State lawmakers have repeatedly rejected measures to allow utilities to charge a special fee to pay for pipeline replacement. As a result, companies such as UGI Corp. have pursued their own plans to replace old pipe over a span of decades.
"In the case of Pennsylvania, there is a real question about the safety of gas lines mainly because there are a lot of very old, cast-iron and bare steel pipe in the ground," said Rick Kessler, vice president of Pipeline Safety Trust, a Bellingham, Wash.-based advocacy group. "Some utilities around the country have moved aggressively on replacing these types of older pipe, but in some areas, utilities are only replacing a very small percentage of these pipes each year."
Some gas utilities in the commonwealth have among the highest percentages of cast-iron pipe in the country, according to The (Allentown) Morning Call, which cited federal records saying that among 148 gas companies across the country with at least 1,000 miles of pipeline, two of UGI's three divisions are in the top 20 percent for cast-iron pipe. Lehigh Valley's UGI Utilities was 26th on the list with 400 miles (7.5 percent) of its pipelines in cast-iron and PGW in Philadelphia topped the list with more than half of its pipelines in cast-iron, the paper said.
UGI has replaced 300 miles of lines since 1970, and an official said earlier this month that, at its current pace, the utility would need four decades to replace the old pipes, some of which are a century old. The company has not sought a rate increase since 1995 and is paying for pipe replacement by adding customers and being selective in targeting replacements.
"One of the reasons that UGI has been able to stay out of rate case proceedings since (1995) is that we have been good at being efficient and effective operators," said Robert Beard, the company's vice president of marketing, rates and gas. "Part of being good is identifying those pipe segments that are most in need of replacement and to not replace pipe segments that should not be replaced."
Tests are still being done on the cracked pipe dug up after the Feb. 9 explosion and fire that rocked an Allentown neighborhood and killed five people, including an elderly couple and a 4-month-old boy.
The American Gas Association says 19 states allow utilities to charge fees or surcharges to pay for infrastructure improvements, some including a cap on how much utilities can recover and others allowing the fees to be used toward the cost of installing new pipeline.
Four major utilities in Ohio recently worked out plans to assess extra charges for pipeline replacement, said Matt Butler of the Ohio Public Utilities Commission.
In Georgia, the process was hastened in the late 1990s after gas from leaking pipelines seeped up in front of the state Public Service Commission offices in Atlanta. The state's main gas utility, Atlanta Gas Light, was slowly replacing old cast-iron and bare steel pipeline with plastic and steel pipe, but the utility in 1997 ordered 2,300 miles of old pipeline replaced in 10 years, allowing a surcharge that is now up to $1.95 a month for residential customers.
Regulators later pushed back the deadline for completion to 2013 while adding more pipeline replaced. By the deadline, Atlanta Gas Light will have replaced an average of 180 miles a year for 15 years, officials said.
In Pennsylvania, state Rep. Robert W. Godshall, R-Montgomery, has proposed a surcharge to natural gas customers and said he is optimistic about chances for passage, especially with the memory fresh about deadly explosions in Allentown and in Philadelphia, where a PGW worker was killed in January.
Godshall said he is working to broaden the legislation to help sewer and electric companies replace older infrastructure too. The state Public Utility Commission also faces a distribution charge, saying it would allow safety upgrades without a lengthy rate approval.
Opponents, however, have blocked such proposals in the past, and they include Pennsylvania Consumer Advocate Sonny Popowski and state Rep. Phyllis Mundy, D-Luzerne, who said companies should make their case for a rate hike if they want more money for infrastructure.
"What the gas companies want is an automatic rate increase" without having to make the financial case for it, Mundy said.
