Title of Regulation: 20VAC5-360. Licensed Professional Engineer to Exercise Responsible Charge over Certain Natural Gas Engineering Projects (adding 20VAC5-360-10 through 20VAC5-360-50).

Statutory Authority: §§ 12.1-13 and 56-257.2:1 of the Code of Virginia.

Effective Date: January 1, 2022.

Agency Contact: Lauren Govoni, Director, Utility and Railroad Safety Division, State Corporation Commission, Tyler Building, 1300 East Main Street, P.O. Box 1197, Richmond, VA 23218, telephone (804) 371-9590, FAX (804) 371-9734, or email lauren.govoni@scc.virginia.gov.

Summary:

The regulatory action establishes a new chapter, 20VAC5-360, Licensed Professional Engineer to Exercise Responsible Charge over Certain Natural Gas Engineering Projects. The new regulation requires that licensed professional engineers exercise responsible charge over certain pipeline projects undertaken by natural gas companies jurisdictional to the State Corporation Commission where such projects, among other things, present a material risk to public safety and includes a mechanism by which operators may request a temporary waiver of such regulations. Changes to the proposed regulation specify gas engineering projects and activities over which professional engineers are required to exercise responsible charge.

AT RICHMOND, MAY 13, 2021

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. URS-2020-00052

Ex Parte: In the matter of adopting new
rules of the State Corporation Commission
requiring licensed professional engineers to
exercise responsible charge over certain
pipeline projects under § 56-257.2:1
of the Code of Virginia

ORDER ADOPTING REGULATIONS

During its 2020 Session, the Virginia General Assembly enacted Chapter 822 (SB 385) of the 2020 Virginia Acts of Assembly ("Act"), which became effective on July 1, 2020. The Act, inter alia, amended the Code of Virginia ("Va. Code") by adding a section, § 56-257.2:1, to require the State Corporation Commission ("Commission") to promulgate regulations requiring that a licensed professional engineer exercise responsible charge over engineering projects that (i) involve gas pipeline facilities, as defined in the federal regulations promulgated under 49 U.S.C. § 60101 et seq., as amended and adopted by the Commission, and the federal pipeline safety laws, and (ii) may present a material risk to public safety. These regulations are in furtherance of the Act's related amendment to a provision of the Va. Code that, inter alia, had generally exempted employees of Commission-regulated public service corporations from professional engineer licensing, when those employees provided engineering services in connection with public service corporations' facilities regulated by the Commission. The Act further required the Commission to convene a stakeholder group ("Stakeholder Group"), including representatives of natural gas utilities in the Commonwealth, and to direct such stakeholder group to develop and propose to the Commission recommendations concerning such regulations no later than December 1, 2020. Pursuant to the Commission's May 29, 2020, Order in Case No. URS-2020-00052, the Staff of the Commission ("Staff') filed the Staff Report which included recommendations and proposed regulations compiled as a result of the greater Stakeholder Group.

On December 9, 2020, the Commission entered an Order for Notice and Comment in this proceeding which, among other things, permitted the filing of comments on the proposed regulations ("Proposed Rules") by interested persons and the Staff. The Proposed Rules were attached to the Commission's Order for Notice and Comment. Rebecca Golden, representing the Virginia Society of Professional Engineers, Joseph Hines, and the American Gas Association filed separate comments on January 26, 2021, February 2, 2021, and February 3, 2021, respectively. Washington Gas Light Company, Appalachian Natural Gas Distribution Company, Atmos Energy Corporation, Columbia Gas of Virginia, Inc., Roanoke Gas Company, Southwestern Virginia Gas Company, and Virginia Natural Gas (collectively the "LDCs" or "Joint Commenters"), filed joint comments on the Proposed Rules on February 2, 2021.

On February 25, 2021, Staff filed its comments, ("Staff Comments") including certain revisions to the Proposed Rules, offered by Staff in response to the comments provided by interested persons and the LDCs.

On April 6, 2021, the Joint Commenters filed their Motion for Leave to File Supplemental Comments and Withdraw the Request for a Hearing ("Motion for Leave and to Withdraw Request for Hearing").¹

NOW THE COMMISSION, upon consideration of the foregoing, finds that we should adopt the Proposed Rules appended hereto as Attachment A effective July 1, 2021 ("Rules") and also grant the Motion for Leave and to Withdraw Request for Hearing. As an initial matter, the Commission expresses appreciation to the Stakeholder Group and to those who have submitted written comments for our consideration. We have carefully reviewed and considered all comments filed in this matter. The Rules adopted today are intended to enhance pipeline safety in the Commonwealth. As experience is gained and lessons are learned in the regulation of pipeline safety, the Commission may update and revise these Rules as needed. In this regard, we further note that the Rules permit requests for waiver.²

The Rules we adopt herein contain modifications to the regulations that were first proposed by Staff and published in the Virginia Register of Regulations on January 4, 2021. Consideration of all comments filed in this proceeding informed our modification of those regulations as emphasized below. Although we will not comment on each Rule in detail, there are several provisions that we will address further herein.

20 VAC 5-360-30 C 2

As proposed by the Joint Commenters, we find that exempting from professional engineer review certain routine operating adjustments and like-kind component replacements, performed at district regulator stations, compressor stations, or gate stations that alter or modify the configuration or overpressure of equipment is reasonable where the operator specifies in detail the meaning of "like-kind" components within their respective Operations and Maintenance manuals required by the Commission's Pipeline Safety Standards.

20 VAC 5-360-30 C 5

We accept as reasonable the alternative language as proposed by the Joint Commenters, and the LCDs commitment to define in detail "minor adjustments" and "routine maintenance" within their respective Operations and Maintenance manuals required by the Commission's Pipeline Safety Standards.

20 VAC 5-360-30 C 7

We support the amended definition of "Public Right-of-Way", finding reasonable the amended language proposed by the Staff and endorsed subsequently by Joint Commenters.

20 VAC 5-360-30 C 8

We agree with the Staffs clarification to Rule C8 which is also supported by the Joint Commenters. We therefore endorse the following language:

Installation or abandonment of service lines connecting to transmission lines or installation or abandonment of service lines connecting to high-pressure distribution mains with a MAOP that exceeds 100 p.s.i.g.

20 VAC 5-360-30 C 10

We reject amendments to this section as proposed by Joint Commenters, finding persuasive and reasonable Staffs Comments relative to existing standards in the Code of Federal Regulations.

Accordingly, IT IS ORDERED THAT:

(1) The Rules requiring that a licensed professional engineer exercise responsible charge over certain pipeline projects under Va. Code § 56-257.2:1, 20 VAC 5-360-10 et seq., as shown in Attachment A to this Order Adopting Regulations ("Order"), are hereby adopted and are effective as of July 1, 2021.

(2) The Commission's Division of Information Resources shall forward a copy of this Order, with Attachment A, to the Registrar of Regulations for appropriate publication in the Virginia Register of Regulations.

(3) The Joint Commenters' Motion for Leave to File Supplemental Comments and Withdraw the Request for a Hearing is granted.

(4) An electronic copy of this Order with Attachment A shall be made available on the Division of Utility and Railroad Safety's section of the Commission's website: scc.virginia.gov/pages/Rulemaking

(5) This docket is dismissed.

A COPY hereof shall be sent electronically by the Clerk of the Commission to all persons on the official Service List in this matter. The Service List is available from the Clerk of the Commission.

______________________________

¹The Joint Commenters attached their supplemental comments to the Motion for Leave and to Withdraw Request for Hearing.

² 20 VAC 5-360-50.

AT RICHMOND, JUNE 24, 2021

COMMONWEALTH OF VIRGINIA, ex rel.

CASE NO. URS-2020-00052

Ex Parte: In the matter

concerning regulations required by Chapter 822

of the 2020 Acts of Assembly

ORDER ON RECONSIDERATION

On May 13, 2021, the State Corporation Commission ("Commission") issued an Order Adopting Regulations in this docket, promulgating new regulations requiring that licensed professional engineers exercise responsible charge over certain engineering projects involving gas pipeline facilities in Virginia ("Rules").

On June 1, 2021, Virginia Natural Gas, Inc., Washington Gas Light Company, Appalachian Natural Gas Distribution Company, Atmos Energy Corporation, Columbia Gas of Virginia, Inc., Roanoke Gas Company, and Southwestern Virginia Gas Company (collectively, the "Joint Commenters") filed a Limited Petition for Reconsideration ("Petition"). Specifically, the Joint Commenters sought to continue the effective date of the Rules from July 1, 2021, to January 1, 2022.

On June 3, 2021, the Commission issued an Order Granting Reconsideration for purposes of continuing Commission jurisdiction over the matter while considering the Petition, and on June 10, 2021, issued an Order scheduling additional pleadings attendant to the Petition.¹

On June 14, 2021, Commission Staff filed a letter in response to the Petition stating that Staff did not object to the request for relief in the Petition.

On June 17, 2021, the Joint Commenters filed a reply to Staff letter, noting Staff's lack of objection.

NOW THE COMMISSION, upon consideration of the matter, is of the opinion and finds that the Limited Petition for Reconsideration should be granted.

Accordingly, IT IS ORDERED THAT:

(1) The Limited Petition for Reconsideration is granted.

(2) Ordering Paragraph (1) of the Order Adopting Regulations is amended to reflect the implementation date of the Rules as January 1, 2022. The remainder of the May 13, 2021 Order Adopting Regulations remains in full force and effect.

(3) The Order Adopting Regulations is no longer suspended.

(4) This case is dismissed.

A COPY hereof shall be sent electronically by the Clerk of the Commission to all persons on the official Service List in this matter. The Service List is available from the Clerk of the Commission.

Chapter 360

Licensed Professional Engineer to Exercise Responsible Charge over Certain Natural Gas Engineering Projects

20VAC5-360-10. Purpose and scope.

This chapter delineates standards used by the commission to enforce the provisions of § 56-257.2:1 of the Code of Virginia. This chapter further details certain standards and requirements for professional engineering oversight of projects that (i) involve gas pipeline facilities, as defined in the federal regulations promulgated under 49 USC § 60101 et seq., as amended and adopted by the commission pursuant to § 56-257.2 of the Code of Virginia, and the federal pipeline safety laws and (ii) may present a material risk to public safety.

20VAC5-360-20. Definitions.

Terms used in this chapter shall have the same meaning and effect as in the federal pipeline safety laws under 49 USC § 60101 et seq. and 49 CFR Parts 191, 192, 193, 195, and 199. In addition, the following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Act" means Chapter 822 of the 2020 Acts of Assembly.

"Bypass" means a pipeline connection or control mechanism installed in order to allow construction, maintenance, or repair work, thus altering the flow of gas or hazardous liquid to different facilities other than those transporting the gas prior to installation of the pipeline connection or control mechanism.

"Commission" means the Virginia State Corporation Commission.

"Commission's pipeline safety standards" means standards for gas and hazardous liquid pipeline facilities adopted, prescribed, or enforced by the commission pursuant to §§ 56-257.2 and 56-555 of the Code of Virginia; 49 USC § 60101 et seq.; and 20VAC5-300-70, 20VAC5-307-10, and 20VAC5-308-10.

"Compressor stations" means pipeline facilities that compress natural gas, increasing the pressure and providing the energy needed to move the gas through the pipeline.

"District regulator stations" means a pressure regulating station that controls pressure to a high-pressure or low-pressure distribution main.

"Emergency work" means nonroutine maintenance or repair work, such as repairs to hazardous leaks, that should be performed immediately. Examples include third party damages, repairs, work to maintain priority service, reduce customer outages as a matter of safety, and compromises to system integrity as a cause of overpressurization.

"Engineered structures" means distribution mains vertically attached to buildings, overpasses, or water crossings.

"Gate station" means pressure regulating stations where custody of natural gas or hazardous liquid is transferred from an interstate supplier to a Virginia public service company.

"Maintenance" means any repair or rehabilitation activity performed on a pipeline facility or prescribed by 49 CFR 192, Subpart M.

"MAOP" means maximum allowable operating pressure.

"O&M Procedures" means any operations or maintenance procedures or processes prepared by the operator for conducting operations and maintenance activities or emergency response, as prescribed by 49 CFR 192, Subpart L.

"Peak shaving facilities" means pipeline storage facilities designed to house natural gas or propane gas for reintroduction into an operator's system at times of peak demand. These facilities may store liquefied natural gas or liquefied petroleum gas.

"P.E. stamp" means a professional seal as prescribed by 18VAC10-20-760, pertaining to use of seal.

"Public right-of-way" means any portion of a designated interstate, [ freeway highway ], or [ limited access ] expressway [ , as well as any other principal arterial roadway with four or more lanes, or freeway ] as defined in the Federal Highway Administration's Highway Functional Classification Concepts, Criteria and Procedures. Section 3.1 (see: https://www.fhwa.dot.gov/planning/processes/statewide/related/highway_functional_classifications/fcauab.pdf).

"Professional engineer" or "P.E." means a person who is qualified to practice engineering by reason of special knowledge and use of mathematical, physical, and engineering sciences and the principles and methods of engineering analysis and design acquired by engineering education and experience, and whose competence has been attested by the Board for Architects. Professional Engineers, Land Surveyors, Certified Interior Designers and Landscape Architects through licensure as a professional engineer.

"PSIG" means pounds per square inch, gauge.

"Repair" means any activity on a distribution main or transmission line that calls for removing the leak by cutting out and replacing a cylindrical piece of pipe, installing a pressure-carrying full encirclement welded split sleeve of appropriate design, or any other permanent repair that is consistent with 49 CFR § 192.717.

"Tie-in" means any process of connecting a newly installed pipeline to either an existing pipeline or another newly installed pipeline by means of joining.

"Uprating" means the act of increasing maximum allowable operating pressures for pipelines.

20VAC5-360-30. Use of professional engineers.

A. Any gas pipeline engineering plans or specifications for engineering work or services that (i) involve gas pipeline facilities, as defined in the federal regulations promulgated under 49 USC § 60101 et seq., as amended and adopted by the commission in the commission's pipeline safety standards pursuant to § 56-257.2 of the Code of Virginia, and the federal pipeline safety laws and (ii) may present a material risk to public safety must be produced by or under the direct charge and supervision of a professional engineer with sufficient knowledge of a gas company's natural gas distribution system, and such plans or specifications must bear the professional engineer's stamp, in accordance with § 54.1-406 of the Code of Virginia.

B. A professional engineer must ensure that the plan or specification conforms to the applicable pipeline safety laws, regulations, and standards, and the review and use of a professional engineer's stamp must comply with the professional and ethical obligations set forth in Virginia.

C. Engineering services involving gas pipeline facilities and that present a material risk to public safety shall include:

1. New installation of district pressure regulator stations, compressor stations, or gate stations.

2. Reconfiguration or physical facility changes, [ other than routine operating adjustments and like-kind replacements, ] performed at district pressure regulator stations, compressor stations, or gate stations that alter or modify the configuration or overpressure protection of equipment.

3. Installation, uprating, repair, or abandonment of intrastate transmission pipelines.

4. Any distribution main piping modifications or replacement work falling within established district regulator awareness zones as established by each operator.

5. [ Any construction Construction ] or maintenance work on distribution mains [ , other than routine maintenance, inspections, and minor adjustments, ] that changes the system operating pressure and requires a bypass or a change in the system operating pressure that involves more than two tie-ins.

6. Installation of distribution mains where such mains attach to bridges or other engineered structures.

7. Installation of distribution mains, including replacements and extension projects, that are within or cross any public right-of-way.

8. Installation or abandonment of service lines connecting to transmission lines or [ a installation or abandonment of service lines connecting to ] high-pressure distribution [ main mains ] with a MAOP that exceeds [ 90 PSIG 100 psig ].

9. Installation of peak shaving facilities, to include any modifications or reconfigurations that would alter such a facility's pressure delivery characteristics.

10. Any other project in the judgment of the operator that poses a material risk to public safety.

D. A professional engineer's stamp is not required for emergency work, but a professional engineer's stamp is required after the emergency has been resolved if the remaining work or services are on a project that presents a material risk to public safety.

E. Incorporation of Guidelines into Operations and Maintenance Procedures: Each public service company shall incorporate the provisions of this chapter into its written procedures as required under 49 CFR Part 192 and the commission's pipeline safety standards.

20VAC5-360-40. Documentation.

Each public service company subject to this chapter shall maintain the plans and specifications that must bear a professional engineer's stamp pursuant to this chapter at its office. These plans and specifications shall be readily accessible upon request of the commission, and they shall be maintained in accordance with the document retention timelines set forth in 49 CFR Part 192 and the commission's pipeline safety standards.

20VAC5-360-50. Commission authority.

A request for a waiver of any of the provisions in this chapter shall be considered by the State Corporation Commission on a case-by-case basis and may be granted upon such terms and conditions as the State Corporation Commission may impose.