Currently, pipeline operators are required to comply with the regulations as stated or ask for a “waiver” of the requirement. The term “waiver,” however, inaccurately describes what occurs when a company is complying with the regulations but believes it can do so in a different manner than that specifically stated in the regulations. A “special permit,” whether granted temporarily or permanently, is a more accurate description of what is being granted. Any alternative approach to a regulation as written must still “meet or exceed” the existing regulation. The proposed also changes (2) add a definition for “span of control,” which describes pipeline operators’ ratio of fully operator qualified supervisors to non-qualified workers who are completing pipeline work. A proposal (3) to change the definition of “covered task,” is included as well. All pipeline workers must be operator qualified to complete covered tasks. However, the term “covered task” now only applies to repairs made on a pipeline. The term would be amended so it also applies to pipeline construction, not only repair, work, meaning that workers would also have to be operator qualified to perform construction on pipelines, which the rules do not now specify. Finally (4) operator qualification programs would have to be revised to make clear that to be “operator qualified” workers must have been evaluated for their “knowledge, skills, and abilities” (KSA’s) to complete each covered task.

Pipeline operators may define “covered tasks” and the training necessary to become operator qualified must use the individual operator’s system for which the worker is being qualified. Further, although written tests are not required to test workers’ repair or construction knowledge, when written tests are used, they must be offered in a secure setting that precludes opportunities to cheat. A passing grade on a written test will have to include some basic requirements; for instance, a worker cannot be deemed to have passed a written exam if the worker incorrectly answered any question about how to respond to a “abnormal operating condition” (AOC), which is a pipeline condition that can cause an incident. More generally, operators must explain their “management of change” process for when they make changes to their own operator qualification protocols, such as when and how a task, process, or span of control changes. Operators would have to develop a method to keep records and allow real-time checks of which workers are operator qualified and for which tasks on any worksite. It should also be apparent when those credentials expire.

The full text of the filing and the full record of the proceeding may be reviewed online at the Department of Public Service web page: www.dps.ny.gov. The Commission may adopt, reject or modify, in whole or in part, the action proposed and may resolve related matters.

Statutory Authority:

Public Service Law (PSL) §§ 4, 5, 65, and 66 assign to the Public Service Commission (PSC, Commission) jurisdiction, supervision, powers, and duties over natural gas (and other utility) corporations in New York State and the conveying, transportation, and distribution of gas, which includes “all powers necessary or proper,” to ensure that gas service is “safe and adequate and in all respects just and reasonable.” The PSC has general supervision of all pipeline corporations that deliver and otherwise provide service to end-use natural gas and steam customers operating throughout the State and of all property owned, leased or operated by a gas company in connection with or to facilitate the conveying, transportation, distribution, or furnishing of gas for light, heat or power. PSL §§ 4(1), 5(1)(b), 65(1) and 66(1). Pursuant to its statutory mandate to ensure safe and adequate gas service, in 1968 the Commission adopted gas safety regulations, found primarily in 16 NYCRR Part 255, which have been amended from time to time to further ensure the safety of New York’s natural gas delivery system.

In 1994, the federal Natural Gas Pipeline Safety Act (the Act), 49 USC § 60101 et. seq., included within federal jurisdiction all intrastate pipelines for safety purposes. The United States Department of Transportation (USDOT) also established minimum safety standards that apply to “owners and operators of pipeline facilities” 49 USC § 60102(a)(2)(A); 49 USC § 60102 (a)(2)(C), 49 CFR §§ 192.801-192.809. The USDOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA), acting through its Office of Pipeline Safety, administers and enforces federal safety standards. A State may, however, pursuant to 49 USC § 60105, assume oversight and enforcement authority over intrastate pipeline facilities if the State submits a certification to USDOT/PHMSA that the State has adopted each applicable federal standard. A State that has submitted a current certification under § 60105(a) must adopt PHMSA regulations but also may adopt additional or more stringent safety standards for intrastate pipeline facilities as long as the standards are compatible with the minimum federal standards. 49 USC § 60104(c). The New York State Department of Public Service is PHMSA’s agent for safety purposes.

Pursuant to this statutory obligation, the Commission is proposing to adopt stricter training and testing requirements for workers who design, install, and repair pipelines in New York. For instance, training workers on the same system on which workers will be performing repair and construction work will ensure the procedures for operating each system are followed. One gas company may have a low-pressure system and another may have a high-pressure system; therefore, different procedures for operating each system will exist. Similarly, “abnormal operating conditions” (AOC) can exhibit different properties depending on the mechanics of each pipeline system. Requiring that written test-takers answer all questions about abnormal operating conditions correctly to become operator qualified is necessary because any one incorrectly repaired AOC can cause catastrophic problems, such as that which occurred in Merrimack, Massachusetts in 2018. Relatedly, securely offering written tests avoids cheating on those tests. Finally, when on-site to perform work on a certain pipeline, updated and accurate credentials must be readily available given that sub-contractors often complete work for utilities.

Legislative Objectives:

The objective of the PSC’s empowering statute is to ensure the safe and adequate delivery of natural and other fuel gas. The proposed amendments to 16 NYCRR Part 255 achieves these objectives because the amendments require hands-on training and evaluation for workers who design, build, operate, and maintain pipelines. Further, Commission approval of Special Permits allows the industry flexibility in complying with safety standards because operators can implement comparable technological and service improvements that meet or exceed current standards when the new approach is made possible rather than having to wait for industry-wide changes to be adopted. The proposed regulatory changes are necessary because the health and safety of the public depends on properly-trained and qualified individuals who both understand the system on which they are working and are told when changes in operating procedures are made. The direct, practical, impact that the proposed amendments will have is to make the provision of gas services safer for everyone, including the on-site workers themselves.

Needs and Benefits:

The purpose of the proposed changes is to improve the safety of pipelines in New York by better training the workers who install those pipelines. Although PHMSA and the DPS have had in place Operator Qualification requirements for 20 years, the need to make the requirements more specifically tied to hands-on, practical, training and evaluation and to make them more comprehensive first became evident in 2014, during the DPS’s investigation of a major gas explosion in East Harlem, New York (which resulted in eight fatalities). Staff learned that the gas company worker who had completed the failed fuse involved in that incident had lapsed Operator Qualifications (Op Qual). Further investigation revealed that the Op Qual training and evaluation that had been provided to that and other workers had not included an important, and required, test that confirms that workers know how to successfully complete a plastic fusion when joining pipes (the “destructive test”). Then, in December 2016, a whistleblower alerted the DPS that a contractor for two large utilities had been distributing answer sheets to written Op Qual tests that are used to evaluate worker knowledge of gas systems and workers’ ability to identify abnormal operating conditions (AOCs), conditions that often warrant an emergency response. During subsequent re-digs of facilities constructed and repaired by workers who had taken written tests when the answer sheets were widely available, DPS observed and otherwise learned that more than 2,000 regulatory safety violations had occurred on newly constructed pipelines in New York. Further, pipeline operators need to make specific improvements in their Operator Qualification programs and need to require Op Qual with respect to construction tasks in addition to operations and maintenance tasks.

Proposed amendments to 16 NYCRR § 255.3 (Definitions) are made solely to define terms used in the proposed training and evaluation amendments. For instance, the term, “Span of Control,” refers to the “ratio of nonqualified to qualified individuals where the nonqualified individual may be directed and observed by a qualified individual when performing a covered task.” While operators will establish the span of control required for each of their covered tasks based upon the complexity of the task, operators must abide by the span of control they establish in their Operator Qualification program.

Finally, with respect to the proposed change that allows operators to apply for a “Special Permit” (16 NYCRR § 255.13), this would occur when the operator proposes an alternative way to implement existing safety rules. A Commission-approved “Special Permit” not only better describes the actual process when a regulatory requirement, as written, would not adequately address a specific circumstance, it also maintains safety because any new approach to fulfilling a regulatory safety requirement must either meet or exceed the precise safety standard preserved in the regulations. A Special Permit will replace, perhaps only on a temporary basis, the regulation as written and must achieve the same measure of safety as the existing language in the regulation. PHMSA, from time to time, grants “Special Permits” in lieu of “waivers” for similar reasons. Operators would need to petition the Commission and justify Commission approval of a Special Permit, showing the alternative compliance proposal meets or exceeds existing safety requirements.

The practical impact of the proposed amendment to the requirement that gas companies establish a Mutual Aid Plan (whereby nearby operators assist during an emergency on one operator’s system) is that everyone working on the system in an emergency is able to identify and correct abnormal operating conditions on the gas system when emergencies occur. The public will be made safer because better-trained pipeline operators will be assisting to correct operations during an emergency with assistance from other operators who have been similarly trained and qualified.

Costs:

Costs to Private Safety-Regulated Parties:

Operators have been required to Operator Qualify anyone who performs operations and maintenance tasks on pipeline facilities since 1999. The improvements in this rulemaking simply ensure that every person working on a pipeline is sufficiently qualified to complete each task they are assigned to do or are directly supervised by an individual who is fully qualified to complete that task. While the cost to train workers may go up somewhat, that may not necessarily occur because some operators may have adopted some or all of the proposed processes in the proposed rules since the Department held its 2017 Technical Conference or even before the 2017 Technical Conference.

The proposed requirements more specifically make sure operators do not take shortcuts and are able to readily confirm that a worker is fully qualified to complete the task at hand.

Costs to Local Government:

There are no anticipated added costs to local governments.

Costs to the Public Service Commission or the Department of Public Service:

Operators’ documentation of worker training and testing will add to the annual auditing practices of the PSC and DPS, but to the extent that the confirmation will improve gas safety and may avoid gas incidents, it could reduce PSC compliance and enforcement costs.

Costs to Other State Agencies:

There are no known or identifiable costs to other State agencies or offices of State government.

Local Government Mandates:

None.

Paperwork:

Pipeline operators are already required to retain records for each worker who is trained and qualified; therefore, any increase to existing paperwork requirements would be limited. The only addition will be to include tasks that are newly deemed a “covered task.” These would include tasks related to construction and some engineering functions. This record-keeping is necessary so that Company job-site inspectors, or DPS auditors on site, can confirm that the workers present have been evaluated and deemed qualified to work on the pipeline task they are completing. Which covered tasks require which training will be defined by each operator. The retention of records may be electronic, which will reduce paperwork while also allowing that records of Operator Qualified workers be kept.

Duplication:

There are no relevant State regulations that duplicate, overlap, or conflict with the proposed revisions.

Alternatives:

None. Pipeline operators have been managing Operator Qualification programs for more than 20 years and, over time, their oversight has weakened, allowing lapses in Op Qual credentials, failures to evaluate skill levels on every type of task completed, and an inability to confirm after-the-fact the extent to which a worker had been Operator Qualified when they completed a task.

Federal Standards:

The proposed Operator Qualification standards in the pending regulations are based upon Operator Qualification regulations PHMSA proposed in 2015. While PHMSA has not yet acted upon its proposal, it is possible PHMSA will adopt its own Op Qual rules for operators nationwide. If PHMSA does adopt its 2015 proposed rules, New York will be required to adopt them as well. States may, however, adopt rules that are more stringent than PHMSA’s.

Compliance Schedule:

The proposed revisions would be effective upon publication of a Notice of Adoption filed in the New York State Register. Operators would be allowed six months to incorporate changes into their existing written OP Qual plans, nine months to implement those plans, and 12 months to train and qualify workers under the new plans.

1. Effect of rule: The proposed rule improves pipeline operators’ training and testing of workers who complete any work that affects the integrity of a pipeline in New York State.

2. Compliance requirements: Any additional burden on industry is incremental to existing requirements to train their workers and keep records of that training and qualification process.

3. Professional services: There are no professional services that local governments will need to comply with the changes associated with this rule. Local Governments that operate gas systems and small pipeline operators may train their own workers as long as the operators do so within their identified span of control. Although written tests must be provided by a secure source, written tests are not required to be operator qualified.

4. Compliance costs: Costs to industry and local municipal gas companies will be minimal. If necessary, regulated gas companies can recover any added costs associated with the new training requirements in rates; recordkeeping of qualified workers is already required of operators, although the new recording requirements will be more complete.

5. Economic and technological feasibility: The proposed rule does not require any specialized technology for compliance.

6. Minimizing adverse impact: No adverse impacts exist.

7. Small business and local government participation: Small businesses and local governments are not affected by the rule changes. However, the PSC will comply with the New York State Administrative Procedure Act (SAPA) section 202-b (6) by accepting public comments to the Notice of Proposed Rulemaking and will be summarizing comments and responding to comments that are received.

8. Cure period: No cure period is included in the proposed rule. Gas Safety Section Staff at the Department of Public Service typically offers utilities a thirty (30) day cure period to correct deficiencies in biannual audit findings and prior to recommending the pursuit of any enforcement.

1. Types and estimated numbers of rural areas: This rule applies to the entire State and impacts all rural areas of the State.

2. Reporting, recordkeeping and other compliance requirements; and professional services: The proposed rule would require operators of all pipelines to develop and implement Operator Qualification training and testing programs for professionals in the industry who design, construct, alter, or repair pipelines. Pipeline operators will be required (although most, if not all, already do) provide hands-on training followed by practical evaluations that test individuals’ skills, and operators will be required to keep records of their Operator Qualified workers. There are no additional burdens on industry to increase reporting requirements resulting from the proposed rule. Since the industry has traditionally conducted in-house training and testing of its employees and contractors, no professional assistance requirement to comply with these Operator Qualification programs elements is anticipated. A small number of towns in New York State operate their own municipal gas corporations and under the proposed rule would be required to make sure their workers are able to recognize abnormal operating conditions and can otherwise complete construction and repair tasks accurately and in compliance with safety regulations. Operators will also have to retain readily available documentation to show that workers have been properly trained and tested on the tasks they are completing; however, larger gas companies have already begun to offer assistance by making training and assessments readily available to smaller gas companies.

3. Costs: Costs to industry, municipalities, and unions relative to compliance with improvements to operator qualification programs are currently unknown. However, since the new requirements primarily refine record keeping (which can be electronic), communication of changes about company procedures, and ongoing worker knowledge, skills, and ability evaluations, all of which have already should have been part of operator qualification programs, the costs should not be significant. Potential offsets to minimize adverse impacts on small businesses could include adding such costs to utility operation and maintenance budgets to socialize them among utility ratepayers. Larger gas operators can join with smaller operators to train and test individuals for many of the tasks for which adequate training is necessary to keep pipeline systems safe.

4. Minimizing adverse impact: No adverse impacts exist relative to the operator qualification training and testing requirements. In fact, the added safety of better trained and tested workers can save lives. No adverse impacts exist relative to the use of the term “special permit” to refer to alternative actions that might allow an LDC to deviate from the precise written rules upon a showing to the Commission that the alteration meets or exceeds existing safety language.

5. Rural area participation: The PSC will comply with the New York State Administrative Procedure Act (SAPA) section 202-bb (7) by assuring that public and private interests in rural areas have been given an opportunity to participate in the rule making process. This participation has already occurred in a 2017 Technical Conference to which all operators were invited.

Furthermore, the PSC will be accepting public comments to the Notice of Proposed Rulemaking and will be summarizing and responding to the comments that are received. The Secretary of the Public Service Commission will also be issuing a notice to stakeholder groups on a distribution list to apprise members of this rulemaking and to solicit comments.

1. Nature of impact: Compliance with the requirement that pipeline operators must train and assess the people who complete covered tasks on pipelines under the proposed operator qualification rules will not impact existing jobs except to better train workers. In fact, better training throughout the pipeline operator workforce will allow professional movement among the industry. Adding the requirement that workers be supervised by someone already operator qualified will ensure a better trained workforce for all pipeline operators. Better trained workers may help improve impacts to worker income.

2. Categories and numbers affected: All pipeline operators and contract workforce they hire to perform construction, operations and maintenance work, including rate-regulated and non-rate-regulated workers will receive more comprehensive training.

3. Regions of adverse impact: This proposed rulemaking will not have a disproportionate adverse impact on any specific area for jobs or employment opportunities in New York State.

4. Minimizing adverse impact: Operators are already required to hire properly qualified pipeline workers. No adverse impact is expected.

(19-G-0376SP1)