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PUBLIC GAS NEWS Inside this Issue

2

FERC Issues Rule on Standards of Conduct

2

Government Releases LIHEAP Funds

3

Key House Committee Chairmen Release Draft Climate Change Legislation

3

Vent-Free Home Appliances Are Safe

4

APGA Urges PHMSA to Limit Control Room Management Rule To Pipeline Controllers

4

PHMSA Briefs APGA Members on Integrity Management

4

THE SOURCE Needs You!

5

Market Development Conference Program... A Winner!

6 7 8

APGA 2009 Calendar Survey How Americans Are Cutting Back Member Profile: Elk River Public Utility District

Download the November 2008 APGA Board of Directors Meeting Materials Please log into the membersonly section of www.apga.org and look under the “Top Five Downloads” section on the home page for the materials

October 27, 2008 Volume 27 Number 18

Government Releases LIHEAP Funds

Increased LIHEAP funding will make a significant difference to families having to make the decision between paying their energy bills versus other necessities like medication or childcare.

On October 16, 2008, the President directed the Federal Department of Health and Human Services to release $5.1 billion to the states for the Low Income Home Energy Assistance Program (LIHEAP). This is the fully authorized amount of LIHEAP funding provided under the recently-enacted Continuing Resolution for fiscal year 2009. The law requires this funding be provided to states within 30 days of enactment of the resolution which was signed into law on September 30. Prior to the bill’s passage in Congress, APGA sent a letter to Senate and House leadership urging full funding for the LIHEAP program. The letter stated that low-income

households spend on average 15 percent of their budget on home energy costs, while other households only spend roughly 3.4 percent of their annual budget on such costs. The letter went onto say that the need for the funding increase is critical because of the severe decline in the program’s purchasing power as a result of continued high energy prices. For example, between FY 2003 and FY 2007 the purchasing power of the average LIHEAP grant for natural gas declined from 58.2 percent to 37.6 percent. Increased funding will make a significant difference to the lives of some of the least-fortunate families across continued on p. 2


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www.apga.org

October 27, 2008

FERC Issues Rule on Standards of Conduct

APGA Public Gas News

Publisher: Bert Kalisch Editor: Kristin Gomez Writers: APGA Staff Layout: Marghet Hager For Questions and Comments: Marghet Hager 202-464-0832 or mhager@apga.org Public Gas News is published biweekly by the American Public Gas Association Copyright 2008 American Public Gas Association All rights reserved. This is intended for actual subscriber use only. You may not forward, distribute, copy or republish this newsletter in any manner without the express written consent of the American Public Gas Association.

On October 16th, the Federal Energy Regulatory Commission (FERC) unanimously approved a draft final rule on Standards of Conduct for Transmission Providers. As stated by FERC, the final rule revises the FERC Standards of Conduct for natural gas and electric transmission providers by eliminating certain provisions of its Order No. 2004, which were difficult to enforce and apply. The rule is also intended to address concerns raised by the U.S. Court of Appeals for the District of Columbia Circuit, which in 2006 disapproved the expansion of the standards of conduct to include energy affiliates and vacated Order No. 2004 as it applied to the gas industry. Among other things, the final rule is intended to separately define the marketing functions for electric and gas companies and clarify that the term “transmission functions” refers to the day-to-day operation of the transmission system. In May, APGA filed comments in response to FERC’s proposal to revamp its rules intended to prevent an interstate pipeline from providing advantageous access to transportation to its affiliates. APGA’s comments focused on compliance. Specifically,

“APGA stated that there needs to be strong rules in place that discourage transmission providers from engaging in discriminatory acts” -APGA, response to FERC proposal, May 2008 APGA stated that there needs to be strong rules in place that discourage transmission providers from engaging in discriminatory acts. The comments further stated that the most effective form of consumer protection is having the tools in place to catch market abuses before they impact consumers. APGA staff and APGA’s General Counsel, Bud Miller, are in the process of reviewing the 300-page rule. A copy of FERC’s draft final rule is available on the FERC website at www.ferc.gov. A copy of APGA’s comments can be viewed at www.apga.org. If you have any questions on this article, please contact Dave Schryver of APGA’s staff by phone at 202-464-2742 or by email at dschryver@apga.org.

Government Releases LIHEAP Funds continued from page 1

America who often times have to make the difficult decision between paying their energy bills versus paying for other necessities like medication or childcare. The Energy Bill of 2005 raised the amount of funding authorized for LIHEAP to $5.1 billion per fiscal year. This was the first time Congress has provided this record level of funding for LIHEAP. The law stipulates that roughly $4.51 billion of the funding will be allocated under the regular block grant and about

$590 million be provided in emergency contingency funds to be released at the discretion of the President. States receive the funds based on a formula allocation that is weighted towards states relative cold-weather conditions and households living in poverty. Each state then uses its own formula for distributing its share of the federal funds to its citizens. If you have any questions about the LIHEAP program please contact Nate Hill by phone at 202-464-2742 or by email at nhill@apga.org.


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www.apga.org

October 27, 2008

Key House Committee Chairmen Release Draft Climate Change Legislation

On October 7, 2008, Energy and Commerce Chairman John Dingell of Michigan and Energy and Air Quality Subcommittee Chairman Rick Boucher of Virginia, released draft legislation that called for the creation of a capand-trade system that would cover about 88 percent of U.S. greenhouse gas emissions. The 461-page bill would reduce covered emissions six percent below 2005 levels by 2020, 44 percent below 2005 levels by 2030, and 80 percent below 2005 levels by 2050. While only a draft, this release can be viewed as a signal that both members are planning to continue to address climate change in the next Congress. The committee has asked for further input on this legislative draft from affected industries in order to continue refining the text into next year. APGA will continue to meet with committee staff drafting the legislation to stress APGA’s positions that: 1) Federal policies that increase demand should be balanced by policies that produce equal amounts of supply and discourage “fuel switching”;

2) Natural gas should be considered a part of the solution to climate change and excluded from the cap, and; 3) Any greenhouse gas reduction program that includes emissions from natural gas should be regulated “upstream.” This discussion draft is the result of 27 hearings on climate change in the committee, numerous white papers and solicitations for input from various interest groups. APGA has been active in meeting with committee staff and responding to their solicitations for input on this subject. APGA will continue to provide input to the committee as they refine this draft legislation. The draft bill would place restrictions on emissions from electric utilities, petroleum producers and importers, large industrial plants, producers and importers of bulk gases, natural gas and local distribution companies and geologic sequestration sites. However, the bill seeks to deal separately with smaller industries that release less than 25,000 tons of greenhouse gases per year which equates to a natural gas system that distributes ap-

proximately 460 mmcf of natural gas per year. The Dingell-Boucher plan would give the U.S. Environmental Protection Agency (EPA) authority to come up with a separate method of addressing emissions from smaller industries. The draft does not settle on one policy approach to containing the expected cost increases of implementing a climate change program. Instead, the bill lays out a number of options for distributing emission credits and containing costs to the U.S. economy including allowing the banking and borrowing of allowances by emitters, a “strategic reserve” of allowances that the EPA could auction or release into the market, and other proposals. If you have any questions regarding climate change legislation please feel free to contact Nate Hill by phone at 202-464-2742 or by email at nill@ apga.org.

Vent-Free Home Appliances Are Safe

In late September, the International Code Council (ICC) turned back an attempt to prohibit the installation and use of vent-free home appliances at its Annual Conference in Minneapolis. This victory was a collaborative effort between gas utilities and the VentFree Gas Products Alliance (VFGPA). The battle began earlier in the International Fuel Gas Code Committee (IFGC), where Mike Deegan of Clearwater Gas joined in a unanimous vote to reject the proposal to ban unvented appliances. Normally, this would have put an end to the matter. However, ban proponents took advantage of a process that keeps the issue alive by

filing public comments on the Committee’s actions. This ensured the banned proposal would be reconsidered at the ICC Annual Conference. Ban proponents orchestrated an aggressive campaign at the September 23 ICC meeting. But the earlier IFGC action and prior industry and VFGPA testimony carried the day. This ICC determination reconfirms the safety of already installed and to be installed vent-free home appliances such as room and space heaters, logs, fireplaces and fireplace inserts. Below is the October 15, 2008, Air Conditioning, Heating, and Refrigeration Institute press release announc-

ing the ICC determination. To view the press release please go to the following link http://www.apga. org/singlenews.asp?item_ID=4622. If you have any questions regarding this article please contact Bob Beauregard by phone at 202-4642742 or by email at bbeauregard@ apga.org.


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www.apga.org

October 27, 2008

APGA Urges PHMSA to Limit Control Room Management Rule To Pipeline Controllers In written comments submitted October 15th to the Pipeline and Hazardous Materials Safety Administration (PHMSA), APGA urged PHMSA to limit its proposed rule on control room management to individuals whose primary responsibility is to monitor and control transmission and hazardous liquid pipelines. As proposed, the rule would cover anyone who monitors any part of the pipeline, even occasionally, and impose the same requirements as applied to interstate pipeline controllers. A survey of APGA members found that nine percent of public gas employees would fall under the rule as proposed, and over 20 percent of employees at smaller systems would be considered controllers. Once deemed to have “controllers,” a utility would have to develop a written plan outlining

the “controllers” responsibilities, implement a fatigue management plan, conduct simulator or table top training exercises, and consult with the “controllers” before any piping changes. The only accommodation PHMSA offered for distribution operators was an extra 12 months to comply. APGA provided real-life examples of public gas employees that would be considered controllers under the rule: •A gas and water utility has gate station pressure displayed in the city water utility’s control center so that, after hours, the water system controller can call the gas superintendent if the pressure drops below a certain level. •A system has a pressure sensor at a gate station that pages the gas superintendent if pressures drop

below a low limit. •A system supervisor can remotely read the flow rate and pressure at its gate station via dial up modem. •Many utilities’ supervisors can log onto their pipeline supplier’s website and monitor the flow rate at the gate station. APGA urged PHMSA to withdraw its proposed rule and propose a significantly different rule that is limited to and reasonable for true pipeline controllers. A copy of APGA’s comments can be downloaded at www.apga.org. For further information please contact John Erickson, APGA Vice President, Operations at 202-464-0834 or jerickson@apga.org.

PHMSA Briefs APGA Members on Integrity Management During an October 16th APGA Operations and Safety Committee teleconference; Mike Israni of the Pipeline and Hazardous Materials Safety Administration (PHMSA) briefed APGA members on the recently proposed Distribution Integrity Management Programs (DIMP) rule. He focused on the areas where PHMSA proposed to go beyond the recommendations of its industry/government/public working groups, such as enhanced damage prevention, plastic pipe failure reporting and “Prevention through People.” APGA’s John Erickson followed with a briefing on APGA’s position on the proposed rule and highlighted

contentious areas where he believed coordinated written comments could convince PHMSA to modify the rule. He urged members to file comments supporting APGA’s written comments. APGA has provided a template for members who wish to comment. Comments are due October 23 but PHMSA will consider late filed comments. A final rule is expected in mid-2009, meaning utilities would have until near the end of 2010 to develop and implement written integrity management plans. APGA’s Security and Integrity Foundation (SIF) is developing a webbased program to assist utilities to write these plans. The first demonstra-

tion of this program will be conducted on November 12th at the Gas Utility Management Conference in Wichita, KS. Slides from the two presentations, APGA’s written comments, the template for comments and an audio copy of the one-hour teleconference can be found on www.apga.org under “Top Five Downloads” in the members-only section of the website. For further information please contact John Erickson, APGA Vice President, Operations by phone at 202464-0834 or by email at jerickson@ apga.org.

THE SOURCE NEEDS YOU! The editorial committee, led by Don Suarez and its members, Shannon Gooden, Rodney Dill, Rich Worsinger, Jim Collins and Jimmy Sprouse are getting ready to brainstorm ideas for the next issue of THE SOURCE. This issue is set to hit the streets at the end of February 2009 and we are looking to generate new story ideas. Tell us about the current issues you think are affecting your system and or the natural gas industry. If you would like to share your idea with the committee, please email Kristin Gomez at kgomez@apga.org.


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www.apga.org

October 27, 2008

Lands’ End Promotion for APGA Members NOW THROUGH 10/31/08

Buy five or more ThermaCheck® 100 Pullovers and the price drops to just $20! Give us a call at 1-800-419-1097 to receive the discount. We can help you with your logo application too! Regular orders can be made online at ces.landsend.com/APGA (case sensitive - no need to add www). Your 10% discount will be applied at checkout. Or call us at 800-419-1097.

Market Development Conference Program…A Winner! The 2009 Market Development Conference (MDC) is scheduled for March 23-25, 2009, in Atlanta, Georgia. APGA, co-sponsoring state associations and joint action agencies will host the conference. Current cosponsors are:

ANGA FNGA, FMNGA and FGU MGAG Patriots Energy Group Tennessee Gas Association Texas Gas Association

This conference will deliver value for the whole range of system mangers from GMs, to those whose focus are operations, new commercial or residential market development, customer service for key accounts, customer retention, or advertising. Opening day is devoted to natural gas prices and the exciting natural gas vehicle and fueling markets. Aubrey Hilliard, a respected marketer from Texican Horizon Energy Marketing, will explain current natural gas prices and forecast future prices. Also, representatives of Honda, Clean Energy and NGVAmerica will lead an interac-

tive all-attendee roundtable discussion on NGVs and fueling markets. Day two will focus on serving key accounts, increasing natural gas supply, the industry-wide national advertising program led by the Council for Responsible Energy (CRE), and presentations of highly regarded marketing campaigns by the winner and two finalists in the 2008 APGA M&S Award competition. The day is capped off with a two-hour natural gas cooking show by nationally acclaimed Chef Clayton Sherrod of Birmingham. Closing day has three back-to-back facilitated roundtable discussions. The subject areas are growing your commercial markets, customer retention/getting unused services back into service and a brainstorming session to generate exciting ideas for marketing campaigns, including a discussion on how utilities without a marketing department can effectively use existing staff to market gas. To view the conference brochure: http://www.apga.org/MDC/Brochure/ mdc_Full_agenda.pdf

To register early and lock-in those dates of March 23-25, 2009: http://www.apga.org/MDC/Brochure/ MDC_Registration.pdf *The fee is reasonable and may be lower for multiple system attendees. The Hilton Atlanta Airport is also just five-minutes from the airport via a free shuttle.

Exhibitor Opportunities

To register for exhibitor opportunities at the MDC please fill out the form at: http://www.apga.org/MDC/ Brochure/mdc_exhibitorform.pdf There are five Platinum Sponsor opportunities. Each Platinum Sponsor gets a free registration and 20-minutes on the MDC agenda to talk about the value of their product or service. There are ten Gold Sponsor slots. Each Gold Sponsor gets a free MDC registration. For further information on the 2009 MDC, please contact Bob Beauregard by phone at 202-464-0831 or by email at bbeauregard@apga.org.


www.apga.org

October 27, 2008

Complimentary 2009 APGA Calendars Sent Out

cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------cut and fax-----------

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In a few days, public gas systems that did not purchase the 2009 APGA Calendars for their customers will receive a complimentary calendar and a short yes-or-no survey to complete. We hope that those who receive the calendar will take the time to complete the survey and return it to APGA. To get a head start, we have included the survey here. Please wait until you receive the calendar to complete and fax in the survey to APGA. If you have any questions or would like to purchase additional calendars please contact Bob Beauregard by phone at 202-464-0831 or by email at bbeauregard@apga.org. ----------------------------------------------------------

APGA 2009 Calendar Survey

System Name:___________________________________________________________________________________ Main Contact:____________________________________________________________________________________ APGA would like your feedback on the 2009 Calendar you have received in the mail. While your system did not order the calendar, I ask you to take just a minute to answer a few questions. Your input will help APGA increase the value of future calendars and, in turn, hopefully encourage your purchase of the APGA 2010 calendar for your customers. Please fax this sheet with your answers to David Naples at 202-464-0246. Do you or have you distributed any kind of calendar to your customers? Yes Did you know there was a calendar devoted to natural gas? Is this a good idea? Yes

Yes

No

No

No

Did you know there was a calendar that provides partial compliance with RP 1162 Public Awareness requirements? Yes No Is this a good idea? Yes

No

Did you know there was a calendar that promotes the use of natural gas by spotlighting residential natural gas appliances? Yes No Is this a good idea? Yes

No

Do you like the size of the 2009 calendar? Yes

No

The 2009 calendar was priced based on quantity ordered. The prices included shipping to the ordering system. 250-999 $1.99/calendar 1000-4999 $1.93/calendar 5000-9999 $1.83/calendar 10,000 & over Special Pricing In your view, are these prices fair? Yes No Would your system consider ordering 2010 APGA Calendars?

Yes

No

If no why not?_________________________________________________________________________________ _____________________________________________________________________________________________ _____________________________________________________________________________________________


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www.apga.org

October 27, 2008

How Americans Are Cutting Back Take a look at this Porter Novelli ConsumerStyles Snapshot to see what and who are impacted most in these challenging economic times. While we are all tightening our belts, APGA members can be part of the solution…natural gas is both cost and energy efficient compared to alternative energy sources. This is a great story for you to share with your current and potential customers.

snapshot

Americans Cut Back OCTOBER 2008

THE DATA: that You may not be surprised to hear consumers are reigning in their spending, from eating out less to cutting back on entertainment. But s they’re also less likely to buy thing s on impulse, as more wait for sale and regularly compare prices. Consumers are learning to shop smarter and are increasingly e consuming products in a deliberat and thoughtful way, spending and learning to live with less.

Table 1.

HOW AMERICANS ARE CUTTING BACK ACCORDING to the results from Porter Novelli Styles 2008, more than 7 out of 10 Americans (72%) say they have cut back their spending in at least two of seven areas in the past six months, and only one in five (18%) say they have not cut back at all (see Table 1). Given the spikes in fuel prices earlier this year, it is not surprising to find that 46% of Americans have cut back their driving to save money at the pump. However, as restaurants and retailers know too well, many are also cutting expenses by eating out less and spending less on clothes and shoes. As might be expected, the biggest cutbacks are being made by younger consumers – 18-29 year olds – and those making less than $50,000 per year. At the same time, impulse buying is down since just two years ago – this year, about two in five (42%) agree that when shopping, they often buy things they hadn’t planned on buying, down from 54% who said the same in 2006. More agree that they wait for products to go on sale since 2004 as well – from 51% in 2006 to 58% now in 2008.

How Consumers Are Cutting Back

In the past 6 months, have you cut back in the following areas….? ALL ADULTS

MALE

FEMALE

18-29

30-49

50+

LESS THAN $50K

$50 $100K

$100K+

Eating out

55%

54%

57%

62%

60%

48%

60%

53%

45%

Clothes/shoes

51%

44%

58%

60%

54%

45%

57%

48%

41%

Driving/gasoline

46%

48%

45%

44%

44%

49%

50%

43%

39%

Entertainment

44%

43%

45%

52%

48%

37%

48%

43%

36%

Travel/vacations

40%

41%

38%

41%

41%

38%

42%

40%

31%

Food/groceries

31%

27%

33%

33%

31%

29%

37%

26%

20%

Technology

25%

27%

24%

32%

28%

20%

28%

24%

19%

None of these

18%

19%

16%

13%

15%

22%

13%

19%

29%

So are consumers learning to shop smarter? As in years before, more than three in four say they compare prices at the store shelves when they shop (76%), and just under half say they almost always use coupons at the grocery store. But slightly more now agree that they compare prices at two or more stores before making most purchases than did just two years ago. If the economy continues to weaken into 2009, future Styles surveys will continue to gauge how consumers’ mindsets and behaviors are impacted. Porter Novelli Styles is a suite of annual surveys conducted among a variety of audiences. The base survey, ConsumerStyles, was conducted May through June 2008 among a total of 10,108 consumers. The data are weighted to ensure a nationally representative sample. The margin of error is +/- 1% for the total sample, and larger for subgroups. To find out more about this topic or for additional Styles information, contact Adam Burns at adam.burns@porternovelli.com.

AGREEMENT WITH STATEMENT When I shop, I often buy things I hadn’t planned on buying

2008

2006

42%

54%

I wait for products to go on sale before I buy them

58%

51%

I often compare prices at the store shelves when deciding what to buy

76%

NA

I almost always use coupons at the grocery store

47%

46%

I compare prices at two or more stores before making most purchases

41%

38%


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www.apga.org

October 27, 2008

Member ProďŹ le: Elk River Public Utility District

Elk River Public Utility District, TN

The Elk River Public Utility District (ERPUD) was created in 1955 by the State of Tennessee to provide natural gas to the franchised areas of Coffee and Franklin Counties. The District serves approximately 15,000 residential, commercial and industrial customers with annual sales of 2,600,000 Dth. ERPUD maintains over 700 miles of distribution system which continues to expand each year. Our goal is to provide safe, efficient, economical natural gas energy and related services to the people within our service area. Our main office (see photo) located in Tullahoma, Tennessee has a large warehouse and operations facilities directly behind it, that houses our inventory,

customer service activities, accounting, billing, dispatching, engineering, installation, computer mapping, meter and regulator departments, marketing, safety and training facilities and much more. We also have two conveniently located offices in Manchester and Winchester which provide a full range of services for our customers. All of our offices have appliance displays and drive through access. Our management team is responsible for operating the District according to the direction of the Board of Commissioners. The District has approximately 60 experienced and well-trained employees PRESORTED STANDARD who are dedicated to providing the very U.S. POSTAGE best PAIDcustomer service. Our employees FAIRFAX, are theVA key to our success and are our Permit No. 6241 most valuable resource. Experienced, well-trained technicians are strategically located throughout our service area to respond to any emergency within minutes. Safety is the top priority at ERPUD and our dispatchers are on duty 24 hours a day, 7 days a week to assist

AMERICAN PUBLIC GAS ASSOCIATION

201 Massachusetts Ave NE Suite C-4 Washington, DC 20002

Phone: 800.927.4204 Fax: 202.464.0246 Web: www.apga.org

our customers. Besides offering excellent customer service, ERPUD provides sales, service and installation of many types of natural gas equipment, free estimates, safety inspections and line locations. We also offer appliance rebates, bank drafts, equal payment plan, project HELP, budget billing, and we accept credit card payments. Lastly, ERPUD has played an important role in pushing for and supporting a national advertising program for natural gas that now has life under the Council for Responsible Energy (CRE). In addition to our logo, we now proudly display the CRE logo here and, in the not too distant future, on our company vehicles and correspondence. To find out more about our system please visit our website at www.erpud. com. com

PRESORTED FIRST-CLASS U.S. POSTAGE PAID FAIRFAX, VA Permit No. 6241

Public Gas News  

October 27, 2008

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