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WV lawmakers look at increasing penalties on pipeline safety violations

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The Dec. 11 pipeline explosion near Sissonville in Kanawha County has led to a bill that could increase the maximum fine for safety violations.

Speaker Rick Thompson, D-Wayne, introduced House Bill 2505 at the request of Gov. Earl Ray Tomblin. The bill passed out of the House Judiciary Committee Feb. 22. If passed by the Legislature, the bill would increase the maximum fine per penalty from $1,000 to $200,000. Fines would not exceed $2 million for any related series of violations. The fine would apply to pipeline facilities, new or existing pipe, pipe right-of-ways or any facilities used to transport liquid gas.

Several members of the committee questioned what the increased penalties would mean for consumers. But Ryan Palmer with the West Virginia Public Service Commission said past practices show rate payers have nothing to worry about.

"I don't know every single word in code that pertains to the Public Service Commission," he told the committee. "I'm not aware of something prohibiting that, but the commission has not allowed that in the past."

Delegate John Shott, R-Mercer, offered an amendment that would clarify language in the bill and "codify the policy that stockholders of a utility will pay for any neglect rather than rate payers," according to committee counsel.

The amendment passed unanimously.

Palmer said the PSC has jurisdiction over non-rural gathering lines, and state regulations mirror federal regulations. About 10 percent of gathering lines lying underneath the state's surface fall under PSC jurisdiction. The other 90 percent are in rural areas, including newer, bigger lines in the Marcellus Shale region.

"The vast majority of gathering lines are not under our jurisdiction for safety inspections," he said.

Delegate Woody Ireland, R-Ritchie, asked who regulates lines that do not fall under PSC jurisdiction. Bob Orndorff of Dominion Transmission said that while non-jurisdictional lines are not regulated by the PSC, they do have an obligation to correct any issues.

"In the state of West Virginia, the PSC does have the ability to regulate all pipelines," Orndorff said. "Within the state, there are jurisdictional lines. Those are lines the Federal (Energy) Regulatory Commission or PSC sets rates for and regulates them. Non-jurisdictional lines are not regulated. But you as an individual landowner, if you complain to the PSC … they will come out … and make sure the problem is corrected."

Orndorff said pipelines are subject to integrity management programs, which include very specific criteria set by the federal government. The federal government allows utilities to regulate themselves as long as those regulations fall within the criteria set by the federal government.

"Pipeline (companies) have a wide variety of options to inspect their pipelines," he said. "It's incumbent on us to operate our pipelines."

 House Bill 2505 will be reported to the floor of the House of Delegates as amended.