November 2016 No. 71 Vol. 11

Washington Watch

Water Pipe Funding Assured by Congress

Congress will approve new funding for “emergency” repair and construction of underground water pipes with unacceptably high lead content when it approves a Water Resources Development Act (WRDA) bill in either November or December.

But numerous questions remain about the new program established in response to such problems in Flint, MI. A House-Senate conference committee will have to reconcile a number of differences between two WRDA bills (S. 2848/H.R. 5303), including who administers the funds, how much money will be available, the ground rules on access to the new funds and perhaps most importantly, how much of the money will go to Flint.

There will be a minimum $170 million available and House sources say they expect at least $100 million of that to go to Flint. Flint isn’t mentioned by name in either the House or Senate bill. But one House staffer said the language in the House bill was written to apply only to Flint. The House bill says a city can qualify for the funds if it has been declared an emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act “as a result of the presence of chemical, physical or biological constituents, including lead or other contaminants in the eligible system, for the repair or replacement of public and private infrastructure.” Emergencies under the Stafford Act are declared for a wide range of disasters such as disease outbreaks, floods and hurricanes. Stafford Act eligibility requires a presidential emergency declaration and only Flint has received such action for lead contamination of water pipes. The Senate bill also refers to the need for an emergency designation.

One water industry lobbyist says Flint will be first in line to access the targeted federal funding. “Other cities that are facing lead-related challenges will be able to take advantage of the funds 18 months after Flint has access to the aid, if funds are still available.”
The House puts the Army Corps of Engineers in charge of dispensing the money. The WRDA legislation in both houses almost exclusively funds Corps projects involving harbors, waterways, dams and river/ocean related public works projects. The Senate bill, however, puts the Environmental Protection Agency, which administers the Safe Drinking Water Act, in charge and allots $220 million over five years, the same period as the House.

On the House floor, Rep. Dan Kildee (D-MI), who represents Flint, conducted a colloquy with Rep. Bill Shuster (R-PA) regarding the Flint provision. Kildee asked: “To my friend, Mr. Shuster, do I have your commitment to bridge the gap between my amendment and the Senate package so that the final bill we send to the President provides the much-needed relief to my constituents and the families of Flint?”
Shuster answered: “…I have committed to working together as we bridge the differences between the two chambers that these bills will ensure a mutually agreeable solution. I am committed to getting this vital infrastructure bill to the President’s desk.”

Soon after that House agreement was reached, the chairman and ranking Democrat on the Senate Environment and Public Works Committee, where that chamber’s WRDA bill was conceived, said, “The strong, bipartisan vote in the House of Representatives is a clear sign that we can reconcile the House and Senate bills swiftly and smoothly.” Sen. Jim Inhofe (R-OK) is chairman and Sen. Barbara Boxer (D-CA) is the top Democrat.

The House bill does not include a number of provisions that are in the Senate WRDA bill such as a new trust fund for water infrastructure, funded by fees collected for a voluntary labeling system, with the revenue to be divided equally between capitalization grants for the Clean Water and Drinking Water SRFs.

PHMSA fleshes out new emergency order

The new interim final rule (IFR) from the Pipeline and Hazardous Materials Safety Administration (PHMSA) gives that pipeline safety regulator wide latitude to penalize multiple gas and hazardous liquid pipelines at one time for perceived safety violations. Those violations would have to be serious enough to require PHMSA to issue an emergency order which can include restrictions, prohibitions and safety measures, without prior notice or an opportunity for a hearing.

One Washington attorney explained, “This is an extraordinary remedy to be used in extraordinary circumstances. My concern is that its use or misuse depends entirely on the judgment of PHMSA.”

An emergency order could come into play, according to the PHMSA, for example where:

  • A natural disaster affects many pipelines in a specific geographic region.
  • A serious flaw has been discovered in pipe, equipment manufacturing, or supplier materials.
  • An accident reveals a specific industry practice that is unsafe and needs immediate or temporary correction.

The IFR was issued in early October with a 60-day comment deadline. The agency says it can make changes to the final rule based on public comments.

The IFR is required by the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016 signed by President Obama on June 22, 2016. It requires PHMSA to publish a final rule on emergency orders within 270 days of the bill’s passage. That date is March 19, 2017.

The emergency order provision in the PIPES Act proved controversial as the bill moved through Congress. It augments PHMSA’s existing authority to issue corrective action orders (CAOs), notices of proposed safety orders and advisory bulletins, by allowing PHMSA to act quickly to address imminent safety hazards that exist across a subset or larger group of owners or operators. The Interstate Natural Gas Association of America (INGAA) was unhappy with early provisions of the amendment as the PIPES Act moved through Congress. A major concern was whether the industry would have access to judicial review of any emergency order. INGAA was more or less satisfied with the final provision.

But the language of the IFR leaves plenty of room for interpretation on that score. “INGAA has previously commented that strong due process considerations should be put in place with respect to the emergency order authority,” said INGAA Vice President Cathy Landry. “INGAA is reviewing the IFR language, and will solicit operators’ input in developing a response during the 60-day comment period.”
The PIPIES Act authorizes PHMSA to issue an emergency order if it determines that a violation, unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard.

An “imminent hazard” is defined as “the existence of a condition relating to a gas or hazardous liquid pipeline facility that presents a substantial likelihood that death, serious illness, severe personal injury or a substantial endangerment to health, property or the environment may occur before the reasonably foreseeable completion date of a formal proceeding begun to lessen the risk of such death, illness, injury or endangerment.”

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