DALLAS — Texas is considering a $1 billion project to replace all steel residential gas pipes with plastic ones after a series of explosions that resulted in four fatalities.
The project has not yet been mandated, but is under consideration at the Texas Railroad Commission, which regulates oil and natural gas in the state.
If the replacement is ordered, financing could come from debt issued on behalf of public utilities, officials indicated.
CPS Energy, which is owned by San Antonio and is the nation’s largest public utility, estimates that it could need up to $125 million to cover the initial costs of the project. Ultimately, ratepayers would repay the cost of replacing the pipe.
CPS already has a program to replace lines that are showing wear, but under the Railroad Commission proposal, the utility would need to take immediate action across its system, creating a large, up-front cost. Statewide, replacing thousands of miles of steel gas lines could take up to 10 years, officials estimated.
CPS vice president Jeffrey Tuttle said he’s hopeful CPS might gain an exemption because 60% of its steel pipe has been replaced and the rest is being replaced gradually, though he said it’s in good shape.
While some Texas towns and cities own their electric power providers, public gas utilities are fairly uncommon. City-owned Austin Energy, for example, does not provide gas service, which comes from investor-owned Texas Gas Service Co. CPS does provide both electric and gas service to residents of the San Antonio area.
While investor-owned utilities would front the cost of replacing gas lines, cities and counties could be required to finance the cost of restoring streets and sidewalks where the excavation work would be done. State officials say the ultimate financial burden for that kind of work remains to be negotiated.
Michael Williams, one of three railroad commissioners, submitted his plan to require the pipe replacement at a meeting Monday, but commissioners deferred a vote until August. If approved, the plan could go into effect in January.
Williams’ proposal calls for replacement of gas lines within two years in areas where leaks are found in 25% or more of the houses and buildings. Utilities would replace 10% of the steel lines every year in areas where less leaking was detected.
Homes built in the 1960s to 1980s used steel pipe for their gas lines. Over time, the pipe is subject to corrosion and leakage, especially at connection points.
In 2006, a couple in the North Texas town of Wylie died when a natural gas leak destroyed their home. Another explosion in Cleburne killed two women and injured three other family members. Last year, another house in Mesquite exploded. All of the explosions occurred in the Dallas-Fort Worth area, which Williams represents.
The area’s gas utility is investor-owned Atmos Energy, the largest gas provider in Texas. After the Mesquite explosion, the Railroad Commission ordered Atmos to stop using steel piping and couplings. Atmos has begun replacing pipes in areas identified as vulnerable to leaks.
