Gas

The MonThly Magazine of The aMerican gas associaTion march 2010

It All Computes
Utilities Share Their Top IT Strategies
Lynne Ellyn, DTE Energy

moves to Improve Your Utility

p. 12

From Volatile to Variable:

Natural Gas Prices?

Whats Next for

Itron Gas Solutions:

Efficiency for a Cleaner, Smarter Future
Itrons innovative new METRIS Remote Disconnect (RD) meter with 100G Datalogging Gas ERT module helps streamline operations,

The METRIS RD meter with 100G Datalogging ERT module is sold and shipped as a complete package, assembled at Itrons factory. The meter also incorporates many unique features that reduce the

improve customer service and enhance the revenue stream. This new, integrated solution combines Itrons reliable METRIS residential gas meter with the 100G Datalogging Gas ERT module, enabling remote disconnect functionality. With a shut-off valve incorporated into the meter, the METRIS RD meter allows utilities to efficiently disconnect gas service at critical times and negates the need to send a truck into the field. total cost of ownership for a utility over the life of the meter. In an increasingly complex marketplace, these Itron gas products truly provide utilities with the edge they need to succeed.

To k n o w m o r e , s t a r t h e r e

www.itron.com

AmericanGas

cONTENTS march10
Volume 92 | Number 2

FEaTurES
24 It all computes
By KAren ryAnutilities share their top IT strategies.

24

28 From Volatile to Variable

By MiKe PoMorsKiThe new economics of producing natural gas from shale, Canadian imports and lNGcombined with smart energy policycould calm pricing.

18
cOlumNS
2 Presidents Message
communicating in the 21st centuryAGA is embracing new communications tools to spread the natural gas message.

28
DEParTmENTS
Industry News
Number of lIHeAP recipients sets record, utility shut-offs rise; underground utility damages declining, finds CGA study; five strategies that lead to consistently excellent leadership

10

In the Know
Fueling the FutureAccess to new supply has lowered prices, adding yet another advantage to natural gas use, but will new energy laws stymie growth?

34

Vendor News
American Gas advertisers share the latest developments on technology and their companies.

18

Safety First
PhmSa Publishes Final DImP ruleDistribution integrity management programs must be in place by Aug. 2, 2011.

40 41 42 42 43 44

Advertisers Index Places to Be Marketplace Jobline Noteworthies Facts on Gas

20

To Be the Best
Wise about EnergyQuestar Gas Co.s ThermWise conservation program has saved consumers millions.

Cover photo by DaviD MitChell, Dte energy

www.

.org

Presidents Message

Communicating in the 21st Century

aGa is embracing new communications tools to spread the natural gas message.
chief among AGAs priorities has always been the dissemination of timely and valuable information to our membersinformation that will help them run their companies more efficiently, grow customers, increase safety and reliability, and stay abreast of the legislative and regulatory issues being debated in Washington, D.c. From best practices, to energy legislation, to a DOT rulemaking, to the countless AGA-developed studies, white papers and reportsif it provides value, we share it with our members. Yet, in the 21st century, how we share information has undergone, and continues to undergo, a radical transformation. To give just one example, this issue of American Gas is the first issue that many of you are reading in digital form, and we expect that the number of our digital readers will grow exponentially. Yes, we will continue to publish American Gas as a print magazine, but we will now send it out digitally to every subscriber whose e-mail address is in our database, and over time, as more of our readers opt to receive it digitally, we expect to eventually transform into an entirely digital publication. it is quicker, easier, more reliable, less expensive to produce and deliver, and it allows us to be more timely and up-to-date. it is also more user-friendly and interactive, allowing both advertisers and potential customers to communicate with each other directly. And, not incidentally, it is more eco-friendly to produce and distribute. (To take advantage of all of these benefits yourself, change your current subscription to digital only or sign up for your new digital subscription at www.aga.org/Publications/ AmericanGasmagazine/subscribe.) The digital American Gas is just the latest AGA entry into the electronic communication world. in the spring of 2009 AGA introduced its own blog, True Blue natural Gas (www.truebluenaturalgas.org), in which an AGA blogging team shares information and opinions on both natural gas and energy issues with more than 30,000 peoplenow averaging about 3,000 readers a monthwhich puts it in the top 1 percent of blogs in the blogosphere. AGA also uses Twitter to share articles and post updates to almost 500 followers, putting it in the top 5 percent of all Twitter accounts, and AGA also has a Facebook fan page, a Linkedin group for AGA members, and its own YouTube channel to post videos of televised interviews and press events on natural gasrelated issues. Of course, these new 21st century communication tools are designed to work in conjunction with, not replace, our traditional communications outreach. To give just one example, AGAs communications team has developed a comprehensive advertising campaign that is designed to reach all of our key lawmakers and stakeholders in 2010, but this campaign will combine traditional print ads with online banner ads, with the digital American Gas and any other electronic outreach tools that will help us effectively disseminate our highest priority messages to our highest priority audiences. its a new world, with a variety of new communication tools, and those of us who once thought of electric typewriters and fax machines as cutting edge need to embrace it. As Winston churchill once said, there is nothing wrong with change, provided it is headed in the right direction.

DaviD N. Parker President and CeO dparker@aga.org

march 2010

AmericAn GAs

the mOnthly maGaZine Of the american Gas assOciatiOn

the american Gas association represents 195 local energy utility companies that deliver natural gas to more than 64 million homes, businesses and industries throughout the united states. natural gas meets one-fourth of the united states energy needs. Visit us at www.aga.org.

americanGas
VOL. 92, NO. 2 editOrial directOr

Bruce G. Kauffmann bkauffmann@aga.org Bell Communications sbell7@tampabay.rr.com

PuBlisher & editOr in chief Stacey L. Bell

cOntriButinG editOrs Michael L. Murray

2010 BOard Of directOrs

S. Lawrence Paulson Karen Ryan Laura Sheehan

GraPhic desiGn Lynn Riley Design

Officers chairman Of the BOard

directOrs

lynn@lynnrileydesign.com
adVertisinG Melissa Massey

Robert C. Skaggs Jr. NiSource Inc.

first Vice chairman

Mohanna Sales Representatives 214/291-3664 melissa@mohanna.com

circulatiOn manaGer Sherri R. Hamm

John W. Somerhalder II AGL Resources Inc.

secOnd Vice chairman

shamm@aga.org
suBscriBer custOmer serVice 866/512-3111

Nick Stavropoulos, National Grid

immediate Past chairman

fax 845/267-3478 AmericanGas@cambeywest.com

Thomas E. Skains Piedmont Natural Gas Co. Inc.

President & ceO

American Gas (ISSN 1043-0652) provides natural gas industry professionals with the information they need to enhance their effectiveness and that of their companies by publishing leading-edge reports on the industry and on American Gas Association activities that offer value to its members. American Gas is published monthly (except for bimonthly August/ September and December/January issues) by the American Gas Association, 400 N. Capitol St., N.W., 4th Floor, Washington, DC 20001. Phone numbers: advertising, 972/596-8777; editorial, 813/741-1772; circulation, 866/512-3111; fax, 845/267-3478. Statements of fact and opinion herein are the responsibility of the authors and advertisers alone and do not imply an opinion or endorsement on the part of the American Gas Association. annual suBscriPtiOn: $59 domestic (United States), $110 foreign. Single copies, $7.50 each domestic, $12.50 each foreign. Periodicals postage paid at Washington, D.C., and at additional mailing offices. POstmaster: Send address changes to American Gas, P.O. Box 317, Congers, NY 10920-0317. rePrints: For high-quality reprints of articles to use in your educational, promotional or sales efforts, including electronic reprints, contact Lori Noffz at The YGS Group at 717/505-9701, x104 or lori.noffz@theYGSgroup.com. 2010 American Gas Association. All rights reserved. Reproduction in whole or part without written permission is prohibited.

David N. Parker American Gas Association

General cOunsel

Kevin B. Belford American Gas Association

cOrPOrate secretary

Gary W. Gardner American Gas Association

chief financial & administratiVe Officer

Kevin M. Hardardt American Gas Association

Michael W. Allman, Southern California Gas Co. Lawrence T. Borgard, Integrys Energy Group Kevin Burke, Consolidated Edison Inc. Scott A. Cisel, Ameren Illinois Utilities Kim R. Cocklin, Atmos Energy Corp. Randall L. Crawford, EQT Corp. Kenneth W. DeFontes Jr., Baltimore Gas & Electric Co. Laurence M. Downes, New Jersey Resources Niel C. Ellerbrook, Vectren Corp. David R. Emery, Black Hills Corp. Benjamin G. Fowke, Xcel Energy Inc. Michael I. German, Corning Natural Gas Corp. David L. Goodin, MDU Utilities Group William D. Harvey, Alliant Energy Chris Hermann, E.ON U.S. Glenn R. Jennings, Delta Natural Gas Co. Inc. Ronald W. Jibson, Questar Gas Co. Gregg S. Kantor, NW Natural Ralph A. LaRossa, Public Service Electric & Gas Co. James P. Laurito, Central Hudson Gas & Electric Corp. Terry D. McCallister, WGL Holdings Inc. David M. McClanahan, CenterPoint Energy James T. McManus II, Energen Corp. Scott Morris, Avista Corp. Jerry Norcia, DTE Energy Denis OBrien, PECO Energy Greg Pruett, PG&E Corp. Stephen P. Reynolds, Puget Energy John G. Russell, Consumers Energy Jeffrey W. Shaw, Southwest Gas Corp. David F. Smith, National Fuel Gas Co. Russ M. Strobel, Nicor Inc. Gary L. Sypolt, Dominion Resources Inc. John L. Walsh, UGI Corp. Daniel E. Watson, SourceGas LLC Douglas H. Yaeger, The Laclede Group Inc.
adVisOry directOrs

R. Allan Bradley, Questar Pipeline Co. Julie A. Dill, Union Gas Limited Russell K. Girling, TransCanada Corp.

in the know

Industry InsIghts

Fueling the Future

access to new supply has lowered prices, adding yet another advantage to natural gas use, but will new energy laws stymie growth?
Not loNg ago the outlook for the U.S. natural gas industry was one of strong demand growth (driven by gas demand in the electric generation sector), declining domestic supply, a need for significantly more liquefied natural gas (lNg) imports to meet growing demand and a robust price environment. times have changed, really changed.

linked environmental policy) been more hotly debated. The nation can achieve the quickest emissions reductions at the lowest possible cost by using more natural gas in the power sectorgas that is indigenous, abundant and clean. in addition, with the right commercial agreements, consumers can lock in affordable prices, and producers can be assured of sufficient revenue to provide continued, costeffective supply. natural gas has to be a growing component of the U.s. supply portfolio, and its future should be very bright.

What a Difference a Year Makes

in 2009, global energy demand decreased sharply in the face of the global recession. negative effects from the financial crisis also were felt across the energy industry as credit markets contracted and access to investment capital became more costly and constrained. in the United states, consumer spending, housing starts and manufacturing indices were all down sharply while the unemployment rate increased to more than 10 percent. According to the energy information Administration (eiA), 2009 end-use natural gas demand fell by approximately 2 percent (1.3 Bcf/d) relative to 2008, largely driven by losses in the industrial sector. industrial gas demand fell by approximately 8 percent (1.5 Bcf/d) in 2009 relative to 2008. Although the economy appears to have bottomed out with some signals of recovery, it could take several years before industrial gas demand reaches historical 20072008 levels again.

This past 18 months, the north American natural gas industry has witnessed some remarkable changes: a global financial crisis, a global recession, significantly lower demand, growing U.s. supply, declining canadian supply, growing LnG supply and imports, and bloated storage inventories. The result: the lowest natural gas prices seen in seven years (summer 2009). Looking ahead, what does the U.s. energy future hold, and what role will natural gas play? never has energy policy (and inextricably
6
March 2010 AmericAn GAs

a New Paradigm: coal to Gas Switching

not surprisingly, the U.s. electricity demand also decreased 34 percent in 2009 relative to 2008. What may have surprised some is that natural gas demand in the power sector
BRIAN E. FRANK is president

of BP Energy Co. and president of BPs North America Gas and Power business, based in Houston.

in the know

increased by 4 percent (0.7 Bcf/d) on a year-over-year basis. in 2009, we witnessed the first real price competition between coal and natural gas. The market works: According to the eiA, the first material signs of coal to gas displacement began in February 2009 when gas prices first crept below $5/mmBtu. estimates of incremental gas demand as a result of coal displacement increased to 3 Bcf/d at its peak in the summer when gas prices fell below $3/mmBtu. Has a new, real price floor emerged for natural gas (i.e., coal)? How will coal prices respond in the face of high stockpiles, long-term supply contracts and global supply/demand balances? Understanding this price substitution and fuel competition is even more critical in the face of climate change discussions where both gas and coal are positioning for long-term market share.

Tcf, released in December 2008). This resource development is occurring not only in traditional gas and oil states such as Texas, Louisiana and Wyoming, but also in Pennsylvania, Ohio and upstate new York. While conventional gas production in traditional midcontinent or Gulf coast areas is
u.s. gas resource by type (tcf)
Shale CBM Conv/Other 2,074

1,451

1,532

a Quiet revolution
Despite the global recession and financial meltdown, a quiet revolution has occurred in north American gas fields. U.s. dry gas production increased in 2008 by an unprecedented 3.4 Bcf/d despite production declines from hurricanes Gustav and ike. Without those disruptions, production growth would have been closer to 5 Bcf/d or just under 10 percent year on year. And throughout 2009, in the face of sub $5/mmBtu gas prices and more than 50 percent fewer rigs drilling, U.s. production remained relatively stable. By historical standards, this is truly amazing. What is driving this situation? strong natural gas prices through the 2000s coupled with the application of improved hydraulic fracturing techniques and horizontal drilling enabled access to unconventional supplies, namely shale gas. estimates vary, but the United states may now be sitting on 50 to100 years worth of recoverable natural gas (note Potential Gas committee resource estimate of 2,074
8
March 2010 AmericAn GAs

2003

2006

2008

Note: Gas resource includes proven, potential and probable reserves. Source: NPC 2003, PGC 2009

u.s. gas demand in 2020 by sector (tcf)

Electric Industrial Res/Comm Other 32.1 26.9 23.3

expected to decline with lower drilling activity, increased production from new shale plays such as Haynesville and marcellus shale basins could offset these losses in the future. And this new shale gas supply is cheap! Breakeven cost estimates in these new plays are significantly lower than other conventional or unconventional plays. Producers today believe the economics will only improve as the industry shares best practices and becomes more efficient at developing the resource. We are witnessing a significant shift in the U.s. domestic supply curve: could we conceivably grow domestic production in a $5/mmBtu pricing environment when just a few years ago we struggled to do the same at $7$8/mmBtu? To be clear, the producer with the lowest cost structure and access to the lowest cost supply will be best positioned for success. The introduction of these economic shale gas plays is driving a paradigm shift in the U.s. supply portfolio. couple this with 16 Bcf/d of LnG regasification capacity now available in the United states and canada (operating at only ~15 percent utilization rate) and the possibility of new northern frontier supply from Alaska and/or mackenzie Deltathe United states (and north America, for that matter) appears to be long on gas supply.

Natural Gas: The Forgotten Fuel?

At this critical junction in natural gas resource development, debates continue around energy market efficiency and climate change, with a mixed bag of conflicting and distorted data. The U.s. gas future will not only be shaped by evolving supply/demand balances but also by policy and regulatory changes. in its most recent long-term outlook, the eiA predicts U.s. energy demand will increase from 96 quadrillion (quad) Btu in 2009 (reflecting the recession) to 105 quad Btu in 2020equal to almost one more state the size of Texas (from a demand

2003

2006

2008

Source: EIA AEO

perspective). But while total U.s. energy demand is expected to increase, eiA projects natural gas demand will remain relatively flat over the same time period at 23 Tcf/y. more specifically, in the key power generation sector where natural gas competes with other fuels, demand for coal, nuclear and renewables is expected to increase between 2009 and 2020 while natural gas usage is expected to fall. in fact, while U.s. gas resource estimates have been steadily increasing over the past five years, projections for future gas demand have been steadily decreasing (see chart). The climate change policy debate drives further to the heart of the issue. The Waxman-markey bill passed by the House in June 2009 clearly highlights a risk of natural gas being marginalized as the forgotten fuel and big loser relative to the proposed incentives for coal and renewables in the power generation sector. Alternative fuels clearly have an important role to play, but realistic expectations are just as important. Unattainable goals for alternatives risk rendering the entire effort politically and economically unsustainable. As we seek to diversify our energy portfolio, we cant forget basic facts: except for the 9 percent of U.s. energy that is generated by nuclear power and the 7 percent that comes from hydro and renewables, the U.s. economy runs on fossil-based fuels. A clearer road map is desperately needed to attain the countrys energy goals. in the near termthe next 510 years or soour energy path for power and heat needs to consider the following: 1 > new electricity capacity should be met by renewable energy sources developed at a pace that is technologically and economically sensibleaided by transitional incentives and natural gas; 2 > The oldest, lowest efficiency coal plants should be substituted or replaced by natural gas-fired, modern combined-cycle plants.

Over the medium- to longer-term, the electricity/heat demand mix should be met by: 1 > renewables and alternatives; 2 > natural gas; 3 > nuclear; 4 > coal with carbon capture and sequestration (ccs) technology. U.s. electric utilities historically have favored coal over natural gas, and with good reason. compared with coal, natural gas has often been both more expensive and more volatile. The recent low price of gas has increased its market share of power generation. With a growing supply base, natural gas should be competitively and environmentally advantaged to sustain such growing market share. To capitalize on this advantage and compete with coal, natural gas will need to address price volatility. end users will need to have access to all the tools necessary to hedge price risk and volatility. regulated utilities especially must be able to hedge against price uncertainty using available market-based mechanisms with regulators ensuring a level playing field with financial products and

contracting practices. With the proper risk-management tools, a producer can bridge low price cycles and consistently attract the required capital investment to reliably bring U.s. gas supply to market and balance demand at competitive energy prices. residential and commercial customers, meanwhile, also are further insulated from periodic fluctuations in wholesale supply and demand. Our new abundance of domestic gas resources should give the power industry, gas utilities and their regulators the confidence to discuss longer term supply arrangementswhile consistent demand gives producers the confidence that such arrangements can be sustainable and profitable. Using existing technology, greater use of natural gas can provide us with the quickest, most realistic path to meaningful emissions reductions at the lowest cost. it is no longer a bridge fuel but a destination fuela fundamental fuel in a lower carbon world. natural gas is here. its now. its cleaner. its more affordable. What are we waiting for?

Contact Us Today for All of Your Pipeline Service Needs:

Engineering Project Management Internal Inspection Field Services
HollandEngineering.com

AmericanGas_mech.indd 1

AmericAn GAs

March 2010 9 4/20/09 9:43:38 AM

PeoPle Trends evenTs

news

industry

number of LIheAP recIPIenTs seTs record, uTILITy shuT-offs rIse

The number of households

receiving energy assistance through the Low income Home energy Assistance Program (LiHeAP) reached record levels in fiscal 2009, a survey of state LiHeAP directors showed. This was the second straight year that a record was set, reported the national energy Assistance Directors Association (neADA), which conducted the survey. neADA said that based on initial application rates, the number of families applying for assistance in 2010 will increase by 20 percent. The current LiHeAP funding level will not be sufficient to meet the need if current trends continue, neADA said. The survey also reported that approximately 4.3 million households had their utility service shut off in fiscal 2009, up from 4.1 million in 2008, despite the fact that congress increased LiHeAP funding from $2.57 billion in fiscal 2008 to $5.1 billion in fiscal 2009. neADA reported that only 18 percent of eligible households received LiHeAP assistance. Families whose utility service was shut off in fiscal 2009

owed a total of $1.2 billion, up from $1 billion in fiscal 2008. The average amount owed increased from $253 to $279. But the number of households that were at least 30 days behind in their bills decreased in fiscal 2009, to 12.5 million from 13.1 million. Those families owed about $3.4 billion in fiscal 2009 as compared with $3.6 billion in 2008, but the average amount owed increased from $272 to $276. The survey included both natural gas and electric utility service.

neADA reported that in fiscal 2009, 8.3 million households received energy assistance (7.7 million for heating and 600,000 for cooling), compared with 6.1 million households (5.8 million for heating and 300,000 for cooling) in 2008. eleven states reported increases of 50 percent or more in households receiving assistance: california, 162 percent; Texas, 122 percent; Florida, 104 percent; nevada, 80 percent; Arizona, 80 percent; Oklahoma, 76.3 percent; Kentucky, 72.1 percent; Delaware, 71 percent; Tennessee, 62 percent; Oregon, 55 percent; and Washington, 54 percent. Lawmakers had asked President Obama to release more than $590 million in emergency LiHeAP funds. separate letters signed by 48 senators and 113 House members from both parties said, We urge you to release these resources as soon as possible to address the needs of families and seniors who are struggling in the current economic crisis. On Jan. 20, the president released $490 million in emergency LiHeAP funds.
www.neada.org

10

march 2010

AmericAn GAs

Heard It

Through the Pipeline

CGA: Underground Utility Damages Declining

The implementation of the national Call 811 program in May 2007 is having a positive impact on the estimated number of U.S. underground utility damages, finds the Common Ground Alliance (CGA), based on data gathered for its Damage Information Reporting Tool (DIRT) report. The most recent report contains data from 2008 and was released in August. Overall, DIRT found that the estimated total number of underground utility damages occurring in the United States in 2008 decreased to 200,000 from the 2007 level of 256,000 and the 2004 level of 450,000. More than half of the reported incidents had a known root cause: 37 percent were because of a lack of notification, 37 percent were due to insufficient excavation practices, 22 percent were attributed to insufficient locating practices, 3 percent were due to insufficient notification practices and 1 percent was classified as miscellaneous root cause. Reported damages due to notification not made as the root cause had been as high as 48 percent in 2004, the year when DIRT submissions began, with 200,000 incidents in 2004 attributed to that cause. In 2008, about 75,000 incidents were linked to a lack of notification. As in past reports, natural gas companies, telecommunications stakeholders and onecall centers provided the bulk of the records. Participation for 2008 continued to rise: 121,384 records were collected in 2007, and that number increased to 135,521 for 2008.
www.commongroundalliance.com

Make no mistake, natural gas is not a bridge fuel. It is the super highway to a clean, energy-efficient, secure future, and both our fuel and our companies will be serving customers for a long, long time to come.
AGA ChAirmAn robert SkAGGS Jr., SpeAkinG to the new York SoCietY of SeCuritY AnAlYStS on JAn. 27

AmericAn GAs

March 2010

11

news
The Recession-Proof utility: Focus on leadership
working, others will noticeand they will be resentful. But worse than test of time do so for one reason and merely causing contention in the one reason only: consistently excelranks, turning a blind eye to poor lent leadership, says Quint studer, performers squelches profitability. author of the new book Straight A Leadership: Alignment, Action, Account- middle performers get pulled down ability. Products and services change to the low-performer level, while high performers either disengage or leave. with the demands of the market. individual leaders come and go. The Too many of us give low performkey is to create an organizational ers a pass, says studer, whose remedy culture that ensures great leadership involves implementing a structured today and tomorrow. series of high-middle-low performer conversations. The low performer is in a recent news release, studer an anchor holding everyone else back. recommended five strategies that will make this year the year you quit lookhelp companies do just that: ing the other way. ax low performers. Now. Despite the layoff ax so many compaaccentuate the positive. The nies wielded during the past year, low next time youre having lunch in a performers still work inside many orrestaurant, listen in on the conversaganizations. And they are causing big tions at nearby tables. chances are, problems. if an employee consistently youll hear people griping about their comes in late, takes long lunches workloads, difficult clients, annoying 51342_NRI_TrdntWrpSl_HP_AG.qxd 12/18/09 3:55 or the ridiculousness of corand spends more time chatting than coworkers PM Page 1
Solid buSineSS results that stand the

industry

porate policy. everyone does it, but if they realized how harmful it is to their company, perhaps theyd think twice. The solution, says studer, is to hone the fine art of managing up. managing up means positioning your people, products or company in a positive light, says studer. Help employees understand what can happen when negativity is allowed to breedgood people quit and customers leaveand theyll be more likely to stop doing it. make a real connection with employeesevery day. studer is a big proponent of what he calls rounding for outcomes. Think of a doctor making her daily rounds to check on patients; rounding helps you com-

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American Gas Association Operations Conference

This premier technical forum for the U.S. and international natural gas utility and pipeline industries will feature more than 100 presentations by leading operating and engineering professionals on such timely topics as
Distribution & Transmission Integrity Management Gas Control control room management, fatigue management, alarm management Gas Quality & Interchangeability Management LNG imports, biogas, composition Construction & Maintenance leak survey & repair, live system maintenance Operations Safety pipeline, supplemental gas, customer, contractor Distribution & Transmission Gas Measurement Management Supplemental Gas Supply Operations LNG, propane-air plants, biogas, underground storage Corrosion Control Management casings, coupons, detection, prevention Environmental Matters climate change, energy efficiency, greenhouse gas emissions, environmental data management Distribution & Transmission Engineering Operations Planning & Support Employee Health & Safety industry leader practices, ergonomics Utility & Customer Field Services workforce management, field workload management Plastic Materials performance, material, failure analysis Look for the conference program and registration details at www.aga.org/events beginning in January.

Working Hard

Big Easy

in the

May 11-14, 2010 Hilton New Orleans Riverside New Orleans, Louisiana

General Information Debbie Ellis 202-824-7338 | dellis@aga.org Sponsorship Opportunities Annemarie ODonoghue 202-824-7032 | aodonoghue@aga.org

news
municate openly with your employees. But its not just empty face timeits rounding for outcomes, which means the process has a serious purpose. Take an hour a day to touch base with employees, make a personal connection, recognize success, find out whats going well and determine what improvements can be made, studer explains. Say thanks. In fact, put it in writing. studer recommends sending thank you notes to employees who do an excellent job, and he believes management should literally mandate a specific number of thank you notes for leaders to send to the people they supervise. A thank you note is too powerful a tool not to use, studer says. People cherish them. He explains that the best thank you notes compliment a specific action the recipient has performed, is handwritten and sent to the employees home rather than laid on his desk along with a stack of reports and memos. Dont just recruit great employees. Re-recruit them. if you plan to hire in 2010and as the recovery (hopefully) picks up steam, many willheres a relatively easy step that will pay off big. We all know employee turnover is expensive. But did you know that more than 25 percent of employees who leave positions do so in the first 90 days? To retain a new team member, the leader needs to build a relationship. studer has found that scheduling two one-on-one meetings, the first at 30 days and the second at 90 days, has an enormous impact on retention. if these meetings are handled successfully, new employee turnover is reduced by 66 percent, says studer, who suggests using a structured list of questions to discover not only whats not going well, but also what is going well. Once you start implementing these tactics, results quickly follow. Your employees will see that you care about them, which boosts morale, which improves performance, which leads to happier customers, which leads to higher profits, studer says.
www.studergroup.com

industry

Tell Us about It!

Have a story idea or feedback on something youve read in American Gas? Let us know! Contact editor Stacey Bell at sbell7@tampabay.rr.com or 813/741-1772.

dep
planning and feasibility studies pipeline and facility design automation and control systems pipeline integrity total project management metallurgical consulting and operational support

dable
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March 2010

15

news
Missouri Utilities Join Forces to Provide Energy-Efficiency Bill Credits
Two Missouri uTiliTies have joined forces to provide their customers with up to $1,200 in bill

industry

credits for making energy efficiency improvements in their homes. Missouri Gas Energy (MGE) and KCP&L have formed a partnership that is part of the Environmental Protection Agencys Home Performance with Energy Star program, a national initiative designed to give homeowners the resources to make energy-efficient home improvements. While numerous utilities across the country are participating in the program, MGE and KCP&L say their partnership is unique. Under the program, a trained and certified energy auditor performs a whole-house energy audit to find areas where energy is being lost. The auditor then prepares a list of home improvements to correct each deficiency. The homeowner can select and implement one of the qualifying improvements, and KCP&L and MGE will each reimburse the customer up to $600 for the combined cost of the energy audit and qualifying home improvements. While the energy audit is comprehensive and may list many steps the homeowner can take to become more energy efficient, only improvements to the building enveloperepairing broken ductwork, caulking and sealing air leaks, adding more insulation, replacing leaky doors and windowsqualify for reimbursement. The program is administered by the Kansas City Metropolitan Energy Center, which is also responsible for certifying auditors and ensuring that each audit and home improvement meets program standards. Jason Fulp, external communications and marketing representative for MGE, said the program has been way more successful than we ever anticipated. He said about 200 homeowners have received rebates since the program began in September. Fulp said he expects the program to snowball, noting that Kansas City has already incorporated Home Performance with Energy Star into its Green Impact Zone program, which is designed to transform a blighted urban neighborhood into a sustainable community, aided by federal stimulus funds. Fulp added that the Missouri Public Service Commission encouraged KCP&L and MGE to develop the energy efficiency program as part of decoupling rate structures approved for the utilities. The utilities then decided to join forces to develop a marketing strategy to maximize customer participation, create a consistent logo and reduce costs.

Heard iT

Through the Pipeline

we will champion environmentally safe offshore energy exploration and production, bringing with it thousands of new jobs, hundreds of millions in new state revenue and billions in new investment.
Inaugural address of VIrgInIa goV. robert Mcdonnell

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march 2010

AmericAn GAs

pay Your energy Bill, plant a tree

Corporate soCial responsi-

bility programs are good for a companys reputation as well as good for business, reports consolidated edison company of new York inc. (con edison). To encourage more customers to sign up for e-bills, which reduces bill-processing costs while helping conserve the environment, con edison donates $1 to tree-planting organizations for every new e-bill enrollee. The utility recently partnered with millionTreesnYc, a public-private initiative to assist in planting 1 million new trees across new York city. Plantings are funded by con edisons paperless e-billing program. This go green with e-bills program has resulted in more

Coned employees participate in a tree-planting day. the utilitys e-billing program has resulted in thousands of trees being planted in New York City.

than 200,000 customers enrolling in e-billing since the inception of the program in may 2007. The campaign helps reduce greenhouse gas emissions by millions of pounds, the utility reports. replacing paper bills with electron-

ic statements is a simple step all of us can take to improve our planet, says George roach, systems specialist at con edison. The e-billing incentive helps strengthen our online relationships with customers while representing a significant part of our green, sustainability efforts. The average household can save almost 7 pounds of paper annually by switching to electronic bills, statements and payments, according to the PayitGreen Alliance. For details on con edisons environmental initiatives, visit www.facebook. com/powerofgreen.

9th Annual

GAS SHALES SUMMIT

June 2 3, 2010 | Marriott Houston West Loop by The Galleria | Houston, TX
Program Chair: Peter Duncan, President & Founder, MicroSeismic Inc.
This year expects to be our biggest event ever! Join us at the 9th Annual GAs shAles summiT to discuss: Realities of shale gas resources for today and tomorrow Current operating regulations and future trends Current field practices fracing present and future Environmental dilemmas and challenges Gas shales industry perspective goals and challenges in the new economic climate
Media Partner

For full conference details visit

www.insightinfo.com/gasshales

AmericAn GAs

March 2010

17

SAFety FIRSt

safety | security | reliability

PHMSA Publishes Final DIMP Rule

Distribution integrity management programs must be in place by aug. 2, 2011.
On Dec. 4, 2009, the U.S. Department of Transportations Pipeline and Hazardous Materials Safety Administration (PHMSA) issued the long-awaited final regulation for distribution integrity management programs (DIMP).

by all these stakeholders, the industry now has a regulation that is flexible, reasonable and cost-effective for utilities to implement. With volatile energy prices, a deep recession and the costs associated with transmission integrity management, it was critical for utilities to have a DimP rule that does not impose a large financial burden that would have ultimately been absorbed by utility ratepayers.

a Look at the Final rule

Here is a high-level overview of the key components of the rule. A DimP plan must include the following elements: 1. Demonstrate knowledge 2. identify threats 3. evaluate and rank risk 4. identify and implement measures 5. measure performance, monitor results and evaluate effectiveness 6. evaluate and improve periodically 7. report results Distribution operators must submit annual reports to PHmsA providing the following performance measures: number of hazardous leaks eliminated/repaired (by cause), number of excavation damages, number of excavation tickets from one-call centers and total number of leaks eliminated/repaired (by cause). Operators must annually report data about each failure of a compression coupling that resulted in a hazardous leak. The rule mandates the installation of excess flow valves on single-family residences, where feasible. An operator is allowed to submit an application to its state regulator for reducing the frequency of a periodic inspection that is required by code. Distribution operators must develop and implement a DimP plan by Aug. 2, 2011. significantly, the rule represents a vast improvement over the notice of Proposed rulemaking issued in June 2008. several proposed items ended up being removed or revised. These include the removal of the Protection Through People concept, the elimination of a plastic pipe failure reporting database and

ANDREW LU is AGA

director, operations safety.

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March 2010

mandated by the 2006 Pipeline safety Act, the DimP rule represents a monumental, performance-based regulation that ushers in a new era of risk management for utilities in complying with pipeline safety regulations. in the past, code compliance was based predominately on a uniform set of prescriptive regulations for all distribution operators. DimP requires operators to perform a risk assessment of their own distribution system, and it enables a potential reallocation of company resources that will enhance the safety of the infrastructure and reduce overall system risk. AGA is pleased that PHmsA stayed true to the principles included in the DimP Phase 1 report, published in December 2005. AGA also commends PHmsA for following the various recommendations made by the Technical Advisory committee, which provided guidance on this rule at its meeting in December 2008. The collaborative approach taken by PHmsA in crafting this regulation allowed input from state regulators, public interest groups and, of course, natural gas distribution operators. As a result of efforts exerted

AmericAn GAs

removal of burdensome documentation requirements that would have forced operators to keep detailed information of all decisions made relating to their distribution integrity management program.

Putting the rule into Practice

AGA recently visited with those responsible for DimP at three member companies to obtain their initial thoughts on the new regulation. rick Lonn is director of regulatory compliance at AGL resources, Art shapiro is principal engineer of regulatory compliance for national Grid and Jerome Themig is manager of gas compliance for Ameren illinois Utilities (AiU).
AmericAn GAs: In general, how will the DIMP rule change the way your company performs operations and maintenance work? Lonn: it will be much more datadriven. Well have to capture more data when weve got the pipe exposed and use that data more effectively to help us prioritize our day-to-day and longer-term operations shApiro: The work will stay the same, but emphasis should become ever more focused on reduction of risk. Our goal will be ongoing improvement of system safety and performance, based upon quantitative measures. ThemiG: in general, there will be more focus on the operations and maintenance data collected through routine activities. DimP will provide an opportunity to develop uniform business processes across the four legacy companies that form AiU. AmericAn GAs: Describe the progress your company has made so far in preparing for the new DIMP requirements. Lonn: To date weve had a twopronged approach. First, a focus on standardization of data capture across our utilities, including extracting the data from our various stand-alone iT systems. second, we have focused on

developing the DimP plan itself. shApiro: We were deeply involved in the development of the rulemaking and the GPTC Guide [Ansi/ AGA Z380109 GPTC Guide for Gas Transmission and Distribution Piping Systems, available at www.techstreet. com/agagate.tmpl], so we had the advantage of familiarity with developments from the earliest stages. We also have worked with the northeast Gas Association and southern Gas Association on developing a generic distribution integrity management program. Our focus this year will be bringing together existing risk management programs under the DimP umbrella, and finding and filling any gaps that may exist. ThemiG: AiU formed a DimP Team in early 2009 to assess the potential business-level impacts of the proposed rule, identify potential gaps in data/processes/procedures/system, and create a framework for a program. The team completed this initiative in December 2009 and has handed off the results to the DimP implementation Team.
AmericAn GAs: What issues do you ex-

AmericAn GAs: From an implementation perspective, what are the parts of the regulation that you feel will be most challenging for operators? Lonn: i think the most daunting thing to us as operators will be the amount of effort associated with trying to consolidate the data from our various iT systems with paper records so that we as operators can properly manage the risks to our system. shApiro: This will vary widely. For some, Know the system may be problematic. Others need to mature their risk assessment processes. ThemiG: collection and assessment of knowledge of the system. There are many legacy company practices that are currently used. To be successful long term, AiU will need to integrate a number of processes and change the methodology of collection of data, that is, paper records filed at the work headquarters to electronic documents stored in the Gis system.

Much Work ahead

Although the industry now has a final rule, there is still much work ahead. AGA staff will continue working with AGA members to assist them in implementation. AGA also will work with state and federal regulators so that its members can be confident that enforcement of the regulation is consistent with the intent of the new rule.
EDITorS NoTE: For more information on DIMP, please see Getting ready in the May 2009 American Gas. Visit www.aga.org/Pubs/magazine/ past_issues/2009/may09/.

pect to receive the greatest focus as your company prepares its DIMP plan? Lonn: Obviously, excavation damage is a major threatparticularly in the states where we operate that dont yet have effective enforcement. A second area of focus would certainly be leakage on aging infrastructure such as bare steel, cast-iron and early plastics. shApiro: As a company that is transitioning from one comprised of many legacy utilities to one that operates as one company, one way, balancing risk across the enterprise will require close attention and flexibility, as issues vary across our operations. Our next generation of work management and property record systems will need to be more easily used for asset and risk management. ThemiG: i expect to see more focus on the prevention of third-party damage and a more detailed assessment of compression-coupled systems.

BLOG
truebluenaturalgas.org
AmericAn GAs March 2010

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To Be The BesT

Great Ideas | solutIons

Wise About energy

Questar Gas co.s ThermWise conservation program has saved consumers millions.
Aim high. For three years, that philosophy has guided Questar gas Co.s approach to its energy conservation programs. And its working: Since 2006, the companys ThermWise program has exceeded everyones expectations largely due to a unique marketing campaign, program designers say.

The conservation programs began when Utah regulators approved rate decoupling, starting in October 2006, to keep the companys revenue stream whole. in return, regulators required Questar to launch an assertive energy conservation program. The utility, which serves 900,000 customers in Utah and southwestern Wyoming, created a comprehensive program that has inspired about 100,000 of its residential customers to participate over the past three years. Questars commitment to saving energy and saving its customers money has required a corresponding commitment in dollars devoted to creating and implementing a comprehensive energy efficiency program. Based on the companys research, a budget of $6.9 million was set for the first year to pay for marketing, program management and rebates for items such as attic insulation, home energy audits, energy efficient appliances, weatherization and builder rebates. Dan Dent, Questar Gas director of demand-side management, recalls that everyone was afraid that figure might be too optimistic.
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March 2010 AmericAn GAs

We spent $7.4 million that first year, he remembers. We exceeded not only the budget, but our participation goals and our energy savings goals. The same situation occurred the following year. The utility projected participation that would be handled with a $10.5 million budget, but skyrocketing customer interest actually required an $18 million investment. in the years ahead, consumers will reap great rewards for participating. Based on todays natural gas prices, 2007s $7.4 million investment will save $17 million in averted energy costs over the lifespan of that years conservation efforts. The lifetime benefit for 2008s ThermWise investment of $18 million is expected to be $44.5 million, and the estimated $47.3 million for costs in 2009 is expected to achieve, over time, $130.5 million in savings. The grand total for the first three years: A $72.7 million investment is estimated to produce $192 million in energy savings over the long runand conserve 48 million decatherm.

creating a road Map for Savings

customer interest and participation in Questar Gas energy efficiency programs soared in 2009, largely due to the economy. When the housing bubble burst, out-of-work homebuilders suddenly switched to installing more attic insulationmade especially attractive by rebates being offered by Questar and rocky mountain Power, the primary electric utility for the area. And residential customers, already struggling with job loss and declining net worth, were enamored with any program that could keep more money in their pocket. When the final figures come in for 2009, Dent says, Our spending will be about $47 million, and i would say that $42 million or $43 million of that is residential. Were not spendDON PORTER is a

communication specialist at Questar Gas.

ing as much on commercial because our strategy in the beginning is to get that low-hanging fruit. As that dwindles, we will refocuswhich were starting to do in 2010our advertising and marketing efforts to target the business market. its a tougher sell. matt Gibbs, principal for Questar subcontractor nexant, credits the utilitys success with ThermWise to its creation of and subsequent adherence to a market characterization reporta road map, if you will, for the ThermWise energy savings initiative. it established which goals were realistic according to the amounts of money being spent and what programs should be used to reach those goals. We made the campaign something practical that could then be implemented, Gibbs explains, adding that he believes Questar stands out from the pack of natural gasonly utilities offering incentives due to its very aggressive marketing effort. That marketing effort includes widespread use of the ThermWise campaigns mascot, Therm: The energy Wise Guy. Personified by a salt Lake city actor, Therm stars in numerous TV commercials, radio spots and advertisements at sporting events, and the character is a frequent guest on local television talk shows. During his appearances, Therm reminds consumers that if you conserve, you can save. (To view Therms ads, visit http://thermwise. com/mediafunstuff.html.) if your goal is to achieve savings, you want to cast a pretty wide net, says marisa OBrien, a senior project manager at Portland energy conservation inc.; Peci helps run some of the ThermWise programs. [What] stands out the most for me about the Questar program is all the brandingall the forethought that went into the ThermWise platform, upon which all of these programs are founded.

Questars commitment to saving energy and saving its customers money has required a corresponding commitment in dollars devoted to creating and implementing a comprehensive energy efficiency program. The grand total for the first three years: A $72.7 million investment is estimated to produce $192 million in energy savings over the long runand conserve 48 million decatherm.

The campaign has strived to ensure that locals who are thinking about energy efficiency will immediately think of Questars ThermWise as their information resource or as a tool to save money. The publicity campaign establishes Questar as looking out for the customers best interest. They can go to the company for tips, for lists of retailers where they can find energyefficient products, OBrien says.

Expanding the Program

Over the past three years, the ThermWise program has evolved. it has expanded from single-family appliance, home audit, single-family weatherization and a business rebate-style program, Gibbs explains. As it has matured, weve added a component of multi-family, and a new business program that offers rebates and incentives on more complex, non-standard types of measures like insulating all hot-water piping. Questar Gas will run the energy analysis on it. if it saves gas, and you can verify that, it will pay an incentive. The ThermWise campaign also has expanded its programs to include more training. A builders home is only as good as the work his subs are doing, says OBrien. so we try to reach out to all the people involved in the different industries. Therefore, plumbing and heating subcontractors, to name just two examples, have been added to Therms target audiences. in addition, the ThermWise team helps real estate agents understand what energy efficiency means and give guidance to consumers. OBrien notes that when somebody walks into a home
AmericAn GAs March 2010

Questars Therm: The Energy Wise Guy has helped to inspire about 100,000 residential customers to take advantage of energyefficient appliances and other initiatives during the past three years.

PHOTO COURTESY OF QUESTAR GAS CO.

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to be the beSt

that is energy star qualified you want the real estate agent to say, Heres what that means. Here are the benefits youll enjoy. You want them engaged so that they understand these homes can

command a premium if they are priced higher. We want them to educate the homeowner on all the lifestyle benefits and energy benefits of that home.

Everyone on Board

Next Month in American Gas

Full Speed Ahead?

The very latest on natural gas vehicles

Strategies and technologies that will improve productivity while pleasing customers

Call Centers

Control room management

What the new rule means for utilities

not only are Questar Gas co.s customers happy with the program and its results for their wallets, state regulators also appear to be pleased with the results. Barrie mcKay, Questars general manager of state regulatory affairs, says state regulators have been involved in every step. i think theyve been pleased with how professionally we have encouraged energy efficiency, mcKay says. We are as committed to designing and implementing good programs as we are to reviewing them and seeing what the impact is. Questar, with regulator support, has commissioned an outside third party to review and analyze the impact of the ThermWise programs. The results are due in the spring.

We anticipate well make adjustments once we get that feedback, mcKay says. But all indications right now are the dollars were spending and the participation are wise and prudent investments. it helps, too, he said, that ThermWise has been embraced by the construction industry. That means the advertising and marketing efforts have worked. mcKay says that ThermWise has had solid support from Questar Gas executives and employees, the Utah Public service commission and outside contractors. But, he adds, the most important factor in an energy efficiency programs success is the attitude with which its approached. Gusto is paramount. We went all-in, mcKay says. A lot of people dabble. its like going to the swimming hole and touching your toe in to see how cold the water is. instead, we took a couple of steps back then ran forward and jumped in.
www.thermwise.com

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March 2010

AmericAn GAs

avings

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It All Computes
UtIlItIes shAre theIr top It strAtegIes
The world of informaTion Technology changes so rapidly ThaT deciding which Tools offer The besT upgrade relaTive To Their price Tags is a challenge for everyone, even The experTs. consequenTly, uTiliTy iT Teams are consTanTly assessing The laTesT advances in Their quesT To apply Technology To improve corporaTe efficiency and lower cosTs, wheTher iT involves meTer reading, mapping, dispaTch or cusTomer service, or simply Taking a page from The inTerneT To enhance collaboraTion among employees.

Going on Autopilot
First there were meter readers on foot. next came Amr, or automated meter reading, which put meter readers behind the wheel with a device that collects meter data as they drive by. now the utility industry has a third option Ami, or advanced metering infrastructure. Ami involves attaching radio transmitters to existing gas meters. A data-collector, mounted on a tower or utility pole, picks up the transmissions and sends the meter readings to the utilitys billing database. Atmos energy corp. and Pacific Gas and electric co. (PG&e) are in the process of moving from on-foot meter readers to Ami technology throughout their service territories. Were finding that Ami provides highly accurate meter readings and also permits us to transfer gas service accounts from one customer to another from the office, says rich Gius, Atmos energy vice president and chief information officer (ciO), energy and utilities, and chair of AGAs Technology Advisory council. The terrain affects the range of each datacollection unit. Atmos energy has found that
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march 2010 AmericAn GAs

the antenna attached to its data-collection terminals can pick up meter transmissions from as far away as five miles, according to David Anglin, the utilitys director of regulated operations. in hilly san Francisco, some individual PG&e data-collectors can pull in data from thousands of meters, while others can gather data from just 10 or 12, according to Patricia Lawicki, PG&e senior vice president and ciO, gas and electric. We have overlapping, so if one collector doesnt pick up the transmission from the meter, the other one will, she says. PG&es data collectors are attached to a combination of leased tower space and PG&e-owned towers and utility poles, while Atmos energy predominately uses leased tower space because it owns few towers. Youd be amazed at how many towers are out there on which you can lease space, says Anglin. We had an aha moment when it came to rural areas. While some of the smallest towns we serve dont have cell phone coverage, they still have pager service. even if that service has been abandoned, the infrastructure remains in place because other entities, such as radio stations, are using the towers.

By Karen Ryan

Both utilities collect gas meter readings several times a day. PG&Es AMI-equipped customers may go online to see their cumulative daily gas consumption, and Atmos Energy is about to launch the same service. Lawicki notes that online access to daily usage totals has proved especially useful for customers, given the rebate options that the utility offers for conserving energy. For example, she explains, PG&Es Winter Gas Savings rebate program rewards customers for conserving natural gas during January and February by providing them with up to a 20 percent rebate on their bills. Its important, therefore, that gas customers know their daily consumption levels because our rebate is pegged to the amount by which a customer cuts usage from one January-February period to the next. According to both utilities, AMI makes life in the call center easier. When a customer calls about a high gas bill, our agent can look up the daily consumption figures and ask the customer about activities on particular days that might have increased gas use. Perhaps the customer had weekend guests or turned on the pool heater, says Anglin. Obviously, switching to AMI makes meter readers obsolete. Both utilities offer these employees the opportunity to be trained and certified for other company jobs.

Up Close and Personal

In the Detroit metropolitan area, where unemployment is especially acute, many natural gas customers are struggling to pay their utility

bills. In response, DTE Energy launched Detroit Recovery in January 2009, which involves the utilitys community outreach agents going door-to-door in pre-selected neighborhoods to find people who need utility bill payment assistance, reports Lynne Ellyn, DTE Energy senior vice president and CIO. The agents are equipped with laptops and wireless connections to the utilityor what DTE Energys IT team fondly calls Outreach in a Boxto help customers arrange bill payment plans and make appointments with fuel-aid organizations. This program has been very well received, says Guy Harris, DTE Energy director of enterprise performance management. The mobile technology permits our employees to engage proactively with customers in their living rooms or kitchens. Talking with customers in an environment in which they are most comfortable leads to a more cooperative interaction than Photo courtesy of Pacific Gas and electric co. might otherwise occur in a customer Gas meters throughout service office. He reports that customer Pacific Gas and Electric Co.s service territory are satisfaction scores following an in-home visit being equipped with deare 20 percent higher than scores following an vices that automatically send readings several interaction through traditional channels. day to the The Outreach in a Box idea sprang from com- times a database. utilitys central munity events DTE Energy holds at schools, churches and the like. There, company representatives, using a computer network set up by the utilitys IT team, meet with customers to help them avoid gas shutoffs and to put them in touch with low-income assistance organizaAMERICAn GAS march 2010

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numerous other risk factors, well be able to identify the level of risk for each segment. One lesson Atmos energy learned during the Gis projects early days was the importance of involving the workforce from the very beginning by communicating frequently and consistently, mcAhren says. During our initial Gis pilot projects, we were so focused on implementation details that this may have produced misunPhoto courtesy of Dte energy derstandings throughout the company More than 10,000 DTE Energy about whether the Gis system was customers met individually with the utilitys customer service repreworking and going to be rolled out sentatives (in the yellow shirts) at enterprise-wide and how this would a community outreach event held at the Michigan state fair last fall. affect peoples jobs, he notes. Larry Harris, an Atmos Energy meanwhile at DTe energy, the utilCorp. technician, programs the itys operations performance center radio transmitter that is part of the advanced metering infrastructure now includes plasma screens and dual being installed to send gas meter monitors so that each dispatcher can readings to the utilitys billing database. run multiple applications simultanePhoto courtesy of Joe Mark horn, atMos energy corP. ously. The centers increased technological sophistication means that dispatchers can tions. At one such event, held Oct. 6 at michipredict, plan and monitor field crew workloads in gans state fair, more than 10,000 utility customa more dynamic way than in the past, says ellyn. ers were given direct assistance. We started in The system takes into account variables such the early morning and didnt finish until the last as weather, historical emergency levels, whos at customer was seen at 1 a.m., says ellyn. This work on a particular day, whos on vacation and wouldnt have been possible without the iT capaso on. This means someone in the center knows bilities that were at the agents fingertips. where everyone is, what theyre doing and how long it might take.

Streamlining Operations Management

Atmos energy recently launched an enterprisewide geospatial information system (Gis) to map its entire pipeline system, which is spread across 12 states. Dave mcAhren, Atmos energy iT solutions manager, explains: All field work will be coordinated through our work management system and overlaid with the Gis to connect work orders to the electronic maps. Well also be able to route field technicians to work sites using a Global Positioning system that connects to our time-keeping system, making time management automated as well. From an efficiency standpoint, well know where all our field workers are and what they are doing at any given time. The information from Atmos energys compliance and mapping systems also is the foundation of a new risk analysis tool. Thanks to Gis technology, says mcAhren, well be able to link all our gas assets together for a broad view of our risk profile. Based on what the maps tell us about population density, types of buildings in an area, the location of railroad and river crossings, and
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march 2010 AmericAn GAs

Adopting Internet Tools

The pace of technological advances has progressed to the point that people may have more up-to-date tools on their home computers than they have on their office computers, says Gius. so were taking some of the internets best ideas and applying them to a business setting. As the Who song asks, Who Are You? For Atmos energy employees, the answer is online at Atmos energy People. This corporate intranet tool brings up the companys organizational charts, complete with photos of all employees, their titles, work and e-mail addresses, and telephone and cell numbers. You may search for someone by the city in which he or she works or by a full or partial name, explains Gius, adding that an employee survey shows that this tool is a big hit. in the past, finding the PowerPoint an Atmos energy executive used at a conference several years ago could require four or five phone calls. soon, our employees will be able to search

electronically for corporate documents housed in public folders on the corporate intranet and web site, says Gius, because we are installing a small hardware device from Google that applies its Web indexing technology to the corporate setting. The tool updates the search index each night. On the call center side, Atmos energy agents serve natural gas consumers in a dozen states and the correct answer to a query may depend on the regulatory rules of a particular state. To aid the agents, the utilitys iT team created Atmos energy customer Answers, an online reference tool based on Wikipedia technology. The site provides the information an agent needs to answer all types of questions, from how to set up a new customer in colorado to how to find fuel-aid resources in missouri, Gius explains. The search engine brings up the pertinent documents, along with the hit rates and level of confidence in the informations accuracy. At the moment, Atmos energy is testing the real-time discussion board concept by using instant messaging conference room technology. This permits employees to pose or answer questions about business-related issues in their fields. Weve been emboldened by this pilot programs success, and i think were about to deploy this technology company-wide, says Gius. conference rooms will be set up by topic, and employees will be admitted if they have a valid reason to be there.

Creating a Customer-Friendly Web Site

Last august, Avista Utilities completely new web site, launched in

January 2008, was named North Americas top-ranked natural gas and electric utility web site, based on a nationwide utility industry benchmarking study, according to Dana Anderson, the utilitys director of marketing and service development. The site was recognized for its depth of content and the user-friendly online transactional options for such things as paying utility bills, changing contact information and opening a utility service account. Our goal was to create a web site that would reduce through attrition over a years time the equivalent of six full-time call center positions, says Anderson. Weve realized our goal and an annual savings of $391,000 because about 10 percent of our customers now are doing business online rather than over the phone. Anderson offers some advice on redoing a web site, a project that took Avista Utilities two years and included running tests with randomly selected customers. Look for a firm that has both programming and graphic design capabilities, she says. Sometimes a company uses one firm for graphic design and then a second firm to build the web site. If the designer created pages with large art files that load slowly, this puts the programmer in a bind because now its too late to change the design. www.avistautilities.com

Detecting Hidden Patterns

DTe energy has been making real advances in its forecasting and trend-spotting enterprise business analytics, ellyn reports. We use very advanced mathematical models and some pretty exotic technology to better understand whats going on by applying such techniques as nearest neighbor pattern matching, which comes from the world of artificial intelligence. Basically, by overlaying different sets of data, youre able to detect patterns you wouldnt have identified by analyzing a single data set, she says. Take meter tampering, for example. By applying advanced analytics, explains ellyn, youll find that people who engage in fraud tend to be connected in some way to other people who engage in fraud. By mapping customer behavior in certain ways, you might find a cluster of fraud that you otherwise would have missed by looking at linear data only. Originally, DTe energy used a business analytics vendor, but later decided to bring the an-

alytics modeling in-house to save money and to give us the freedom to adapt the models ourselves to reflect changes in the context of our specific business, says ellyn. This move can be quite complicated, however, if a company doesnt have the appropriate staff, technology and insight, according to ellyn. You need people who have the quantitative background, such as a Ph.D. in mathematics or pretty deep training in artificial intelligence, to do the level of analytics that were doing in-house. i firmly believe its worth hiring people with these types of credentials because you lose your knowledge about and control over the data when you use a vendor. if your business is never going to change, an outside vendor might be a good idea. But if youre in a dynamic, rapidly changing business like ours, it becomes more difficult to do this type of analytics through a third party. Just as time marches on, so do advances in information technology. its a sure bet that over the next year, utility iT teams will be putting even more ideas into practice as they continue their pursuit of ways to enhance corporate efficiency and reduce expenses. stay connected.
KAREN RYAN is a contributing editor to American Gas.
AmericAn GAs march 2010

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From to

Variable
The new economics of producing natural gas from shale, Canadian imports and LNG combined with smart energy policy could calm pricing.
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march 2010 AmericAn GAs

By Mike Pomorski

Over the past year and a half, your answer would vary dramatically. On July 3, 2008, you could have bought 1 million British thermal units (MMBtu) of natural gas at the benchmark Henry Hub in Louisiana. Just 14 months later, that same $13.32 would purchase more than seven times that amountequal to an 86 percent discountsimilar to paying 46 cents for a gallon of milk that was $3.29 last year, or buying a $300,000 home for $42,342. By January 2010, $13.32 would buy less than 2 MMBtu of gas. What is going on here? Some of the breathtaking price decline from July 2008 to September 2009 can be attributed to the recession that began in December 2007 and unleashed its full force in mid-2008, but the fact remains that natural gas prices show wide volatility, both on a seasonal basis and in ways that feel much more random. The wide price swings from early to mid-2008 and from mid- to late 2009 were large from a historical perspective, but they were not unusual compared with typical price patterns.

How much natural gas could you buy with $13.32

A Volatile Situation
According to Merriam-Webster, the definition of volatile as it relates to markets is characterized by or subject to rapid or unexpected change. But another definition, tending to erupt into violence, provides some insight about the impact of volatility on natural gas markets. When prices swing upward, utilities feel the fury of the customers to whom they pass on those prices, and utilities start having uncomfortable conversations with their regulators, local editorial boards and other community stakeholders. When prices swing downward, administration of efficiency programs becomes more difficult as customers crank up the thermostats and producers go out of business or cut production, setting the stage for the next upswing. From the natural gas distributor perspective, volatility also makes natural gas less marketable for direct-use and electric power purposes. As for customers, even though they are partially shielded from spot prices by utility hedging activities, they tend to be less interested in relying on a product whose operating

costs might vary dramatically over relatively short periods of time. In sum, almost all natural gas stakeholdersincluding producers, transporters, distributors, electricity generators, and individual homes and businesses have an interest in natural gas prices being less volatile. Natural gas prices are volatile mostly due to simple supply and demand. All commodities are subject to some level of volatility, as commodity demand tends to move up and down faster than commodity production. For example, if the price of widgets is high, everyone will start producing widgets, leading to price declines once all that new widget capacity comes online in, say, six months. The resulting price decrease will make it less profitable to make widgets, so production will decline, leading to higher prices again. The cycle then repeats, and it can be exacerbated by short-term demand factors (like new widget-using machines or, more to the point, cold weather in the natural gas markets). Some argue that natural gas prices are volatile because financial speculators have the incentive and the ability to move prices accordAMerIcAN GAS march 2010

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ing to their nefarious, profit-seeking whims. While there may be some truth to this theory, and it remains an important area of discussion and research, speculation is probably more of a volatility magnifier than an underlying cause, so we will focus on supply and demand. natural gas markets behave much like our fictional widget market because there is a time lag between the decision to produce and the resulting production. in natural gas, the traditional predictor of future production is the north American rotary rig count, published each week by Baker Hughes inc. As theory would suggest, the gas rig count declined by more than 57 percent from July 2008 to July

2009, but it has since started to increase, in part following price movements. since time lags between when someone decides to start producing and when production actually occurs, markets tend toward volatility.

New Supplies Could Bring More Stability

Fortunately, several recent developments in the natural gas market suggest that the volatility, especially the upward volatility that characterized the market in the last several years, may lessen in intensity. certainly, some price movement is inevitable, but several factors provide reason for optimism. They are the economics of producing natural gas from shale, canadian imports and liquefied natural gas (LnG).
Shale. Unsurprisingly, the most significant development that may help limit natural gas price volatility is the most significant recent development in natural gas, which is the production of natural gas from shales using hydraulic fracturing stimulation methods. in mid-2009, the Potential Gas committee announced it had identified the largest amount of natural gas resources in the United states in its 44-year history of such studies, and the committee pointed explicitly to shale plays nationwide as part of the explanation for such a large resource base. The energy information Administration, in its Annual Energy Outlook 2010 reference case, projects that shale production will increase by almost 155 percent between 2009 and 2035. it is not difficult to locate articles and conference sessions that liberally combine the phrase unconventional gas with the word revolution. The resource and potential of shale to remake gas economics is enormous. shale can limit volatility in several ways. shale, like any other natural gas source, conventional or otherwise, increases the size and diversity of supply sources. With all else being equal, more supply means less upward fluctuation in pricegood news for volatility. But shale puts a lid on volatility not just because of the quantity available, but also because of how the resource is produced and where it is located. You will often hear the oil- and gas-producing industry referred to as

What Is Hydraulic Fracturing?

In the hydraulic fracturing, or fracking process, water (lots), sand (some) and chemicals (few) are pumped under high pressure into a reservoir of natural gas trapped in shale rock, typically miles below both the surface and aquifer. The pressure of the water mixture fractures, or breaks up, the shale, providing a pathway for the gas to flow into the well and up to the surface. When combined with drilling techniques in which a well goes down for miles and then turns horizontally into the shale bed, fracking can significantly lower the cost of producing what would otherwise be an un-producible resource. Fracking, like virtually all energy-related processes, uses water. About 2 to 4 million gallons are used per well, depending on the particular geology involved. Frackings environmental challenges include obtaining that water, its passage while in the well through the aquifer and the disposal of water that returns to the surface. All of these challenges are manageable; in fact, they have been successfully managed for decades. The process is engineered to prevent and mitigate any harmful impacts to our water resources. Without hydraulic fracture, the huge volume of natural gas locked in shale below America might as well be on the moon, denying us a resource that can support our energy independence efforts, lower the costs of carbon compliance and limit natural gas price volatility. Fracking is a tool that makes production of the resource economicaland available at a price people are willing to pay.M.P.

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e&P, with the e referring to exploration for the resource and the P referencing production of the resource. e&P refers to the two fundamental components of cost and risk in natural gas production; the cost and risk of locating the gas, and the cost and risk of extracting the gas from the ground. shale gas production, while still an e&P activity, is less subject to these costs and risks than more traditional production methods. many shale resources are actually geologic formations that are above or below more traditional gas fields, so there is already widespread knowledge about the location of the gas, which helps lower exploration risk. natural gas producers also are becoming more familiar and experienced with unconventional completion techniques, like hydraulic fracturing, that reduce production risk and decrease the amount of time between the decision to start or increase production and the time that natural gas actually starts flowing out of the well. Lower exploration risk and lower production risk support lower price volatility. in many ways, shale production is more like traditional manufacturing than traditional e&P. A gas producer that knows where the resource is located and exactly how much it will cost to produce can lower risk and ramp up and down production much more quickly in response to price signals than was possible in the past. since a timing mismatch between demand and supply is a major culprit with respect to volatility (recall the widget example), the shale production process provides more good news for limiting volatility in the future. The geography of shale also helps from a volatility-limiting standpoint since much shale is located near centers of high demand and away from areas that can experience major supply disruptions. consider the marcellus shale, principally located in new York, Pennsylvania and West Virginia. The northeast and Great Lakes regions are important centers for home heating and gas-generated electric power demand, so robust production in the marcellus can help reduce transportation costs and further limit volatility. For an example of how transportation can impact volatility, consider your commute time to work, which will tend to be more variable if you sit in your car for an hour than if you work from home. shale also can limit volatility because of

where it is not located: in the Gulf of mexico, an area subject to yearly hurricane-induced supply disruptions. major shale plays include the marcellus in the eastern United states, Fayetteville in northern Arkansas, Haynesville in northern Louisiana, Barnett in the Fort Worth area of Texas and, to some extent, in the intermountain West. This is not to suggest that Gulf production is bad or unreliable, but it is undeniable that a more geographically diverse supply base will lessen the impact of a supply disruption in any one area. in fact, as was proven in January 2010, shale production can be subject to well freeze-offs during brutal cold spells just as any onshore productive capacity can, which in some ways parallels the risk to production from hurricanes in the Gulf of mexico and once again emphasizes the importance of geographic diversity Shale puts a lid on in natural gas production.
Imports from Canada and LnG. December 2009 and January

2010 were extremely chilly, and one of the big stories in the natural gas industry was about how that cold snap affected natural gas demand and prices. Weather-led demand increases, coupled with the freeze-in of some production assets and resulting supply declines, led to normal increases in natural gas prices. Although much attention was devoted to the increase in price from the fall of 2009 to December/January, another, perhaps more interesting question is: Why did prices not increase faster and further given exploding demand and falling supply? in other words, why were prices not more upwardly volatile? imports from canada via pipeline and from the rest of the world via LnG may be one reason why the United states did not see significantly higher prices in late 2009 and very early 2010. According to BenTeK energy, a key source of market data for natural gas fundamentals, imports from canada in early January 2010 surged to above 10 billion cubic feet per day (Bcf/d), the highest level in years, and sendout from LnG terminals increased to 4.4 Bcf/d, also a recent record. canadian imports in early January were significantly higher than what they were in september 2009 when prices hit historical lows, and LnG imports were more than four times higher in

volatility not just because of the quantity available, but also because of how the resource is produced and where it is located.

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LIVE

The Future of LNG

LNG (liquefied natural gas) was a marginal source of natural gas supply in the United States during 2009, generally averaging 1 to 2 British thermal units per day (Bcf/d). Domestic import capacity (about 13.5 Bcf/d) far exceeds current import levels. Utilization of that capacity ultimately depends on U.S. natural gas demand, pricing relationships such as that existing between the Henry Hub (United States) and the National Balancing Point (United Kingdom), as well as numerous other world market conditions that influence the flow of LNG to consuming destinations in Europe, Asia, South America and North America. Whether or not domestic LNG is more fully used depends on many factors. Global LNG liquefaction (supply) capacity is expected to reach 950 Bcf per month by March 2010. With so much unused import capacity in the United States, which has the largest underground storage system in the world, analysts often point to North America as a potential place of last resort for LNG suppliers. However, that dumping ground scenario has not materialized in recent years since requirements for LNG in Asian and European markets have absorbed available supplies for a variety of reasons and often at higher selling prices than could have been obtained at Henry Hub. M.P.

early 2010 than in the fall of 2009. Overall demand for natural gas during the coldest periods of January 2010 was around 110 Bcf/d, so the canadian import and LnG sources were not large on a percentage basis, but they were very large from the perspective of the supply on the margin, and marginal supply drives volatility. imports from canada and LnG both exhibited an ability to ramp up quickly as a supply source, which is critical to limiting upside volatility. canadian export capacity, which was underused in the summer, stood ready to transport gas to the United states in the winter when it was needed. Underused LnG capacity served the same function. The fact that the United states had the ability to quickly import and deliver more LnG meant that the price impact of cold-induced demand, coupled with frozen-in domestic supply sources, did not lead to wildly expensive natural gas. The experience of increased canadian and LnG imports early this year is additional powerful evidence of why supply diversity is so important.

Energy Policy Will Be Key

To be sure, volatility can be limited by other factors, such as robust and expanding underground storage of natural gas and a rapidly expanding domestic transportation infrastructure, which connects gas from where it is produced to where it is needed. it is difficult to exactly measure the impact these or any other factors have had on volatility. nonetheless, a survey of the supply landscape for natural gas shows many features that tend to limit volatility and few, if any, that suggest volatility will worsen. But there is a catch. supply from shale, our gas-producing neighbors to the north and our LnG trading partners (led in 2008 by Trinidad, egypt, norway and now including Qatar) can continue to help the United states manage natural gas price volatility

only if policymakers and other key decision makers continue to support their environmentally responsible development and use. Policymakers should continue to support broadbased supply diversity. With very few exceptions (all of them resolvable), the natural gas equipment that warms American homes and businesses and increasingly powers the American electricity generation fleet is indifferent to whether the gas it burns comes from conventional wells in the Gulf, hydraulically fractured wells in the marcellus, wells in western canada or LnG imports from Trinidad. support of supply diversity means supporting and working for the siting of new and expansion of existing LnG terminals, support of environmentally responsible access to shale gas resources, robust expansion of safe and clean unconventional gas production, and continued support for an even more integrated natural gas transportation infrastructure that can efficiently and inexpensively move gas from producing areas to load centers. When people think about the energy challenges that will face America over the next decades, they point to managing carbon emissions, weaning ourselves off of energy produced by nations that may wish us harm and meeting the increasing energy demand of an expanding population. But the question is not whether the United states will meet these challenges. The question is how much meeting those challenges will cost. natural gas is an exciting part of the energy solution because it can support our energy goals at a stable, fair, less volatile price, as long as policymakers and other stakeholders develop and implement policies that support the solution. it is an old story, but one that bears repeating, especially given so many factors that can help limit volatility today.
Mike PoMorski is an energy economist in AGAs Policy Analysis Group.

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U pd ates fr om IndU stry pr ov I d er s

news

vendor

A.Y. McDonald: Made in the U.S.A.

A.Y. mcDonald says it is the no. 1 name in gas distribution products and a big part of the reason is its 150+ year history of designing, manufacturing and servicing its products right here in the U.s.A. Valves and meter bars are designed by A.Y. mcDonald engineers at the companys headquarters in Dubuque, iowa. From there, products are machined and assembled at the companys manufacturing facility in Albia, iowa. Have a question about an A.Y. mcDonald product? call the 800number, and a product expert at the companys headquarters will help.
Details > 800/292-2737; sales@aymcdonald.com See ad on p. 43

NRI Offers Live Natural Gas Leak Repair Kits

BillingTree Provides inTegraTed PaymenT soluTions
BillingTree, a proven leader in on-demand payment processing, now provides integrated payment solutions for utility companies. a number of companies are finding ways to optimize their billing platforms to lower costs and avoid passing paper and postage expenses to their customers. utilities that have implemented e-mail billing into their paperless strategies are seeing a surge in electronic payments. BillingTree Collect has been implemented in many companies, allowing them to reduce clerical involvement, minimize FTe costs, increase payment revenue and offer a customer-preferred web option. BillingTree says its solutions are simple and effective.
Details > Chad Probst, 602/443-5915; cprobst@ mybillingtree.com; www.mybillingtree.com See ad on p. 11

in preparation for the new DimP regulations, most natural gas companies have stepped up efforts to find leaks in their distribution systems. With new detection technology, the number of active leaks discovered can overwhelm traditional repair operations. Leading utility companies have embraced new technology to respond to the thousands of minor leaks encountered in these surveys and quickly get them off the books. NRIs TridentSeal will immediately and permanently stop a 60-lb live gas leak. The kit includes a composite reinforcement wrap that encapsulates the finished repair, providing a permanent solution, nri reports.
Details > 561/683-6992; info@neptuneresearch.com See ad on p. 12

Vendor News shares the latest news from American Gas advertisers, companies that support your association. Information has been provided by the organizations featured, and no claims have been authenticated. 34
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Itron Introduces Gas Meter Module

The 100G Datalogging ERT module is the latest generation gas meter module for itrons industry-leading portfolio of radio frequencybased meter data collection solutions. The two-way 100G Datalogging erT module surpasses the initial 100G by storing up to 40 days of hourly data. This module brings additional value to mobile customers by enabling them to extract, via rF, the following data during monthly meter reading: move in/move out reads for a specific date Daily data for customer service and billing disputes monthly gas balancing reads Hourly data to facilitate load studies
Details > www.itron.com

GTI UPDaTes Gas CONTrOl aND DIMP TraINING

With final rules for both control room management (CrM) and distribution integrity management programs (DIMP) now in effect, GTI has updated its training programs to help natural gas companies comply. Gas Controller Training for Distribution and Transmission, May 1014 in Chicago, helps participants track and respond to abnormal operating conditions and coordinate impacts to system flow. By reviewing components of controller fatigueand steps to manage this phenomenoncontrollers and managers will create a safer working environment, GTI reports. The Distribution Integrity Management Program (DIMP) workshop, June 2125 in Chicago, consists of a one-day overview of the DIMP rule, followed by three days of in-depth examination of the rule and implementation procedures. Participants may attend Day 1 aloneideal for executives, officers and senior managersor the full workshop.
Details > www.gastechnology.org/training See ad on p. 41

KMC Offers Ball ValVes

KMC specializes in manufacturing premium quality ball valves for the natural gas transmission and distribution markets. KMC ball valves meet all requirements for aPI-6D and other global specifications. Using our advanced engineering and design capabilities, KMC manufactures ball valves from to 60 and from asMe 150 to 2500. KMC says the three consistent advantages of its products are premium quality, quick deliveries and competitive prices. KMC offers a standard five-year limited warranty. To ensure customer satisfaction in the North american markets, KMC opened its fifth global manufacturing facility in atlanta in 2009.
Details >

See ad on inside front cover

TDW Introduces Pig Passage Indicator

T.D. Williamson inc. (TDW) has provided innovative pipeline products and services for 90 years. The latest example: the patent-pending PIG-SIG NI pig passage indicator. requiring no line tapping or welding, this portable indicator is fully non-intrusive and provides consistently accurate bidirectional detection of pigs with permanent trip magnets or carbon steel brushes, according to the maker. Bright LeD lights signal pig passages, and the most recent 99 passages are retrievable using an LcD screen. The unit can be wired to communicate with a control room or data acquisition system, enabling remote monitoring.
Details > 918/447-5400; www.tdwilliamson.com, click on Pigging Products See ad on back cover

www.kmcatlanta.com See ad on p. 3

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news
Enduro offErs PiPElinE intEgrity sErvicE
Enduro Pipeline services inc.s complete pipeline integrity service uses the companys dfl multi-tools ability to acquire data from several sources simultaneously in one pass, allowing its analysts to compare and analyze each data set. the result: Analysts are able to more readily recognize all pipeline features, geometry and/or metal loss indications plus simultaneously evaluate for deformation, strain, profile and permeability variations. Enduros single-pivot sensors are able to record very low levels of deformation and metal loss with one tool and confirm these indications with the single-analysis PigProgii software program. Additional products and services include: pipeline cleaning pigs, pig tracking equipment and services, gPs surveys performed with mapping option and caliper/geometry services ddl.
Details > 800/752-1628, 918/446-1934; www.enduropls.com

vendor

See ad on p. 7

Insight Information Plans Shale Summit

Join the leading experts at the 9th Annual Gas Shales Summit June 23 in Texas. insight information expects this years event to be the

BT Brings Advances to CGIs

noting that it is a trusted name in gas detection for a quarter of a century, Bascom-Turner (BT) now offers the Gas-Explorer combustible gas indicator for customer service personnel. Using what BT says is radical improvement in catalytic combustion and the latest advances in nanotechnology, the explorer can detect as little as 20 ppm gas to 100 percent gas. Providing extensive data collection and optional cO and O2 sensors, the Gas-explorer offers cutting-edge technology that saves time and money, BT reports.
Details > 800/225-3298; www.bascomturner.com See ad on p. 23

gf cEntrAl PlAstics introducEs nEW HigH-PrEssurE PlAstic PiPing systEM

georg fischer central Plastics introduces the new Hyperplast highpressure PA11 pipe and fitting system for gas distribution/transmission. the system offers an integrated, fully fused, non-corrosive alternative to steel with all the benefits of PE, the company says. installation costs have been demonstrated to be at least 20 percent less than that of steel piping systems, with no requirements for future monitoring or inspection, gf central Plastics reports. the system is fully approved by the dot for gas applications up to 4 iPs at pressures up to 200 psig.
Details > 800/654-3872 See ad on p. 5

biggest ever. chaired by Peter Duncan, president and founder of microseismic inc., this event will address the realities of shale gas resources for today and tomorrow, current operating regulations and future trends, fracking, environmental dilemmas and challenges, and the goals and challenges of being successful in the new economic climate.
Details > www.insight info.com/gasshales See ad on p. 17

En EnginEEring offErs ProjEct ExPErtisE

En Engineering is an organization of experienced, industry-trained engineering and business professionals who have been designing, maintaining and operating distribution, transmission and pipeline systems for decades. the changing regulatory landscape has introduced acronyms such as iMP, diMP, icdA and EcdA. EnE professionals offer practices and guidance to assist the operator in adapting to this new operating environment. Whether it is an ili feasibility study, diMP plan development, compliance audit, internal corrosion evaluation or a full metallurgical evaluation of your pipes, EnE professionals have the knowledge and experience to guide you through the maze of regulations to achieve cost-effective yet comprehensive, solutiondriven results, the company reports.
Details > Phil Bottger, 630/353-4002; pbottger@enengineering.com; www.enengineering.com See ad on p. 15

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news
Heath Consultants Offers Leak Survey Instruments
Heath consultants DP-IR and RMLD recently received approvals for intrinsic safety. They can detect methane without false alarming on other hydrocarbon gases and greatly improve productivity and safety of gas surveys, the company reports. The DP-ir functions by using an infrared optical gas detection system intended to replace the current surveying equipment using traditional flame ionization with next-generation technology. The rmLD can detect leaks up to 100 feet away, allowing remote detection of hard-to-reach areas such as busy roadways, yards with large dogs, offshore platforms, plant and industrial inspections, compressor stations, pipe suspended under a bridge and more.
Details > 800/HEATH-US; www.heathus.com See ad on p. 37

vendor

OpvAnTEk OffErS DIMp SOfTwArE SOlUTIOnS

Opvantek Inc., a market leader in DIMp software solutions with its Optimain product Suite, maintains that the keys to efficient lDC operation in the face of a new regulatory environment are in system-wide risk assessment and optimized asset management. Opvantek delivers best-in-class software solutions that significantly enhance distribution integrity, reliability, safety and regulatory compliance while fully supporting your DIMp compliance initiatives, the company reports. Optimain DS risk analysis software will monitor more than 20 percent of domestic distribution mains (per 2008 DOT reports) by the end of 2010. Opvantek also provides implementation, integration and focused business process consulting services.
Details > www.opvantek.com See ad on this page

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ENERGY woRldNEt AdvANcEs oQ PRoGRAm EfficiENcY

ENERGY worldnet has been capitalizing on new technology solutions to bring efficiency to the energy industry for more than 15 years. Exclusive training tools like MOBILE OQ allow training and testing to occur anytime, anywhere. the company says its industry-leading application service provider (AsP) model and professional customer service team provide operators and contractors with access to a cost-effective training, testing and records management program. ENERGY worldnets PRo ii system is based on the industrys best practices and is tailored to fit each operators unique requirements. call for more information. we have solutions!
Details > Geoff isbell, 940/626-1941; sales@energyworldnet. com; www.energyworldnet.com See ad on p. 33

Badger Meter Offers Flexible, Integrated AMR/AMI Solutions

natural gas utilities and municipalities can now customize a mobile or fixed network Amr/Ami solution with the ORION and GALAXY systems from Badger meter. Together with industry-leading alliance partners, Badger meter offers integrated electric and gas strategies and complete turnkey services to manage both remote and on-site deployment. Badger meter reADcenTer software provides utilities and municipalities with a seamless migration path for data management based on their individual reading data needs to complete the billing process.
Details > 800/656-3837; www.badgermeter.com

See ad on inside back cover

GOVERNOR Line Pressure Regulator

CSA 6.22a-2005 ANSI Z21.80A2005 2 PSIG Inlet Class I for outlet pressures up to 14 W.C. Certied Positive Dead-End Lockup Integral Vent Limiter no vent line required, eliminates the need for vent piping when performing indoor installations

Local Codes and Regulations apply in installation

Tollfree: 888.618.8787 | Fax: 770.448.7312 | www.gasinside.com

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news
PIETRo FIoRENTINI oFFERS LINE PRESSuRE REGuLaToRS
Pietro Fiorentini offers the GOVERNOR line pressure regulators. CSa-approved to aNSI Z21 .80, the GoVERNoR is available for 2 psig inlet pressures and through 4 pipe sizes, the maker states . also available is the GoVERNoR with over Pressure Device for 5 psig inlet pressure and through 2 pipe sizes . The GoVERNoR design eliminates the need for vent piping when performing indoor installations (where allowed) . The GoVERNoRs higher capacities, large turndown and mounting in any position reduce your cost of installation, and the product is suitable for indoor or outdoor installation, reports Pietro Fiorentini .
details > 888/618-8787; www .gasinside .com See ad on p. 39

vendor

advertisers index
aGa Operations Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 aGa/eei Customer service Conference & exposition . . . . . . . . . . . . . . 22 a.Y. Mcdonald Mfg. Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Badger Meter inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover 3 Bascom-turner instruments inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 BillingTree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 CS Week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 dow Chemical Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 en engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Enduro Pipeline Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 ENERGY worldnet Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 FBR Investment Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Gas technology institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Georg Fischer Central Plastics LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Heath Consultants inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Holland engineering inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Insight Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 itron inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover 2 KMC atlanta inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 neptune research inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Opvantek inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Pietro Fiorentini . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 t.d. Williamson inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover 4
American Gas advertisers support your association. AGA members and associates are listed in boldface.

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places to be

For more meetings, visit

www.

.org

March
24 aGa/EEI Introduction to Energy Derivatives Workshop, Hyatt Phoenix, Phoenix. Joe Martin, 202/824-7255; jmartin@aga.org 25 aGa/EEI Energy Derivatives
Seminar, Hyatt Phoenix, Phoenix. Joe Martin, 202/824-7255; jmartin@aga.org

2021 aGa leadership council, AGA Headquarters, Washington D.C. Gary Gardner, 202/824-7270, ggardner@aga.org

1719 aGa Financial Forum,

The Breakers, Palm Beach, Fla. Liliana Fonnoll, 202/824-7021; lfonnoll@aga.org

JUly
1113 aGa legal Forum, Lake Geneva, Wis. Kevin Belford, 202/824-7070; kbelford@aga.org 1215 Gas piping Technology
committee Meeting, St. Louis, Mo. Paul Cabot, 202/824-7312; pcabot@aga.org

1920 aGa/EEI property

May
46 Building Energy codes
& Standards committee Meeting, Portland, Ore. Jim Ranfone, 202/824-7310; jranfone@aga.org

accounting & Depreciation Training Seminar, New Orleans. Doug Allen, 202/824-7261; dallen@aga.org

2426 Distribution Best practices program, Follow-Up conference, Webcast. Victoria Plotkin, 202/824-7335; vplotkin@aga.org

31 aGa FErc Manual Users

Forum, AGA Headquarters, Washington, D.C. Andrew Soto, 202/824-7215; asoto@aga.org

aUGUST
911 aGa accounting
principles committee Meeting, Brown Palace, Denver. Joe Martin, 202/824-7255; jmartin@aga.org

1011 aGa Operating Section

Spring committee Meetings, Hilton New Orleans Riverside, New Orleans. Kimberly Denbow, 202/824-7334; kdenbow@aga.org

aprIl
1114 aGa/EEI customer Service conference and Exposition and Executive Summit, Hilton Milwaukee and Midwest Conference Center, Milwaukee. Jim Linn, 202/824-7272; jlinn@aga.org

JUnE
1316 aGa/EEI Technology
advisory council (Tac) Spring Meeting in conjunction with EEI annual convention, Westin Diplomat, Hollywood, Fla. Jim Linn, 202/824-7272; jlinn@aga.org

912 aGa Gas rate course,

The Gleacher Center at the University of Chicago, Chicago. Cynthia Marple, 202/824-7228; cmarple@aga.org

1114 aGa Operations

conference, Hilton New Orleans Riverside, New Orleans. Kimberly Denbow, 202/824-7334; kdenbow@aga.org

1618 Distribution Best

practices program, Meterreading roundtable, Indianapolis. Nneka Assing, 202/824-7332; nassing@aga.org

1114 rates and regulatory Issues Seminar, The Omni San Diego Hotel, San Diego. Cynthia Marple, 202/824-7228; cmarple@ aga.org

1619 aGa/EEI accounting

Services committee Meeting, New Orleans. Doug Allen, 202/824-7261; dallen@aga.org

2730 aGa/EEI chief accounting leadership conference and aGa/EEI Internal auditing committee Meeting, Kingsmill Resort, Williamsburg, Va. Joe Martin, 202/824-7255; jmartin@aga.org

OThEr EvEnTS
GTI: Gas Distribution Operations, April 1923, The Avenue Hotel, Chicago. Susan Robertson, 847/768-0783; education@gastechnology.org; www.gastechnology.org/training GTI: Gas Technology Fundamentals, April 1923, The Avenue Hotel, Chicago. Colleen Wessel, 847/768-0565; education@gastechnology.org; www.gastechnology.org/training cS Week 2020, May 2428, Gaylord Opryland, Nashville, Tenn. www.csweek.org Mid-atlantic Gas Transmission & Distribution Operations Seminar and vendor Expo, June 34, Holiday Inn Harrisburg/Hershey, Grantville, Pa. Debra Kitner, 717/901-0609; dkitner@energypa.org; www.energypa.org Mid-america regulatory conference (Marc) annual Meeting, June 69, Westin Crown Center, Kansas City, Mo. 573/751-3233; sheryl. gregory@psc.mo.gov GTI: Distribution Integrity Management program (DIMp), June 2125, The Avenue Hotel, Chicago. Susan Robertson, 847/768-0783; education@gastechnology.org; www.gastechnology.org/training

Training and Certification Programs in

> Gas Distribution & Transmission > Marketing & End Use > LNG > Field Operations See our broad range of gas industry training at www.gastechnology.org/training.
Explore the possibilities. Contact GTI at education@gastechnology.org
march 2010 AmericAn GAs

41

marketplace
ServiceS | conSultantS | ProductS
to participate in Marketplace, contact Melissa Massey at 214/291-3664 or melissa@mohanna.com.

jOblINe

CAreer OppOrtunities

Listings may be posted on AGAs web site for 90 days and in one issue of American Gas. Rates: AGA member companies: $150 for up to 50 words, $1 per additional word; nonmembers: $250 for up to 50 words, $2 per additional word. All ads must be prepaid. Unless noted, the code following each listing ensures confidentiality and should be referenced in correspondence. To submit a listing to Jobline, please visit www.aga.org.

2010 AmericAn GAs Buyers Guide

American Gas magazines annual buyers guide will be published in the October issue.

entries must be received by july 30, 2010. Visit http://buyersguide.aga.org today.

tO adVertISe, contact Melissa Massey at 214/291-3664 or melissa@mohanna.com.

SUperVISOr, GaS SYStem OperatIONSOrganizes and supervises the work of field crews to ensure safe, efficient and effective performance. Develops and maintains scope, schedules and budgets for personnel, materials and other resources as required to ensure the timely completion of budgeted construction, operation and maintenance projects. Ensures that system operation, construction and maintenance activities comply with all federal, state and local regulations, and company standards. Responsible for the operational performance associated with the gas production facilities (LNG and LPGA) and with the gas pressure regulation facilities. This would include construction, maintenance, employee training as well as the operational readiness of these facilities, including compliance with all applicable regulatory and company requirements. Accountable for the regulatory compliance for all activities that fall within functional responsibility. Provide leadership, supervision, planning and scheduling of projects to ensure timely completion and within acceptable budgetary tolerances. Professionally interact with customers, regulatory authorities and employees to ensure the company satisfactorily meets their needs. The successful candidate will have an associate degree in engineering, related technical field or equivalent work experience and 810 years of progressively responsible experience, including proven supervisory/ management experience. Must have a complete understanding of CFR 192, CFR 193, NFPA 58/59 and NFPA 59A. Must accept supervisory standby on rotation basis, reside within a speci-

fied geographic area and be available for duties during times of system emergencies, maintain a valid commercial drivers license and possess Operator Qualification (OQ) certification based upon the requirements set forth in D.O.T. 49 CFR 192, Subpart N. We offer highly competitive salaries and outstanding benefits. Please send a rsum with salary requirements to: Unitil Service Corp., Attn: Human Resources Department, 6 Liberty Lane, W., Hampton, NH 03842. Fax: 603/773-6692. E-mail: human resources@unitil.com (If e-mailing, please send all attachments in Adobe Acrobat or Microsoft Word format.) No phone calls please. EOE/AA. MAR01 eNerGY eFFIcIeNcY cONSUltING SaleS pOSItIONSSouth Jersey Gas in Folsom, N.J. (located between Philadelphia and Atlantic City), has exciting opportunities in its newly revamped sales team for energy efficiency consulting experts. We currently are looking for the following team members: manager, commercial and industrial energy efficiency program implementation, manager, residential energy efficiency consulting, program manager, commercial and industrial energy efficiency. For complete job descriptions, compensation information and to submit an online application, please visit our web site: http://southjersey industries.appone.com. South Jersey Industries is an Equal Opportunity Employer that celebrates diversity in the workplace. Were not just a utility, were much moreand were proud of it! For more information on our company, please visit our web site: www. sjindustries.com. MAR02

42

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AmericAn GAs

NoTEWoRTHiES

Promotions | Honors | new Hires

man and CEO. In addition, Terry K. Spencer, COO of ONEOK Partners, was elected to the board of ONEOK Partners. Eugene Gene R. McGrath, former chairman and CEO of Consolidated Edison Inc., and Louis Lou DAmbrosio, former president and CEO of telecommunications giant Avaya, have been appointed to the Sensus board of directors.

AGA Expands Executives Roles

On Feb. 16, at the AGA board of directors meeting in Washington, D.C., AGA President and CEO David Parker announced that two AGA senior staff members are taking on new responsibilities. Paula Gant, VP, regulatory affairs, also will manage the Policy & Planning Group, developing and managing AGAs policy agenda, helping members identify and advocate for the business models and regulatory constructs needed to succeed today and in the future, and continuing to coordinate FERC, NARUC and other federal and state regulatory advocacy activities. Laura Sheehan, VP, communications and marketing, also will manage the Public Affairs Group, overseeing government and public affairs.

Ameren Corp. recently has received three honors: 1) The St. Louis Minority Business Council has awarded Ameren the 2009 Corporation of the Year Award, presented annually to the corporate member that best demonstrates a commitment to purchasing products and services from minority-owned businesses. 2) G.I. Jobs magazine has named Ameren a top 100 military-friendly employer. 3) Ameren was voted the best place to work by readers of the St. Louis PostDispatch in an online contest. The Chesapeake Utilities Corp. board of directors has promoted Joseph Cummiskey to VP. He will oversee Chesapeake unregulated energy operations, including Sharp Energy Inc., Xeron Inc. and Peninsula Energy Services Co. Inc. (PESCO). Addition-

ally, Cummiskey was named president of PESCO, the companys natural gas marketing subsidiary. William P. Barr and Robert H. Spilman Jr. have been elected to the Dominion board of directors. Barr formerly served as EVP and general counsel of Verizon Communications, and he was the 77th U.S. attorney general. Spilman is president and CEO of Bassett Furniture Industries Inc., a furniture manufacturer and distributor. The board of directors of ONEOK Inc. has elected ONEOK CEO John W. Gibson to the additional role of president. Separately, the board of directors of the general partner of ONEOK Partners LP has elected Gibson to the additional role of president of the partnership, where he currently serves as chair-

A.Y McDonald is the #1 Name in . Natural Gas Distribution Products...

...not just because we sell the most, but because we do so much!
Because we have the products you need, when you need them. Whether its a swivel or a meter bar, we have it in stock and we can ship it the same day. Its just one of the ways that we do things better, and one of the reasons were #1.

G A S VA LV E S | W AT E R W O R K S | P L U M B I N G VA LV E S

PUMPS

800.292.2737 | FAX 800.832.9296 | sales@aymcdonald.com | www.aymcdonald.com

march 2010 AmericAn GAs

43

facts on gas

For more statistics, visit

www.

.org

operating rigs
As of Jan. 29, 2010

gas oil

861 444

66% 34%

Total domestic natural gas production grows from 20.6 trillion cubic feet (Tcf) to 23.3 Tcf in 2035. With technology improvements and rising natural gas prices, natural gas production from shale grows to 6 Tcf in 2035, more than offsetting declines in conventional production.

national Heating-Degree Days

Weighted by gas home heating equipment

30-year normal for January January 2010 3.4% warmer than 09 0.7% colder than normal January 2009

991 998

1033

cHange in consumer price inDex

12 months ending December 2009 +0.1%

u.s. Housing starts

December 2009 December 2008 557,000 556,000

u.s. Working gas in unDergrounD storage (Bcf)

SOURCE: EnERgy InfORmatIOn admInIStRatIOnS AnnuAl EnErgy OutlOOk 2010 REfEREnCE CaSE

Weekly by region for period ending Jan. 22, 2010 Week 1/1 1/8 1/15 1/22 1/22/09

eastern consuming region

stanDarD & poors 500 aga stock inDex -3.60% -4.34% 1/1/101/29/10 1/1/101/29/10

1,678

1,532

1,401

1,334

1,231

Western consuming region

GAS uTIlITy INDEX FuND (GASFX)

23.92% 0.44% 6.89% 7.91% 1 year 3 years 5 years 10 years 1/1/0912/31/09 1/1/0712/31/09 1/1/0512/31/09 1/1/0012/31/09

434

414

396

380

355

proDucing region

1,006
total

906

810

807

815

Respecting Your Money.

Total annual operating expenses were 0.76%.

3,118

2,852

2,607

2,521

2,401

The performance data quoted is past performance, which is no guarantee of future results. The current performance may be lower or higher than performance data quoted. To obtain performance data current to the most recent month-end, please call 888.200.4710. Investment return and principal will fluctuate so that investors shares, when redeemed, may be worth more or less than their original cost. Investments are focused in the natural gas industry, which is sensitive to rising interest rates, weather and the wholesale pricing of alternative fuels. Investors should consider the investment objectives, risks, charges and expenses carefully before investing. This and other information about the fund can be found in the prospectus. Please call 888.200.4710 or visit fbrfunds.com to obtain a free prospectus. Read it carefully before investing. The FBR Funds are distributed by FBR Investment Services Inc. Member FINRA/SIPC.

44

march 2010

AmericAn GAs

 2010 Badger Meter, Inc.

Gas Measurement Solutions

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Flexibility are Flexibility in an toin an AMR/AMI solution is critical and we network pleased for your gas applications with Meter Meterthat pleased AMR/AMI solution is critical and we are offer that flexibility. transmitters offers systems to offer that flexibility. BadgerBadger offers network pleased to Meter offers network pleased to offerforoffer that flexibility. Badger offers network systems for yourthat flexibility. Badger Meter transmitters your gas applications with mountsystems to your gas meterswith transmitters that that directly gas applications and analytics software systems for your gas applications with transmitters that systems for your gas applications with transmitters thatsoftware mountmount directly gas meters and analytics software directly adapts to your needs. When you choose that seamlesslyto yourto your gas meters and analytics mountmount directly to your gas meters and analytics software directly adapts to yourto your When When analytics software that seamlesslyto your gas meters and product; youyou Badgerthat seamlessly adaptsbuying aneeds.you choosechoose Meter, you arent just needs. are that seamlessly to yourto your needs. When you that seamlessly adaptsadaptsbuyingbuying ayou choosechoose BadgerBadger Meter, you arentneeds. When product; you are Meter, you arent investing in a solution. just just a product; you are BadgerBadgersolution. just buyingbuying a product; you are Meter, Meter, you arent just a product; you are investing in a you arent investing in a solution. 800-656-3837 | www.badgermeter.com/gasad1.aspx investing in a solution. investing in a solution. | www.badgermeter.com/gasad1.aspx 800-656-3837 | www.badgermeter.com/gasad1.aspx 800-656-3837 800-656-3837 | www.badgermeter.com/gasad1.aspx 800-656-3837 | www.badgermeter.com/gasad1.aspx

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NORTH & SOUTH AMERICA: 918-447-5000 EUROPE/AFRICA/MIDDLE EAST: 32-67-28-36-11 NORTH & SOUTH AMERICA: 918-447-5000 | || EUROPE/AFRICA/MIDDLE EAST: 32-67-28-36-11 NORTH & SOUTH AMERICA: 918-447-5000 EUROPE/AFRICA/MIDDLE EAST: 32-67-28-36-11 ASIA/PACIFIC: 65-6364-8520 OFFSHORE SERVICES: 832-448-7200 ASIA/PACIFIC: 65-6364-8520 | || OFFSHORE SERVICES: 832-448-7200 ASIA/PACIFIC: 65-6364-8520 OFFSHORE SERVICES: 832-448-7200

Registered trademarks of T.D. Williamson, Inc. in the United States and in foreign countries. TM Trademarks of T.D. Williamson, Inc. in the United States and in foreign countries. TM Registered trademarks of T.D. of T.D. Williamson, the United United States foreignforeign countries. TM Trademarks of T.D. Williamson, the United United States and in foreign countries. Trademarks of T.D. Williamson, Inc. in Inc. in the States and in foreign countries. Registered trademarks Williamson, Inc. in Inc. in the States and in and in countries.