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Public Service Commission


10/24/2013 Contact: 850-413-6482

PSC Approves Surcharges to Increase Pipeline Safety

TALLAHASSEE — The Florida Public Service Commission (PSC) today approved surcharges that will accelerate replacement of cast iron and bare steel distribution pipes for Peoples Gas System (Peoples), Florida Public Utilities Company (FPUC), and the Florida Division of  Chesapeake Utilities Corporation (Chesapeake).  Accelerated replacement of aging pipelines at the three natural gas utilities will increase the safety of Florida’s pipeline infrastructure.

“We are committed to working with Florida’s natural gas utilities to maintain a safe and reliable pipeline distribution infrastructure that meets consumers’ daily needs,” said PSC Chairman Ronald A. Brisé. “The Commission commends these utilities for hastening natural gas infrastructure improvements to ensure long-term safety and reliability.”
Since the PSC originally approved the pipeline replacement programs in August 2012, Peoples has replaced 36.16 miles of cast iron gas pipes, FPUC has replaced 36 miles of pipes, and Chesapeake has replaced 22 miles of pipes.  By allowing the companies to recover their costs for aging pipeline replacement, the projects are expected to be completed within 10 years and will address increased concern about pipeline safety.

The U.S. Department of Transportation has urged natural gas utilities to replace older facilities as a safety measure.  Cast iron is subject to corrosion which in turn may lead to cracking if exposed to mechanical pressures such as excavation or heavy road traffic. Pitting can occur in unprotected bare steel distribution pipes, reducing the pipeline’s structural integrity.

An annual mechanism, with quarterly reports, to track actual replacement costs, savings in operations and maintenance expense, and depreciation is required for pipeline improvement programs.  A typical Peoples’ residential bill for a customer using 20 therms will reflect a 22-cent surcharge, starting in January 2014.  The same bill for FPUC customers will reflect a 32-cent surcharge, and Chesapeake customers will see a 44-cent surcharge.

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