News Column

Xcel to increase safety-related investments in its natural gas system

August 7, 2014

By David Shaffer, Star Tribune (Minneapolis)



Aug. 07--Xcel Energy Inc. says it plans to significantly increase safety-related investments in its Minnesota natural gas service region.

The utility said in a recent regulatory filing that it intends to spend $15 million in 2015 on pipeline safety improvements, about a twofold increase over past levels. In future years, the company envisions even larger safety-related investments, peaking in 2019 at more than $50 million.

If the state Public Utilities Commission approves the 2015 investment, it would increase customers' bills 3.5 percent in January, about $2 per month for a typical customer, the company said. Future investments could bring more increases, though they would need separate regulatory approval.

"We are doing this work to keep everybody safe," Cheryl Campbell, Xcel vice president for gas engineering and operations, said in an interview Wednesday.

The work includes replacing 111/2 miles of transmission pipeline in Roseville and St. Paul, modifying other transmission lines so that traveling "smart tools" can patrol inside for defects and replacing uncoated steel and early plastic polymer pipes that are not holding up well, she said.

Xcel also is planning to install more valves that could be remotely activated when gas lines are ruptured during construction work, a common cause of accidents, she said. The company also will check older mains, and replace ones that don't meet pressure standards, she said.

Minneapolis-based Xcel, the state's second-largest natural gas company, serves 441,000 customers in St. Paul, metro suburbs, St. Cloud and more than 200 other communities, as well as Fargo, N.D.

Regulations, an accident

The investment is driven mainly by federal rules mandating systematic efforts to spot problems with pipelines and partly as a response to a February 2010 natural gas accident that destroyed a house in St. Paul, company officials said.

Across the nation, natural gas utilities are making similar investments in response to federal regulations imposed in the past decade. The American Gas Association says the industry spends $19 billion a year on system improvements, much of it tied to such pipeline-integrity rules.

CenterPoint Energy, the state's largest natural gas utility serving 823,000 customers in Minneapolis and 260 other communities, has more than doubled its system-improvement investment to $150 million annually under a plan approved in the utility's most recent rate case, said spokeswoman Rebecca Virden.

Xcel isn't seeking to increase rates, but the effect is the same. The tab for the safety investments, if approved, would be added to a new line item on customers' bills. The state Legislature authorized that procedure in 2013, and Xcel is the first utility to seek approval for it.

Campbell said much of the work on Xcel's system will be in St. Paul and communities in the metro area.

One problem Xcel says it intends to address came to light in 2010 when a Highland Park homeowner hired someone to auger out her sewer line. The auger struck a gas line that had penetrated the sewer pipe. The gas ignited, burning the sewer worker and incinerating the home.

Xcel paid a $20,000 fine, privately settled two lawsuits and expanded a program to identify other "sewer and gas line conflicts."

These penetrations can occur when directional drilling equipment, instead of a trench digger, is used to install new pipelines. Campbell said that locations of old, clay sewer pipes often are not mapped, and boring equipment can go right through them.

Xcel said it has identified 138 sewer lines in St. Paul and other communities with such penetrations, and is fixing them. New boring procedures require workers to take steps so that penetrations don't happen.

Xcel officials said they haven't estimated what effect future planned investments could have on customers' bills.

"These are investments we need to make," said Laura McCarten, a regional vice president for Xcel. "This investment is happening at a time when natural gas prices are historically low. "

David Shaffer -- 612-673-7090 Twitter: @ShafferStrib

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(c)2014 the Star Tribune (Minneapolis)

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Source: Star Tribune (Minneapolis, MN)


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