CenterPoint Energy 2015 Annual Report Download - page 17

pipelinesto beabletoenterinto long-term,firmcontracts withshipperswilling tomakethe commitmentswhichunderpin suchlarge capital investments.The
FERC’s solution has been to allow carriers to hold an “open season” prior to the in-service date of pipeline, during which time interested shippers can make
commitmentstotheproposedpipelineproject.Throughputcommitmentsfrominterestedshippersduringanopenseasoncanbeforfirmserviceorfornon-firm
service. Typically, such an open season is for a 30-day period, must be publicly announced, and culminates in interested parties entering into transportation
agreementswiththecarrier.UnderFERCprecedent,acarriertypicallymayreserveupto90%ofavailablecapacityfortheprovisionoffirmservicetoshippers
makingacommitment.Atleast10%ofcapacityordinarilyisreservedfor“walk-up”shippers.
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Midstream Investments – Safety and Health Regulation
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Certain of Enable’s facilities are subject to pipeline safety regulations. PHMSA regulates safety requirements in the design, construction, operation and
maintenance of jurisdictional natural gas and hazardous liquid pipeline facilities. All natural gas transmission facilities, such as Enable’s interstate natural gas
pipelines,aresubjecttoPHMSA’spipelinesafetyregulations,butnaturalgasgatheringpipelinesaresubjecttothepipelinesafetyregulationsonlytotheextent
theyareclassifiedasregulatedgatheringpipelines.Inaddition,severalNGLpipelinefacilitiesandcrudeoilpipelinefacilitiesareregulatedashazardousliquids
pipelines.Pursuantto various federalstatutes,includingthe Natural GasPipelineSafety Act of1968(NGPSA), theDOT,through PHMSA,regulatespipeline
safetyandintegrity.NGLandcrudeoilpipelinesaresubjecttoregulationbyPHMSAundertheHazardousLiquidPipelineSafetyActwhichrequiresPHMSAto
develop,prescribe,andenforceminimumfederalsafetystandardsforthetransportationofhazardousliquidsbypipeline,andcomparablestatestatuteswithrespect
todesign,installation,testing,construction,operation,replacementandmanagementofpipelinefacilities.PHMSAhasdevelopedregulationsthatrequirenatural
gas pipeline operators to implement integrity management programs, including more frequent inspections and othermeasures to ensure pipeline safety in high
consequence areas. Although many of Enable’s pipeline facilities fall within a class that is currently not subject to these integrity management requirements,
Enablemayincursignificantcostsandliabilitiesassociatedwithrepair,remediation,preventiveormitigatingmeasuresassociatedwithitsnon-exemptpipelines.
Additionally,shouldEnablefailtocomplywithDOTorcomparablestateregulations,itcouldbesubjecttopenaltiesandfines.IffutureDOTpipelineintegrity
managementregulationsweretorequirethatEnableexpanditsintegrity managementsprogramtocurrentlyunregulatedpipelines,including gatheringlines,its
costsassociatedwithcompliancemayhaveamaterialeffectonitsoperations.
ENVIRONMENTAL MATTERS
OuroperationsandtheoperationsofEnablearesubjecttostringentandcomplexlawsandregulationspertainingtotheenvironment.Asanowneroroperator
of natural gas pipelines, distribution systems and storage, electric transmission and distribution systems, and the facilities that support these systems, we must
complywiththeselawsandregulationsatthefederal,stateandlocallevels.Theselawsandregulationscanrestrictorimpactourbusinessactivitiesinmanyways,
suchas:
• restrictingthewaywecanhandleordisposeofwastes;
• limitingorprohibitingconstructionactivitiesinsensitiveareassuchaswetlands,coastalregionsorareasinhabitedbyendangeredspecies;
•requiringremedialactiontomitigateenvironmentalconditionscausedbyouroperationsorattributabletoformeroperations;
• enjoiningtheoperationsoffacilitieswithpermitsissuedpursuanttosuchenvironmentallawsandregulations;and
•impactingthedemandforourservicesbydirectlyorindirectlyaffectingtheuseorpriceofnaturalgas.
In order to comply with these requirements, we may need to spend substantial amounts and devote other resources from time to time to, among other
activities:
•constructoracquirenewfacilitiesandequipment;
• acquirepermitsforfacilityoperations;
• modify,upgradeorreplaceexistingandproposedequipment;and
• cleanordecommissionwastedisposalareas,fuelstorageandmanagementfacilitiesandotherlocationsandfacilities.
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