ANALYSIS OF SDG&E S PROPOSAL TO DE-RATE LINE 1600 AND CONSTRUCT LINE 3602

Transcription

1 ANALYSIS OF SDG&E S PROPOSAL TO DE-RATE LINE 00 AND CONSTRUCT LINE 0 Prepared testimony of Margaret C Felts M.C. Felts Co. Elk Grove California, USA on behalf of Utility Consumers Action Network California Public Utilities Commission Application -0-0 April, 0

2 A.-0-0 Table of Contents Page I. Introduction II. Prudent management of gas supply for safe operations demands the ability to re-route the supply of gas without delay during daily operations to meet peak demand, during emergencies and for routine maintenance.... III. Prudent engineering requires good long term planning to insure pipeline safety and a reliable supply for operations.... IV. Line 00 should be taken out of service because SDG&E/SCG cannot prove that it is safe to operate, even at 0 MAOP.. V. Taking Line 00 out of service requires additional new infrastructure.. VI. It is not reasonable to rely on Line 00 to supply the entire San Diego region... VII. Installing Line 0 is a prudent solution to maintain a safe pipeline system to deliver a reliable supply of gas to the San Diego region... VIII. Conclusion..

3 A I. Introduction The purpose of my testimony on behalf of UCAN is to provide my analysis of San Diego Gas and Electric/SoCalGas (SDG&E/SCG ) proposals to de-rate Line 00 to distribution service and to replace it with a new inch diameter transmission Line 0. Initially, UCAN and I were very skeptical of SDG&E/SCG's proposal, especially given the cost to the ratepayers. However, after an examination of SDG&E/SCG's evidence, a review of all the data responses to the intervenors, the Office of Ratepayer Advocates (ORA) and the Commission's Safety and Enforcement Division (SED), Energy Division (ED) questions, as well as independent research, we became convinced that SDG&E/SCG's proposal deserves support. We arrived at this conclusion in light of Line 00 safety issues and the resiliency and reliability issues associated with having only Line 00 to serve the region should Line 00 be de-rated or taken out of service. Based on technical information provided by SDG&E/SCG, I conclude that Line 00 should be removed from service as soon as practicable and find the proposal to construct Line 0 to be a reasonable and prudent engineering solution for the San Diego region. My testimony will set out the basic engineering principles and technical information I used to arrive at these conclusions. 0 II. Prudent management of gas supply for safe operations demands the ability to re-route the supply of gas without delay during daily operations to meet peak demand during emergencies and for routine maintenance. In the oil & gas industry, products are moved through ships, barges, trucks and rail cars, storage tanks and pipelines. There is hour, days per week, vigilance and operators are constantly balancing volume, flow and pressure in the pipelines as products are moved from fixed volume vessels (batches) to constantly flowing pipelines. It is not an easy task to balance inventory levels, pipeline flows, and pressures, while industrial, commercial, and consumer demands constantly fluctuate. In

4 A California, the ISO s constant shifting of demand for electricity from source to source, adds another layer of complexity for the gas provider because Electric Generator (EG) demand fluctuates from day to day, and even within hours. Sound engineering requires design for flexibility in gas pipeline operations -- at minimum to include loops or redundant lines so that adequate gas supplies are always readily available. There cannot be a delay in acquiring gas because a gas supply system cannot be allowed to drop below minimum operating pressures. To maintain gas pressure, it is necessary to match the flow of gas into the pipeline system to the outgoing gas demand by users. While curtailment of interruptible supplies helps slow demand to preserve pipeline gas pressure, SDG&E/SCG cannot curtail core consumer demand because it is not feasible to go out and close the valves to homes. In an extreme case when gas supply suddenly decreases, such as when a pipeline fails unexpectedly, a redundant supply that can be routed to core consumers immediately is essential. In that respect, the pipeline system currently supplying the San Diego region is defective because SDG&E/SCG currently lack the redundancy to maintain a sufficient supply at all times to the San Diego gas users. In the past, SCG&E/SCG/Sempra anticipated that LNG from Energia Costa Azul (ECA) and/or gas transported across northern Mexico to Otay Mesa might supplement the San Diego region. Due to changing dynamics of the supply and demand for gas in Mexico, and the current prices of LNG, neither of those options exists today as practical and affordable sources of gas. Those facilities are also in a foreign Prepared Direct Testimony of S. Ali Yari, February, 0, p. (Attachment D) A significant loss of pressure requires a massive effort to turn off every user valve, to purge systems for safety, followed by another massive effort to put gas back into the system, turn gas back on, light pilot lights and restart the system. This is an expensive and inherently unsafe operation and not one that should ever be considered a part of normal operations. Supplemental Testimony of SDG&E and SCG, February, 0, p. referencing D at, and Atch A, Gas Capacity Planning and Demand Forecast Semi-Annual Report, October, 0 p. Current Status, Plans, and Constraints Related to Expansion of Natural Gas-Fired Power Plants, Pipelines and Bulk Electric Transmission in the California/Mexico Border Region, California Energy Commission, August 00 CEC , pp. - (Attachment E) Direct Testimony of Paul Borkovich, February, 0, Sec. III (Attachment F) and Response to Energy Division DR (Response CEA-A.) (Attachment C) and Response to UCAN DR Q (Attachment B)

5 A country and fall outside of the Commission s regulatory authority, making reliance on them risky. III. Prudent engineering requires good long term planning to insure pipeline safety and a reliable supply for operations. There are two basic engineering principles taught in engineering schools and industry that apply to the current situation. First, design for 0 years. Second, past performance cannot be used to predict future performance. The planning horizon for pipeline replacement is typically 0 years. In engineering, the typical design horizon for pipeline infrastructure is 0 years, therefore a reasonable planning horizon for the Line 0 project, including the forecast for natural gas supply and demand, should be at least 0 years. One only has to look at histories within pipeline companies to see this principle at work. In fact, the idea of building Line 0 is not one that evolved from the Pipeline Safety Enhancement Plan (PSEP) proceedings. In, SDG&E had already planned Line 0 construction. Line 00 would have been years old in. If it took years to complete the project, Line 0 would have been installed when Line 00 was 0 years old. While the routes contemplated were slightly different than the current proposed route, the point is that engineers at SDG&E and SCG were planning ahead to provide new pipeline capacity. That project was ultimately shelved, except for the small section along Pomerado Road in Poway. 0 Citing to SDG&E s long-term gas resource plan, SDG&E/SCG say that the new pipeline was planned to meet increasing Response to TURN DR Q, Note that the SDG&E Transmission pipeline book life (used for depreciation calculations) is years. While this is an accounting parameter, it is also suggests the anticipated life of the facility. (Attachment C) R.-0-0, February 0 Prepared Direct Testimony of Neil Navin, March, 0, p. (Attachment G) Response to UCAN DR Q and UCAN DR Q (Attachment B) 0 Prepared Direct Testimony of N. Navin, March, 0, p. (Attachment G)

6 A gas demand, and to interconnect to the existing Line0 crosstie in Escondido, which would improve system reliability and increase flow. In 00 SDG&E/SCG were still planning to install a transmission line (Line 0) with year completion. Project # (0 0 MMcfd option) described in Table - is the most likely project to be constructed on the SDG&E system to meet increasing demand. The total length of this pipeline would be miles, extending to the existing -inch Pipeline 000 in Santee. Essentially, this pipeline would complete a loop between the Rainbow Compressor station and the southern extreme of the SDG&E service territory. SDG&E personnel confirmed this project is ideal to significantly improve system reliability, especially in time of emergencies or when other transmission lines are in need of maintenance. The lead-time for this project is estimated at three to four years, with the southern portion being the most problematic since it goes through federal government property and various sensitive environmental zones.... By 00 this project would have been completed and Line 00 would have been years old and Line 00 would have been years old. While the short project descriptions do not state the planned replacement of Line 00, given gas demand forecasts at the time, installation of a transmission line would have allowed the de-rating of Line 00 to a distribution line, or to be taken out of service, if necessary. In the current Application, SDG&E/SCG now propose to install Line 0 with year completion. By the time Line 0 is completed in 0, Line 00 will be years old and Line 00 will be years old, well beyond the design lives of both lines. As 0 approaches, ensuring the integrity of Line 00 will require increased vigilance, inspections, maintenance and repairs. Fortunately, Line 0 ( ) planned capacity will provide complete redundancy in times when Line 00 will be shut down. Response to UCAN DR Q (Attachment B) San Diego Regional Energy Infrastructure Study, SAIC, December 0, 00, p. - (Attachment H) Prepared Direct Testimony of N. Navin, March, 0, p. (Attachment G)

7 A.-0-0 As another example of long term planning in the industry, in PG&E initiated a 0 year forward-looking plan called the Gas Pipeline Replacement Plan, stating 0 0 The steel transmission lines proposed for replacement are to years old and were originally installed in open spaces, often in narrow rights-of-way in areas which have since been highly developed. Many of these pipelines are now in confined areas with reduced ground cover. They need to be replaced with modern pipe to enable PG&E to continue to provide safe and reliable service. In addition, the three pipelines supplying San Francisco from Milpitas were built between and. They will be replaced... Line, constructed in, was one of those three pipelines to be replaced. Ultimately, PG&E did not replace L as planned and it subsequently failed catastrophically in San Bruno on September, 00. The NTSB reported that the Line weld failed catastrophically at psig, below the MAOP of 00 psig. Past performance cannot be used to predict future performance. There may be a tendency to assume that since a pipeline has not leaked or failed in the past, it will not do so in the future. This logic is faulty, like assuming your shoes will last forever because they have served you well for the past years, or the roof on your house will last forever because it has not leaked for the past years, or Line would not explode because it had operated for years without incident. Prudent Engineers do not wait for a pipeline to fail to plan the replacement pipeline using the latest design information and technology. Pipelines, just like all infrastructure, are subject to damage over time for a number of reasons. A 0 year time frame for planning the replacement of pipelines necessarily assumes the pipeline will not fail by the time it is replaced at 0 years, therefore one would assume that it has not suffered too many, if any, problems Revised Report and Testimony of Margaret Felts, I.-0-0, March, 0, p. (Attachment I) NTSB Accident Report, August 0, 0, titled PG&E Natural Gas transmission Pipeline Rupture and Fire, San Bruno, CA, September, 00, pp. and (Attachment J) The northern stretch of Line, which passed through San Bruno was installed in. Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, p.0, Figure, Summary of Probability of Failure Scores.

8 A.-0-0 for those first 0 years. While there are engineering formulas used to calculate the remaining life of a pipeline, reliance on these predictions has yet to be proven as a safe planning tool for an entire pipeline system. As SDG&E/SCG witness Rosenfeld states, there is much that is unknowable about the line [00], including the ability of girth welds to withstand loadings from natural events, and features in the longitudinal seams. Risk is proportional to what is unknown, at least in part. Line 00 is a system that was built and buried underground in. Line 00 was built and buried just years later, in 0. There is much that is unknown about any pipeline that is buried underground and the longer they are in place and subject to unknown loadings, the higher the number of unknowns, along with risk. Therefore, past performance of Lines 00 and 00 cannot be used to predict the future performance of Lines 00 and 00. IV. Line 00 should be taken out of service because SDG&E/SCG cannot prove that it is safe to operate, even at 0 MAOP. The Post Assessment of Line 00 reveals the alarming unknown and unknowable condition of the line. SDG&E performed a series of pipeline examinations utilizing different detection technologies, including Direct Examination (DE) of pipeline pieces where an In-line Inspection (ILI) showed anomalies. 0 SDG&E reported anomalies in five categories: crack-like, deformation, longitudinal seam, manufacturing and metal loss (which overlaps some of the other categories). DE involves physically excavating down to the pipe to perform additional inspections from the outside of the Typically, remaining life calculations measure the impact of corrosion, i.e. how much metal thickness is left and how long it will survive before failure. Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, p. 0 Post Assessment Report for the 0-0 In-line Inspection of SDG&E Pipeline 00, Pipeline Integrity Transmission Integrity & Analysis, February, 0, p. (Attachment K) Ibid,

9 A.-0-0 pipe. In a instances, a section of pipe was removed for internal inspection and lab analyses. When SDG&E performed DE, it discovered numerous anomalies in longitudinal seams that had not been detected with the ILI equipment. SDG&E concludes that 0 [t]he discovery of undetected longitudinal seam anomalies during direct examinations suggests that additional flaws that are unknown to SDG&E may remain on Pipeline 00. During the investigation,, anomalies were detected using ILI. Of those, were selected for DE. Direct examination of the locations revealed longitudinal seam flaws that were not reported (not detected) by the ILI vendor as anomalies. The lengths and depths of the undetected flaws are reported on Table. These flaws Ibid, Ibid, Ibid,, note: Anomalies include Crack-like, fractures such as hook cracks, lack of fusion, cold welds; deformation, such as dents, buckles, ripple or wrinkle, metal loss or a stress riser; Longitudinal seam manufacturing anomaly such as lack of penetration, lack of fusion, and misalignment; manufacturing, such as metal loss, mid-wall, inclusion or lamination that cannot be sized; and metal loss, which is any pipe anomaly in which metal has been removed, usually corrosion, but gouging, manufacturing defects or mechanical damage can also cause metal loss. See descriptions on p. of the Post Assessment Report. (Attachment K) Ibid, Ibid, and Ibid, Table, p. -

10 A.-0-0 were found in EFW and ERW Long Seam types and were not insignificant given that most of them were repaired by pipe replacement or bands around the pipe. The remaining anomalies that were found during ILI were not inspected using DE. 0 If undetected flaws were detected in the locations sampled, then / yields an average of undetected flaws per anomaly location. By simple multiplication, that leaves potentially, undetected flaws, remaining in Line 00 in unknown locations. The total detected and undetected flaws in Line 00 Electric Resistance Weld (ERW) pipe materials and a similar material called electric-flash-welded (EFW) pipe first appeared in the 0s. Both processes involved making line pipe by cold forming previously hotrolled plates or strips into round cans and joining the longitudinal edges of the cans by a combination of localized electrical resistance heating and mechanical pressure. The heat-softened edges were forced together extruding excess material to the outside and inside of the newly formed pipe. The excess material was immediately trimmed away leaving smooth surfaces or at most a small protrusion along the bondline. Prior to, all ERW materials and EFW pipe were made by means of DC or low frequency AC current (up to 0 Hz) using low-carbon steels made in open hearth or electric arc furnaces and cast into ingots. The DC or low-frequency AC currents used for resistance heating required intimate contact between the rolling electrodes and the skelp (i.e., the plate or strip used to form the cans). Dirt, grease, scale, or other oxide films on the skelp could, and often did, cause enough interference to prevent adequate heating at the bondline interface. Momentary reductions or loss of current could result in isolated or repeated areas of nonbonding called cold welds as well as other imperfections. Lack of fusion due to insufficient heat and pressure is the principal defect, although hook cracks can also form due to realignment of non metallic inclusions at the weld interface. A hook crack or upturned fiber imperfection is defined in API Bulletin TL as, Metal separations resulting from imperfections at the edge of the plate or skelp, parallel to the surface, which turn toward the inside diameter or outside diameter pipe surface when the edges are upset during welding. The precursors for hook cracks are non- metallic inclusions, primarily manganese sulfide stringers. These flattened, nonmetallic inclusions are formed during hot rolling of plate or skelp. In general, they reduce the ductile toughness of the steel even in their normal position (i.e., layers interspersed between the rolling elongated grain structure of the steel). In this position, they can cause poor through-thickness properties that inherently reduce ductile fracture tearing resistance but not necessarily the yield or tensile strength of the material. Near an ERW bondline, however, these weak layers become reoriented such that they are subjected to tensile hoop stress when the pipe is pressurized. The layers may be of sufficient extent or so closely associated that the resulting planes of weakness separate, forming J-shaped (i.e., hook) cracks that curve from being parallel to the plate surfaces near mid-wall to being nearly parallel to the ERW bondline at the OD or ID surface. These cracks can be up to 0 percent of the wall thickness in depth and up to several inches in length. Source: Non-Destructive Evaluation of Low-frequency Electric Resistance Welded (ERW) Pipe Utilizing Ultrasonic In-Line Inspection Technology, 00,Rick MEADE, Tuboscope Pipeline Services, Houston, TX Ibid, note: In the same report, See Table, page, where None Required appears under Repair Method for some metal loss anomalies. None of the flaws listed on Table are annotated as requiring no repair. 0,-=,, x =, 0

11 A.-0-0 longitudinal seams that have not yet been directly examined or repaired could be as high as,. While SDG&E/SCG have no information about any of these potential, flaws, a 0 study of pipe failures informs the risk associated with operating Line 00, with all of these flaws, as proposed, at 0 psig, which would be less than a hoop stress of 0% Specified Minimum Yield Strength (SMYS): there can exist situations in which a pipeline operating at low or moderate hoop stress can fail in a rupture mode, namely: (a) where a defect is both long and deep even where the material is ductile, or (b) where a defect is not so large but the material toughness is extremely low. Five of nine risk categories to Line 00 cannot be mitigated by lowering the MAOP and de-rating the line. In testimony SDG&E witness Mr. Rosenfeld identifies and compares risk categories in a summary graph: outside forces, mechanical damage, incorrect operations, equipment failure, external corrosion, manufacturing ruptures, manufacturing leaks, stress-corrosion cracking and internal corrosion. The last risks in the list will be reduced, but not eliminated, by de-rating Line 00. There will be no change to the other risk categories by de-rating. Based on my expertise and experience, I agree with Mr. Rosenfeld s analysis and conclusions. One of these risk categories that cannot be diminished by de-rating is mechanical damage. Theoretically, mechanical damage is immediately repaired when it occurs. But, if the damage is not reported, it remains in the pipe until it is discovered or the pipe fails. During ILI inspection, dents were identified in Line 00 that had not previously been reported when they occurred, likely caused by rd parties (Construction, +,=, Study of Pipelines that Ruptured while Operating at a Hoop Stress Below 0% SMYS, Michael Rosenfeld and Robert Fassett, Pipeline Pigging and Integrity Management Conference, February -, 0. p. (Attachment L) Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, p.0, Figure, Summary of Probability of Failure Scores.

12 A.-0-0 equipment digging near the pipeline.) These are potential pipeline explosions avoided only because excavators did not completely breach the pipeline. However, the dents remained in the pipeline unreported, representing damage that might later lead to pipeline failure. 0 0 Mechanical damage results from the pipe being struck by excavating equipment. The damage is in the form of a scrape or gouge, often with a shallow indentation. Mechanical damage, if severe, may result in immediate failure of the pipe. More often, the pipe initially withstands the damage which may then cause a failure weeks, months, or even ears after the damage occurred. In fact, mechanical damage is one of the most frequent causes of pipeline failure. There is currently no completely reliable method for assessing the severity of mechanical damage. If it is discovered on a pipeline, it is usually considered to be injurious and requiring immediate repair. Mr. Rosenfeld observes that the susceptibility of a pipeline to mechanical damage failure has been observed to be significantly greater for older vintage pipelines. The INGAA pipeline age study found that natural gas pipelines installed prior to 0 were. times more likely to experience a failure due to being hit by a third-party excavator than pipelines installed after 000, and. times more likely to rupture due to latent (previous) damage. In the end, no amount of inspections or repairs, or de-rating for that matter, can mitigate the 0. thickness of the pipe, which makes Line 00 subject to more mechanical damage than newer, thicker pipe. 0 According to Mr. Rosenfeld, during Post Assessment Report for the 0-0 In-line Inspection of SDG&E Pipeline 00, Pipeline Integrity Transmission Integrity & Analysis, February, 0, p. (Attachment K) Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, pp.- Ibid, Ibid The Role of Pipeline Age in Pipeline Safety, The INGAA Foundation, Inc., November, 0, p., Table (Attachment M) 0 Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, Table, Vulnerability of Line 00 and Line 0 to Excavator Damage, showing that % of excavators are large enough to breach LINE 00, p.

13 A alone there were requests to excavate within 0 ft. of Line 00. This risk cannot be understated. Another risk category that cannot be mitigated by de-rating Line 00 is incorrect operation that can lead to fatigue crack growth, which affects how the metal and welds in the pipeline hold up over time. Incorrect operations would include operating beyond MAOP either purposely or during an unplanned event. It could also include operating in a cyclical pressure range that leads to long term damage from stresses that exceed the pipeline design. Although regulations anticipate that pipeline companies will retain operating pressure records for the life of the pipeline, SDG&E/SCG did not retain operating pressure records. Therefore, it is not possible to analyze actual operating conditions for the life of Line 00. Kiefner and Associates, Mr. Rosenfeld s employer, performed an analysis to determine the susceptibility of fatigue crack growth in Line 00 due to pressure cycles acting on a defect such as a hook crack. Using basic lab calculations applied to specific lab data, the shortest predicted time to failure was years. There is a tendency to rely on this type of calculation for assurance of safety. However, Mr. Rosenfeld points out the fallacies in that prediction: 0 0 While those results would appear to put concerns for hook cracks to rest, there are some residual concerns that cannot be easily addressed. One is that the estimates of time to failure relied on operating pressure dated from 0 and 0 and assumed the pipeline had always operated similarly. Early in its history the pipeline may have operated differently and in a manner that could be more severe from the fatigue standpoint. Secondly, a study of the causes of failures in ERW and flash welded seams performed for the Pipeline Hazardous Material Safety Administration (PHMSA) found that commonly used ductile fracture initiation models gave unsatisfactory (i.e. overestimated) predictions of the failure stress levels of hook crack defects. There was essentially no correlation between predicted and actual failure stress levels... Finally, multiple hook cracks may be present in parallel or aligned and in close proximity to each other. Recent research gives Ibid, Table, p. Ibid, Ibid,

14 A evidence that individual hook cracks can interact with other adjacent hook cracks so as to lead to failure in less time than would be expected with a single hook crack. The most adverse combination is hook cracks occurring on the same side of the seam bondline but with one hook crack on the inside and the other on the outside pipe surfaces. Another type of manufacturing defect (rupture) that may not be mitigated by derating Line 00 is Selective Seam Weld Corrosion (SSWC), which is linked to sulfur content in the pipe because susceptibility to SSWC is enhanced by high sulfur content in the steel. The sulfur content of Line 00 is 0 times higher than modern pipe. According to Rosenfeld, 0 The combination of SSWC and low toughness in the seam bondline, may create a serious defect that is more likely to cause a rupture than coincident corrosion in the body of the pipe, or cause a rupture at low hoop stress. Conventional corrosion evaluation methods such as ASME BG cannot be reliably used to evaluate SSWC if the flaw cannot be accurately sized or if the seam can exhibit low-toughness behavior. SDG&E has so far not reported the occurrence of SSWC on Line 00, however the line should be regarded as susceptible based on its chemistry and seam type. With the potential for low seam toughness at the operating temperature, the occurrence of selective corrosion in Line 00 could pose an integrity concern. A failure in Line 00 would result in a rupture rather than a leak. Line 00 is constructed from A.O. Smith Corporation (AOS) flash welded pipe. Although many small sections of the pipeline have been replaced over time, % of the line segments is still the original pipe that was installed in. Although the industry thought the controlling factors of SMYS and wall thickness were sufficient design parameters for a pipeline, subsequent gas pipeline ruptures in two pipelines resulted in cracks that Ibid, - Ibid, Ibid Ibid Ibid, Post Assessment Report for the 0-0 In-line Inspection of SDG&E Pipeline 00, Pipeline Integrity Transmission Integrity & Analysis, February, 0, p. (Attachment K)

15 A.-0-0 opened along the pipelines for distances of. miles and miles, caused the industry to reconsider design for fracture control. 0 Fracture control would limit the extent of the failure therefore confining a rupture to a short piece of the pipe, rather than miles of pipe. The pipe installed in Line 00 was not manufactured with fracture control in mind because the concept was not known at that time. Therefore, a rupture that is initiated in one flaw could result in a pipe splitting open for a long distance, possibly miles, exposing a large number of people and multiple properties to the effects of an explosion and subsequent gas releases and fires. Rosenfeld explains fracture control as it relates specifically to Line 00, ultimately concluding: 0 The implication of these inherent properties of Line 00 is that in the event of a failure, particularly in the seam but potentially even in the pipe body, a failure would result in a rupture and propagating brittle fracture, rather than a leak. For the reasons discussed in this section the prudent action to promote safety and reliability of the SDG&E/SCG pipeline system serving the San Diego service territory would be to take Line 00 out of service as soon as practicable. 0 V. Taking Line 00 out of service requires additional new infrastructure. SDG&E/SCG did not consider the option of taking Line 00 out of service in the Preliminary Environmental Assessment (PEA), therefore, any additional costs of connecting the proposed L-0 to the distribution systems currently served by Line 00 were not provided in the Application. When asked about the cost, SDG&E/SCG s response was: Customers currently supplied by Line 00 are in SDG&E s service territory and SDG&E has an obligation to provide service. If Line 00 0 Supplemental Testimony of SDG&E and SCG, Atch C, Michael Rosenfeld, Review of Risk Factors for Line 00, February 0, 0, p. Ibid, Ibid,

16 A were hypothetically removed from service, no customer would be stranded without service as SDG&E would modify its gas system to maintain service ahead of the hypothetical abandonment. The geographic areas that would be impacted are communities located in eastern San Diego County between the Riverside County Line and the Marine Corps Air Station Miramar, including, but not limited to, Valley Center, Escondido, portions of San Diego and Poway. Two EG plants are directly served from Line 00 and would be impacted by a hypothetical abandonment of Line 00; however, one EG is served from a segment of Line 00 beyond the scope of the Proposed Project. While not served directly by Line 00, EG plants in the Escondido area would also be impacted. Replacing Line 00 in-kind is not a feasible alternative due to right of way (ROW) issues which drive up the costs. The current condition of Line 00, as described above, dictates that the existing line be permanently taken out of service as soon as practicable. There simply is not a feasible repair option other than replacing the line. Replacement in-kind, as considered in the PEA alternatives, turns out to be far more costly and disruptive to consumers than building a new pipeline along another route. Line 00 was constructed in. At the time, a 0 foot right of way seemed adequate since the cities had not developed around the pipeline. In assessing the option for replacing Line 00 in-kind in the future, SDG&E/SCG describe the current right of way issues: 0... Regardless of which of the alternatives within the existing alignment is considered, construction or installation of new pipe that utilizes the existing Line 00 ROW would require acquisition of additional temporary ROW to establish a safe work area during construction and provide enough room for equipment to maneuver. Generally, a minimum width of 0 to 0 feet of temporary workspace is required to install a -inch natural gas pipeline; however, the width can increase to up to 00 feet in areas with side slopes, bedrock, sandy soils, and/or topsoil salvage requirements. Response to UCAN DR Q.a. (Attachment B) Response to UCAN DR Q.b. (Attachment B) Proponent s Environmental Assessment for the Pipeline Safety & Reliability Project, Volume II, Application -0-0, September 0, (PEA) Chapter, p.-, E-page /

17 A Adequate space for new construction does not exist along the Line 00 centerline because the area surrounding the existing approximately 0-foot-wide ROW has been heavily developed in many locations since the line was originally constructed in. Approximately 00 parcels would be affected in order to obtain the minimum amount of temporary workspace required during construction, including public, private, commercial, and residential properties. Of the parcels anticipated to be affected, approximately homes and other structures would be permanently displaced or acquired due to impacts to primary structures. Further, acquiring the additional ROW would affect 0 public and governmental agencies, including local municipal agencies, municipalities, and state agencies. Approximately commercial buildings, seven apartment buildings, and possibly two commercial pools may require total acquisitions for the additional ROW needed. Ranch and ranchette properties along the existing route would also be affected. The total partial acquisition cost is estimated to run as high as $. million and total costs for ROW acquisition are estimated to be over $0,000,000. However, the actual costs associated with acquiring the additional ROW would be even higher, as this estimate does not include costs such as those associated with the interruption of business activities or acquisitions through eminent domain, which could result in substantial legal fees. Furthermore, because the estimate is based on the minimum ROW width, additional businesses and residences would likely be displaced when site-specific workspace needs are determined during the design phase. In an additional note, consider that SDG&E/SCG s statement also reflects the current proximity of Line 00 to existing buildings, highlighting the risks of major property damage and loss of life in the event of a pipeline explosion. 0 VI. It is not reasonable to rely on Line 00 to supply the entire San Diego region. Line 00 is an aging pipeline that lacks capacity to supply forecasted demand without curtailment. From an engineering perspective, it is prudent to recognize that Ibid, note: The cost estimate to acquire ROW to construct line 00 was modified from $ to $ million to $0 million in the Proponent s March 0 Environmental Assessment Supplement, Appendix A: PEA Corrections and Modifications, p.

18 A Line 00, by itself, cannot supply peak daily demand in the San Diego region, let alone supply a higher than normal level of connected load and peak loads associated with renewable resources going off line after dark, that could be called upon. During routine operations, Line 00 supplies 0 percent of SDG&E s capacity (0 MMcfd) and Line 00 supplies 0% ( MMcfd at psig when operated with Line 00), for a total of MMcfd with both lines operating. By taking Line 00 out of service, the remaining maximum capacity would be 0 MMcfd. While it may appear that Line 00 alone could supply all demand based on demand figures provided in the 0 California Gas Report which shows the highest demand at MMcfd in the year 0, this report is misleading because it is based on annualized forecast demand data for a -in- cold temperature year and dry hydro year condition, 0 a figure that is far from representing actual demand on a real time basis. SDG&E s October 0 Gas Capacity Planning and Demand Forecast Semi- Annual Report developed from the same data as the California Gas Report, shows the highest demand forecast of 0 MMcfd in the year 00 for in 0 year cold day demand. SDG&E/SCG state that Table of the Report provides daily demand forecast data under a different set of temperature conditions, namely the -in- year peak day and -in-0 year cold day mandated design standards. At a capacity of 0 MMcfd/Line 00 would fall short of meeting the -in-0 year cold day demand. Still, this Report is also based on daily average data and gas pipeline systems are not operated based on average demand. Pipelines must be operated to supply peak demand in real time. Supplemental Testimony of SDG&E and SCG, February, 0, p., l.-, and Atch A, Gas Capacity Planning and Demand Forecast Semi-Annual Report, October, 0 p. Prepared Direct Testimony of S. Ali Yari, February, 0 (Attachment A) Supplemental Testimony of SDG&E and SCG, February, 0, p., including foonotes, and Prepared Direct Testimony of David M. Bisi, February, 0, p. (Attachment O) 0 0 California Gas Report, p. (Attachment Q) and Response to UCAN DR Q (Attachment B) Supplemental Testimony of SDG&E and SCG, February, 0, Atch A, Gas Capacity Planning and Demand Forecast Semi-Annual Report, October, 0 p. Response to UCAN DR Q (Attachment B)

19 A.-0-0 As stated in the Prepared Direct Testimony of David Bisi, 0 0 although connected load is not the standard that should be used to design capacity on the system it is a useful indicator of the potential for EG demand that may quickly be dispatched and that may not otherwise be captured under long-term demand forecasting. This potential has already been demonstrated, as the historical maximum SDG&E demand of MMcfd exceeds the SDG&E system capacity of 0 MMcfd. At any point in time during a day s operation, gas demand may peak well above the recorded average. The gas operator must be prepared to supply sufficient gas to meet that peak demand and sustain operating pressures in the pipeline system. In 0, SCG points out that recent requests for service to new natural gas power plants have included quick-start technology, with 0-00% demand in 0 minutes and 0-0% demand in minutes and 0-00% in minute. This demand causes a sudden and rapid pipeline pressure loss, up to 0 psig drop in extreme situations. It is in these situations that SDG&E/SCG must have extra gas immediately available in the pipeline system. In addition, any condition, such as inspecting, testing or repairing Line 00, or an emergency, would result in loss of supply, thus possible curtailments. Loss of Line 00 entirely without an immediate alternate supply source would result in a loss of gas to San Diego until additional supplies could be scheduled through Otay Mesa. Even then, those supplies would be limited to SDG&E s maximum capacity of 00 MMcfd, which would be insufficient at some times, leading to curtailments. Therefore, it is unreasonable to assume Line 00 alone can provide a safe and reliable supply of gas to the San Diego area currently served by Lines 00 and 00. In the future, if Line 00 is retired, a new 0 line will have insufficient capacity to serve Prepared Direct Testimony of David M. Bisi, February, 0, p., l. - (Attachment O) Response to ORA DR 0 Q (Attachment C) Overview of Southern California Gas / San Diego Gas & Electric System Design & Operations, Beth Musich, July, 0 (Attachment P) Supplemental Testimony of SDG&E and SCG, February, 0, p. L.0-

20 A.-0-0 the entire area during peak periods if Line 00 is out of service. I agree with Mr. Bisi when he notes: 0 0 Only a inch or larger diameter pipeline will also provide redundancy for the Moreno Compressor Station, serve an SDG&E demand of 0 MMcfd in the event of an outage of Line 00, and improve SDG&E s capability to meet rapid changes in customer demand. VII. Installing Line 0 is a prudent solution to maintain a safe pipeline system to deliver a reliable supply of gas to the San Diego region. Line 0 would be a new pipeline designed and built to current code that will provide at least another 0 years of safe, reliable service. While Line 0 is envisioned to supplement Line 00 capacity for peak demand and rapid demand increase periods, at it will have sufficient capacity to supply entire region without curtailments when Line 00 is out of service. Total capacity will increase to 0 MMcfd in winter operating season with an MAOP of 0 psig. Line 0 will provide instant access to an alternative supply of gas in emergencies and will allow flexibility in operating to supply day-to-day demand, creating a safe and reliable operating environment. Options to operate more connected load would be possible because additional gas could be delivered to the region. Given the number of undetected anomalies found recently on direct examination of Line 00, one might expect that there are additional, unknown anomalies in Line 00 that were not identified in the recent ILI inspections of that line. With Line 0 in place, SDG&E/SCG will be able to take Line 00 out of service for inspections and maintenance, which will ensure the line is safe to operate and may extend the life of the pipeline. Similarly, the redundancy will also allow ongoing inspections and maintenance of Line 0. When it is time to take Line 00 out of service, the Prepared Direct Testimony of David M. Bisi, February, 0, p., l. - (Attachment O) Response to Energy Division DR (CEA G.0) (Attachment C) Response to UCAN DR Q a. (Attachment B) 0

21 A.-0-0 alternative Line 0, a year younger pipeline, will already be in place that has sufficient capacity to serve the region until the pipeline system is once again re- configured to provide continued flexibility. 0 0 VIII. Conclusion Applying basic engineering principles, it is prudent to design a gas pipeline system in a manner that allows flexibility and redundancy so an adequate supply of gas can be provided to the region at all times, including during peak demand periods, routine maintenance and emergencies. I think a 0 year planning horizon for Line 0 is reasonable, and relying on the past performance of Line 00, or the existing system as a whole, is unreasonable because past performance does not predict future performance for infrastructure. After review of SDG&E/SCG s data for inspections of Line 00, it is evident that there are sufficient known defects and even more unknowns about the physical condition of the line to raise safety concerns regarding continued use of the line, even under reduced pressure. SDG&E/SCG do not know how many flaws lie undetected in Line 00, but the most recent inspection report suggests the number is in the thousands. Line 00 is made of thin walled pipe (. inches thick) compared to current standards, making the pipe more susceptible to rupture by construction equipment, a pipe characteristic that will not change if the line is de-rated. SDG&E/SCG s own expert has concerns about existing hook cracks, selective seam weld corrosion, and the lack of fracture control in Line 00. Finally, no record of how Line 00 was operated from until 0 exists, leaving it unknown whether any of the defects in the line are a result of, or influenced by, fatigue. In consideration of all of the evidence, it is my opinion that Line 00 should be removed from service as soon as practicable because the physical condition of the line makes it risky to continue operation, even at 0 psig. I agree with SDG&E/SCG that replacing Line 00 in kind is not a feasible alternative due to costly right of way issues. And, I also acknowledge that taking Line

22 A out of service will require some additional investment in infrastructure to connect distribution areas currently served via Line 00 to alternate supply lines. In conclusion, in addition to taking Line 00 out of service as soon as practicable, it is my opinion that Line 0 ( ) should be built. The combined capacity of Lines 00 and 0 will provide sorely needed operational flexibility, making the system safer to operate and providing adequate capacity to ensure uninterrupted service into the future. And, from an operational perspective, a new Line 0 will provide sufficient capacity to supply the region when Line 00 is taken out of service.