Pennsylvania is laced with 11,000 miles of aging gas pipelines like the one implicated in the deadly Feb. 9 explosion in Allentown because legislators, regulators and gas companies haven't agreed on how to accelerate pipeline replacement -- a reform that Georgia, Ohio and other states figured out years ago.
Bills enabling utilities to charge a special fee to finance pipeline replacement have died repeatedly in Harrisburg, leaving companies such as UGI Corp. to follow their own plans to replace old pipe at a pace that will take decades to complete.
"In the case of Pennsylvania, there is a real question about the safety of gas lines mainly because there are a lot of very old, cast-iron and bare-steel pipe in the ground," said Rick Kessler, vice president of the watchdog safety group Pipeline Safety Trust. "Some utilities around the country have moved aggressively on replacing these types of older pipe, but in some areas, utilities are only replacing a very small percentage of these pipes each year."
Some Pennsylvania gas utilities have among the highest percentages of cast-iron pipe in the country. Among the 148 gas companies nationwide with at least 1,000 miles of pipeline, two of UGI's three divisions are in the top 20 percent for cast-iron pipe, according to the most recent federal records. UGI Utilities, which serves the Lehigh Valley, is 26th on the list with 400 miles -- 7.5 percent -- of its pipelines in cast-iron. PGW in Philadelphia tops the list with more than half of its pipelines in cast-iron.
Although regulators have been urging gas companies to replace cast-iron and bare-steel pipelines, UGI hasn't seen the need to speed up its replacement program, said Robert Beard, the company's vice president of marketing, rates and gas.
UGI has replaced 300 miles of lines since 1970 and at the current rate, will spend the next 40 years replacing old lines. UGI has funded its pipe-replacement program by adding customers and being choosy about which pipelines it digs up, not by seeking a rate increase.
"One of the reasons that UGI has been able to stay out of rate-case proceedings since  is that we have been good at being efficient and effective operators," Beard said. "Part of being good is identifying those pipe segments that are most in need of replacement and to not replace pipe segments that should not be replaced."
The cracked pipe that was dug up five days after the explosion at 13th and Allen streets was not at the top of the company's replacement priority list, Beard said. Tests to determine what role the pipe may have played in the blast that killed five people and led to the demolition of eight houses have not been completed.
UGI Corp., which made a profit of $261 million in 2010, spends $20 million a year upgrading its facilities, according to a company spokesman.
Sen. Lisa Boscola, D-Northampton, said she believes UGI and other gas companies should spend more.
"In the past, these pipes should have been replaced on a routine basis by UGI. They chose not to, and now, the consumers are going to have to pay for it. ... I don't want the full burden placed on the ratepayer, because that is just wrong," said Boscola, minority chairwoman of the Senate Consumer Affairs and Professional Licensure Committee.
In Georgia, it took gas wafting through the streets of the capital for the state to force gas companies to speed up the replacement process.
In the late 1990s, gas from leaking pipelines seeped to the street level in front of the state Public Service Commission offices in Atlanta. Commissioner Stan Wise said once regulators could smell the odor of gas, they knew it was time to force the local gas utility to move more quickly.
"I think what broke the camel's back was, we knew the gas was leaking and there were these test bores drilled up and down the sidewalk and through those test holes, you could smell the mercaptan," Wise said, referring to the gas additive that creates the odor.
The state's main gas utility, Atlanta Gas Light, was in the process of replacing more than 2,000 miles of old cast-iron and bare-steel pipeline with plastic and steel pipe, but at a snail's pace.
"We were on about an 80-year replacement program," said Rick Lonn, Atlanta Gas Light's director of regulatory compliance.
That didn't sit well with the commission and in 1997 it ordered the utility to replace 2,300 miles of old pipeline in 10 years. To finance the work, it allowed Atlanta Gas Light to assess a charge that now is up to $1.95 a month for residential customers. Regulators pushed back the deadline for completion to 2013 as they added more pipeline to the replacement program. Lonn said that was no problem -- all of its cast-iron lines have been replaced and in two years, the last of the bare-steel pipes will be gone, too.
By the deadline, Atlanta Gas Light will have replaced an average of 180 miles a year for 15 years.
"I got to give a lot of credit to the commission," he added. "They didn't need an incident to drive them there."
But the commission did need political courage, Wise said.
Unlike in Pennsylvania, where PUC members are appointed by the governor, public utility commissioners are elected in Georgia. As they faced reelection, Wise said, they had to weigh whether to leave potentially dangerous old pipe in the ground or ask gas customers to pay more.
"We took a butt-whipping in the press and from some citizens who felt they shouldn't have to pay for it," he said. "It just takes someone who is willing to risk his office."
Nineteen states allow utilities to charge fees or surcharges to pay for infrastructure improvements, according to the American Gas Association. Some states have a cap on how much utilities can recover, and others allow the fees to be used toward the cost of installing new pipeline, said the association's Jennifer O'Shea.
Four major utilities in Ohio in recent years worked out plans to assess extra charges for pipeline replacement, said Matt Butler of the Ohio Public Utilities Commission.
Duke Energy Ohio, for instance, has spent hundreds of millions of dollars since 2002 upgrading its lines, including service lines leading to customers' homes. It will be allowed to roll the fees into customers' base rates when it goes before the commission for a new rate case, Butler added.
In the latest incarnation of Pennsylvania's attempt to replace aging pipelines, state Rep. Robert W. Godshall, R-Montgomery, has proposed a surcharge to natural gas customers. With the House under new Republican leadership and the memory of fatal explosions in Philadelphia -- where a PGW worker was killed on Jan. 18 -- and Allentown still fresh, he's optimistic it will pass.
"I do think -- with the unfortunate situations we have had in Allentown and Philadelphia -- it shows the need that we have to go forward and do something," said Godshall, chairman of the House Consumer Affairs Committee.
Godshall said he's working with a state energy industry association to broaden the legislation to help sewer and electric companies replace their older infrastructure, too. Water companies already are permitted to assess a surcharge for pipeline replacement.
The PUC -- which has the dual roles of supporting a stable market for gas companies and keeping rates low for consumers -- also favors a distribution charge. PUC Chairman Robert F. Powelson testified at a state House Consumer Affairs Committee hearing earlier this month that it would save construction costs in the long run and give utilities the flexibility to install safety upgrades without a lengthy rate approval.
But Sen. Tommy Tomlinson, R-Bucks, chairman of the Senate Consumer Affairs and Licensing Committee, said history shows that passage isn't assured.
"There are people out there who are not going to be in favor of the [surcharge] and we have faced that political opposition in the past," Tomlinson said.
They include Pennsylvania Consumer Advocate Sonny Popowski and state Rep. Phyllis Mundy, D-Luzerne, who said that if companies like UGI want more money for infrastructure, they should make their case for a rate hike before the PUC. The commission has a nine-month process for utilities to raise rates. During that time, the PUC considers the utility's costs and revenues and whether higher charges are needed.
"What the gas companies want is an automatic rate increase" without having to make the financial case for it, Mundy said.
UGI hasn't filed a request for a rate increase since 1995.
With natural gas prices dropping and gas utilities adding customers, now would be the perfect time to invest in infrastructure improvements either through dedicated rate increases or a fixed replacement fee, said Kessler, of the Pipeline Safety Trust.
"It makes sense to start now and make investments, particularly as the price of gas drops and more and more people start to use gas. You've got this great delta you can take advantage of," Kessler said. "You won't have as much of a decrease but you are putting more money into the program."
Regardless of natural gas prices, new lines would remove the threat of brittle old lines leaking gas and causing deadly explosions.
Wise, the public utility commissioner from Georgia, said the political pain and economic hit that his state went through were worth the trouble.
"Here we are at the end of that program," he said, "and boy, don't we look like geniuses today?"