The $2.5-billion project had allowed about 35,000 service pipes and 245 miles of the cast-iron conductor system to be retired in early 2015. That said, there is still plenty of work to be done.
Laclede Group (now Spire) spent $135 million on pipeline replacement for its three utilities in the St. Louis and Kansas City areas and in Alabama during both 2016 and 2017 – replacing about 235 total miles – and expects to make a similar amount of upgrades this year.
In St. Louis, Laclede Gas is replacing a low-pressure, cast-iron piping system that is decades old. The work is taking place in the city and the inner ring of surrounding suburbs. Many of the residential gas meters were installed inside basements, so the program also involves moving about 100,000 meters outside of homes to provide easier access for inspections.
Metropolitan Utilities District of Omaha (Nebraska) continues to replace its cast-iron natural gas mains. The effort coincides with replacement of the city’s water mains. The district expects to have abandoned its remaining 387 miles of cast-iron gas mains by 2027. Over coming decades, the Omaha MUD will also abandon or rehabilitate over 1,200 miles of cast-iron water mains. The size of the pipe being replaced varies but most are smaller diameter mains, measuring 3-8 inches.
Vectren, with 570,000 natural gas customers in central and southern Indiana, continues to replace gas mains and service lines in 15 cities across the service area. The multi-year program has replaced an average of 55 miles of bare-steel and cast-iron pipe each year at a cost of $37 million. In most cases, a polyethylene infrastructure is being installed ranging from 2-8 inches in diameter. Since 2009, over 260 miles of the pipe has been replaced of the 700 total miles.
Ameren Illinois, a subsidiary of St. Louis-based Ameren Corp., which serves 816,000 natural gas customers in central and Southern Illinois, has replaced all cast-iron and ductile iron piping in the distribution system. However, the company will be replacing about 80 miles of mechanically coupled steel pipe in the next four years. Ameren expects to replace all such pipe over the next 15-20 years. P&GJ
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