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Millions needed to replace at-risk natural gas pipes in Pennsylvania

| Tuesday, April 21, 2015, 10:39 p.m.

Pennsylvania's highest-risk natural gas distribution system needs to raise millions of dollars a year to accelerate the replacement of its aged, dangerous pipelines, state regulators said Tuesday.

Gas customers in Philadelphia would experience rate hikes if the city's utility, Philadelphia Gas Works, follows the recommendations in a report issued by the state Public Utility Commission staff.

“PGW's aging infrastructure and leak rates are particularly concerning, given that its territory is largely urban and is a high-population area, which can pose a potential threat to life and property,” the report said.

The largest municipally owned gas utility in the country, PGW operates 1,500 miles of cast-iron gas mains — the oldest and most leak-prone type of pipe in use. That's half of the cast iron mains being used in Pennsylvania, the report said.

PGW's estimated an 80-year timeline for replacing its cast iron and bare, unprotected steel pipe is by far the longest among the state's natural gas utilities, the Tribune-Review reported in its investigative series, “The Invisible Threat.” The next-longest schedule belongs to PECO Gas, which expects to replace its last high-risk pipe by 2047.

Western Pennsylvania's largest utilities, Columbia Gas of Pennsylvania and Peoples Natural Gas Co., plan to finish in 2029 and 2031, respectively.

For PGW, a menu of rate hikes tops the report's list of seven recommendations to speed the replacement process. Gas utilities can get state approval to add a 5 percent charge to customers' bills to cover the cost of infrastructure upgrades, called a Distribution System Improvement Charge.

The report suggests PGW increase that surcharge to 7.5 percent, 10 percent or 12 percent. That would raise between $11 million and $31 million a year and cut the timeline for at-risk pipe replacement to between 37 and 52 years, the report said. The commission would have to approve the higher rate, the report said.

Philadelphia Mayor Michael Nutter and utility spokesman Barry O'Sullivan expressed support for a rate hike. But they oppose the report's costliest recommendation, and the one that would accelerate pipeline replacement the most: borrowing as much as $33 million a year.

“Issuing new debt would only become an attractive option if there were significant and measurable near-term improvements to the safety of the people of Philadelphia,” O'Sullivan said.

Nutter opposes the report's suggestion that the city give up an $18 million annual payment from the utility, spokesman Mark McDonald said.

The utility could save $800,000 a year by getting rid of the Philadelphia Gas Commission, which oversees the utility. PGW CEO Craig White opposes that idea, O'Sullivan said.

Mike Wereschagin is a staff writer for Trib Total Media. He can be reached at 412-320-7900 or

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