Kansas Regulators Approve Natural Gas Utilities Pipeline Replacement Plans

natural gas utilities

The 3 natural gas utilities that deliver approximately 90% of Kansas’ natural gas have been ordered to develop a plan to replace obsolete distribution lines in the state.  The reason is that approximately 25% of the state’s 21,800 mile-long distribution system was constructed out of materials such as bare steel and cast iron that are now considered obsolete.

What the Natural Gas Utilities are Planning

The Kansas Corporation Commission (KCC) began looking into this issue two years ago, and has since decided that the replacement of obsolete pipelines needs to be accelerated due to the inherent safety risks of the aging infrastructure.  The three main gas suppliers in the state – Atmos Energy, Black Hills Energy, and Kansas Gas Service – participated in the investigation and were ordered to submit comprehensive 10-year replacement plans within 90 days.

In parallel with the utilities’ plan submissions, the KCC created an Accelerated Replacement Program (ARP) that enables the gas suppliers to charge customers 40 cents per month to help cover the costs.  Leveraging a surcharge to cover infrastructure investment is nothing new, but until the creation of the ARP, the state’s utilities were not allowed to use these surcharges to cover pipeline replacement costs.

Overall, this is great from a reliability, safety, and emergency preparedness perspective.  Leaky gas pipes can create disastrous results leading to full-fledged emergency situations.  By replacing these risky pipes now, the state’s natural gas utilities are dramatically lowering the odds of having a widespread gas emergency.  Hopefully, other states will follow suit sooner rather than later.

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