EVALUATION OF 12-INCH POLYETHYLENE PIPE

FOR CINERGY GAS DISTRIBUTION

Prepared by:

Christopher W. Ampfer, P.E.

Staff Engineer

Cinergy Corp. - Gas Engineering Department

March 2004

ii

TABLE OF CONTENTS Page ACKNOWLEDGMENTS ........................................................................................................................... iv EXECUTIVE SUMMARY .......................................................................................................................... v 1.0 INTRODUCTION ................................................................................................................................. 1

1.1 Background ............................................................................................................................... 1 1.2 Scope of Work .......................................................................................................................... 1

2.0 FACTORS AFFECTING CHOICE BETWEEN 12" PE & 12 ST ........................................................ 2

2.1 Capacity of Pipe ........................................................................................................................ 2 2.2 Operating Pressures .................................................................................................................. 5

2.2.1 PE Pipe Allowable Operating Pressure ..................................................................... 5 2.2.2 Steel Pipe Allowable Operating Pressure ................................................................. 5

2.3 External Stresses on Buried Pipe .............................................................................................. 6 2.3.1 External Stresses on Buried PE Pipe ........................................................................ 6 2.3.2 External Stresses on Buried Steel Pipe ..................................................................... 9 2.3.3 Comparison of Factors of Safety Against Failure for PE and Steel Pipe ................ 11

2.4 Construction Factors ............................................................................................................... 12 2.4.1 Handling Pipe ......................................................................................................... 12 2.4.2 Joining Pipe ............................................................................................................. 12

2.5 Future Maintenance Factors .................................................................................................... 12 2.5.1 Locating Buried Pipe .............................................................................................. 12 2.5.2 Isolation Time ......................................................................................................... 13 2.5.3 Third Party Damage ................................................................................................ 13 2.5.4 Cathodic Protection Costs ....................................................................................... 14 2.5.5 Equipment Costs ..................................................................................................... 15

3.0 ANALYSIS OF CINERGY HISTORIC COST DATA ...................................................................... 16

3.1 Description of Cinergy Cost Data ........................................................................................... 16 3.1.1 Closed Job Cost Data .............................................................................................. 16 3.1.2 Winning Contractor Bid Data ................................................................................. 17 3.1.3 Pipe Material Cost Data .......................................................................................... 17

3.2 Analysis of Cost Data ............................................................................................................. 17 3.2.1 Transforming & Sorting Cost Data ......................................................................... 17 3.2.2 Plotting Cost Data ................................................................................................... 18 3.2.3 Regression Analyses ............................................................................................... 18 3.2.4 Elimination of Outliers and Influential Observations ............................................. 19 3.2.5 Significance Testing Regressed Slope and Intercept .............................................. 19 3.2.6 Confidence Intervals ............................................................................................... 20 3.2.7 Extrapolation ........................................................................................................... 20 3.2.8 Hypothesis Testing Correlations of Steel and PE ................................................... 20

3.3 Results of Data Analyses ........................................................................................................ 21 3.3.1 Contractor Labor Cost Regression Results ............................................................. 21 3.3.2 Contractor Bid Price Regression Results ................................................................ 24 3.3.3 Pipe Price Regression Results ................................................................................. 25

4.0 12" MAIN REPLACEMENT COST COMPARISON ........................................................................ 27

iii

4.1 AMRP Cost Comparison ........................................................................................................ 27 4.2 Industry Historic Cost Savings of 12" PE over 12" ST .......................................................... 29

5.0 RECOMENDATIONS / CONCLUSIONS ......................................................................................... 31 6.0 REFERENCES .................................................................................................................................... 34

TABLES

Tables Dimensions of 12 PE and 12” Steel Pipe ...................................................................................................... 1 Example of Capacity Differences between 12” PE and 12” Steel Pipe ........................................................ 2 Example of MAOP’s for PE Pipe ................................................................................................................. 3 Modulus of Elasticity for Typical Trench Backfill Conditions .................................................................... 4 Example Calculation of External Stress on 12” Buried PE Pipe .................................................................. 5 Example Calculation of External Stress on 12” Buried Steel Pipe ............................................................... 6 Comparison of PE and Steel Estimated Factors of Safety from Example .................................................... 7 Summary of Job Costs as Percentage of the Average Job Total Cost for Contractor Installed Jobs ........... 8 Summary of Average Contractor Installed Job Material Costs .................................................................... 9 Summary of Estimated Total Job Unit Cost Savings for 12” PE Pipe Jobs over 12” Steel Pipe Jobs........ 10 Summary of CNG Contractor Unit Labor Costs for 12” PE and 12” Steel ................................................ 11 Summary of Industry Reported Unit Installation Cost Savings of 12” PE over 12” Steel ......................... 12 Summary of Installation Savings of PE pipe Jobs over Steel Pipe Jobs from Contractor Installed Jobs ... 13 Summary of Savings of PE Pipe Jobs over Steel Pipe Jobs from Awarded Contractor Bids ..................... 14 Pros and Cons of Using PE Gas Main ........................................................................................................ 15

FIGURES Figures Plot of Capacity Reduction in 12” PE compared to 12” Steel versus Pipe Length ....................................... 1 Plot of Estimated Savings of PE Pipe Jobs over Steel Pipe Jobs from Actual Contractor Installed Jobs ..... 2 Plot of Estimated Savings in Winning Contractor Bids between PE Pipe and Steel Pipe Installations ....... 3 Plot of Yearly Average Unit Cost Savings of PE Pipe over Steel Pipe vs. Year Purchased......................... 4 Plot of Average Job Fitting Material Costs vs. Pipe Size Installed for 2” through 12” Pipe ........................ 5 Plot of Estimated Savings of PE Pipe Jobs over Steel Pipe Jobs vs. Pipe Size Installed .............................. 6 Plot of Estimated Savings in Winning Contractor Bids between PE and Steel Installations vs. Pipe Size .. 7

iv

ACKNOWLEDGMENTS

I would like to thank all the Cinergy Gas Operations personnel and personnel from other Cinergy departments that supplied information for this report and that took the time to share their experience in constructively reviewing drafts. I would like to thank Mr. Roy Daines, my former manager, for originally entrusting me with the task of researching this report and for recognizing long ago that job cost data should be recorded for future use. Finally, I appreciate the time, patience, and support given to me by my current manager, Mr. Gary Hebbeler. I welcome any constructive comments and suggestions from those who may use this report. Sincerely, Christopher W. Ampfer Staff Engineer, Cinergy Corp.

v

EXECUTIVE SUMMARY Cinergy Gas Engineering (Cinergy) began an Accelerated Main Replacement Program (AMRP) in 2001 to replace approximately 1,450 miles of cast-iron and bare steel gas main in its distribution system located in Ohio and Kentucky. The AMRP is a 10-year program for Kentucky and a 15-year program for Ohio. It is estimated that approximately 169 miles (892,320 feet) of the 1,450 miles of gas main to be replaced is 12-inch diameter pipe. By the end of 2004, approximately 70 miles of the original 169 miles of 12-inch diameter pipe will have been replaced by the AMRP. Cinergy is considering using PE 2406 Medium Density Polyethylene (MDPE) pipe with a standard dimension ratio (SDR) of 13.5 or PE 3408 High Density Polyethylene (HDPE) pipe with a standard dimension ratio (SDR) of 17 to replace the remaining 100 miles of existing 12” main left in the AMRP rather than using 12-inch steel (X-42, 0.219” wall) pipe. Cinergy has used 8-inch diameter MDPE pipe and smaller since 1992 in its distribution system (operating pressures of 60-psig or less). Generally, steel pipe has been limited in its use to feeder line jobs and to distribution systems where pipe sizes greater than 8-inches are needed. This report was prepared to provide Cinergy Gas Engineering with a rational for making a decision between 12” MDPE, 12” HDPE, and 12” steel pipe (X-42, 0.219 wall thickness) for use in replacing the remaining 12” main in the AMRP. Differences in the physical properties, engineering properties, material costs, installation costs, and maintenance costs of the pipe materials are compared. Information for this report was gathered from Cinergy Gas Engineering records, published papers, pipe vendors, and other natural gas companies. The unit costs estimated in this report, and the data used to estimate

the unit costs are considered confidential to Cinergy Gas Engineering Department; therefore,

differences in costs are presented rather than presenting the actual cost data. Cinergy actual job costs (completed job costs without overheads applied) for contractor installed gas mains were used to determine differences in contractor labor installation unit costs between MDPE pipe jobs (2” through 8”) and steel pipe jobs (2” through 12”) installed in paved and non-paved areas. Completed job cost data consisted of Cinergy Crew Labor costs, Contractor Labor costs, Cinergy Material costs, Contractor Restoration and Material costs, and Other costs. Average jobs costs for MDPE pipe jobs and steel pipe jobs were also obtained from this data. Contractor labor unit costs for installing 12” MDPE in paved and non-paved areas were estimated from the completed 2” through 8” MDPE gas main job data using statistics. Analysis of the data yielded contractor labor cost savings of approximately 17% for 12” MDPE pipe over 12” steel pipe installed in non-paved areas, and a contractor labor cost savings of approximately 10% for 12” MDPE pipe over 12” steel pipe installed in paved areas. Contractor Labor costs make up approximately 50% of the total job costs (excluding company overheads) for contractor installed mains. The mean of the contractor unit labor costs for each pipe size group (2” through 8”) and pipe installation location (paved or non-paved) combination for the two material types (MDPE and steel) were compared to test if they were statistically different. Most steel versus MDPE cost comparisons were statistically different. Noise in the data hindered concluding positive differences in unit costs between some groups. The noise in the data came from the fact that more than one combination of pipe size, material type, and installation location may have been installed on a completed contractor installed job, but, the majority pipe size and type installed were recorded as the pipe size and type for the entire job. Winning contractor unit bids for MDPE pipe jobs (2” through 8”) and steel pipe jobs (2” through 12”) for installation in paved and non-paved areas were used to eliminate this noise in the cost data. The mean of the winning contractor unit bids for each pipe size group (2” through 8”) and pipe installation location (paved or non-paved) combination for the two material types (MDPE and steel) were compared to test if they were statistically different. All steel versus MDPE cost comparisons were found to be statistically different verifying that contractor unit costs for steel jobs are higher than contractor

vi

costs for MDPE jobs of the same pipe size and installation location. Analysis of the winning contractor bid data showed that the savings in contractor labor costs of 12” MDPE over 12” steel is approximately 31% for pipe installed in non-paved areas and approximately 49% for pipe installed in paved areas. MDPE pipe and steel pipe cost data along with average material costs from completed contractor installed gas main jobs were used to estimate differences in total material costs for MDPE and steel pipe jobs based on the majority pipe size installed for the job. Analysis of the material cost data showed that the savings in total job material costs of 12” MDPE over 12” steel is approximately 30%. Material costs make up approximately 13% of a typical contractor installed gas main job. From the preceding analyses, it was estimated that Cinergy could save 15% to 20% in total job costs by using 12” MDPE pipe instead of 12” steel pipe in the AMRP. Cinergy would have to install at least 7 miles of 12” PE to recover the estimated $500,000 in capital costs needed for new equipment necessary to install the 12” PE pipe.

Although 12” PE pipe installations appear to be more economical than 12” steel pipe installations, job site conditions and the desired operating pressure must be considered before selecting the pipe material. 12” steel pipe has a longer track record than the relatively new (since mid 1980’s) 12” PE pipe. The Table below lists some of the pros and cons of PE pipe over steel pipe.

Pros and Cons of Using PE Gas Main

PROS CONS

PE Pipe does not require corrosion maintenance or reporting

PE pipe capacity is lower than steel pipe of the same nominal pipe size and at a given pressure differential due to the thicker walls of PE pipe.

PE pipe costs less per foot than steel pipe Additional capital costs required for the purchase of equipment necessary to install and maintain pipe

PE pipe contractor unit installation costs are less than those of steel pipe PE pipe more susceptible to third party damage

PE pipe easier to move & store PE pipe difficult to locate if tracer wire broken or missing

PE pipe is chemically resistant to organics found in natural gas

PE pipes proven track record is not as long as that of steel pipe

PE pipe is abrasion resistant, no protective coatings to repair if scratched

Some state agencies haven’t accepted the use of PE pipe within roadway limits

PE pipe is flexible allowing it to be inserted. The flexibility sometimes eliminates fittings. Steel pipe can operate at higher pressures.

PE pipe fusing is a mechanical process; whereas, steel pipe welding is more technical.

7/27/2009 Page 1

1.0 INTRODUCTION Cinergy Gas Engineering (Cinergy) began an Accelerated Main Replacement Program (AMRP) in 2001 to replace approximately 1,450 miles of cast-iron and bare steel gas main in its distribution system located in Ohio and Kentucky. The AMRP is a 10-year program for Kentucky and a 15-year program for Ohio. It is estimated that approximately 169 miles (892,320 feet) of the 1,450 miles of gas main to be replaced is 12-inch diameter pipe. By the end of 2004, approximately 70 miles of the original 169 miles of 12-inch diameter pipe will have been replaced. Cinergy is considering using PE 2406 Medium Density Polyethylene (MDPE) pipe with a standard dimension ratio (SDR) of 13.5 or PE 3408 High Density Polyethylene (HDPE) pipe with a standard dimension ratio (SDR) of 17 to replace the remaining 100 miles of existing 12” main left in the AMRP rather than using 12-inch steel (X-42, 0.219” wall) pipe. Cinergy has used 8-inch diameter MDPE pipe and smaller in its distribution system for operating pressures of 60-psig or less since 1992. Generally, steel pipe has been limited for use on feeder lines and for use in distribution system piping with for pipe sizes greater than 8-inches. 1.1 Background

Natural gas companies have been using 12-inch diameter MDPE and HDPE in their gas distribution systems since the mid 1980’s. Lone Star Gas Company in Texas began using 12-inch polyethylene in 1983. National Fuel Gas Distribution Corp in New York began installing 12-inch PE in 1987. Washington Gas Light Company located in Washington, D.C., began installing 12-inch polyethylene pipe in 1988. Cinergy installed its first and only 12” MDPE in 1998 when approximately 2,500-feet of it was inserted into 16” standard pressure cast iron. U.S. Department of Transportation statistics indicate that as of year-end 2002, there were nearly 526,000 miles of plastic main and over 35.8 million plastic services installed in the systems of over 1400 gas companies in the U.S. Industry statistics also indicate that an additional estimated 39,000 miles of plastic main and almost 2.1 million plastic services are installed each year (Ref. 13). 1.2 Scope of Work

The scope of this report is to provide Cinergy Gas Engineering with sufficient information to aid the department in choosing an economical and engineering sound pipe material for replacing 12-inch diameter cast-iron and bare steel in its natural gas distribution system. Information for this report was gathered from Cinergy gas engineering records, published papers, pipe vendors, and other natural gas companies.

7/27/2009 Page 2

2.0 FACTORS AFFECTING CHOOSING BETWEEN 12” PE AND 12” ST

This section discusses the many factors that must be considered when choosing a pipe material for large replacement projects.

2.1 Capacity Pipe

The capacity, flow rate, of a pipe is dependent on the physical properties of the pipe (diameter, length, and roughness) and the inlet and outlet conditions of the pipe. The dependence of pipe capacity on these parameters is shown in the General Flow Equation, which is a simplified solution of the Bernoulli Energy Balance Equation. Cinergy Gas Engineering uses software developed by Cynergee Gas called Advantica Stoner that incorporates this equation to model its natural gas piping network. The General Flow Equation is presented below as follows: Equ. 1 Qb = C* Tb/ Pb*[( P1

2 – P2

2)*D

5 / (G*Tf*Zavg*L)]

1/2 * (1/f)

1/2

Qb = gas flow rate (CF/h, m3/h)

C = a constant whose value depends on the units of the other terms in the equation; C = 117.3 for the English and 0.23944 for the metric units specified. If any of the quantities to be substituted into a flow equation are in units other than those specified for the quantity, either its value must be converted into the units specified or the value of the constant must be changed.

Tb = absolute base temperature (ºR = temperature in ºF + 460º; ºK = ºC + 273º) Pb = base pressure (psia) P1 = upstream pressure (psia) P2 = downstream pressure (psia) D = inside pipe diameter (inches) G = specific gravity with respect to air (dimensionless) Tf = average absolute temperature of flowing fluid (ºR, ºK) Zavg = average compressibility factor of fluid at flowing conditions (dimensionless). At operating

pressures of 100 psia and less, the value of this factor for natural gas can be taken as 1.0. L = distance between upstream and downstream points at which P1 and P2 are measured (ft) f = Fanning friction factor (dimensionless)

Table 1 lists the dimensions (inside and outside diameters, wall thickness’, and cross-sectional areas) of 12-inch MDPE-SDR 13.5 pipe, 12-inch HDPE-SDR 17 pipe, and 12” diameter steel pipe (0.219” wall). The outside diameters of all three pipes are the same size, but the inside diameters are different due to the wall thickness of each pipe. The wall thicknesses of PE pipe increase as the SDR (pipe OD / pipe wall thickness) of the pipe decrease. The cross-sectional area of the 12-inch MDPE SDR 13.5 and 12-inch HDPE SDR 17 pipe are 23.8% and 17.8% less, respectively, than the cross-sectional area of 12-inch steel (0.219” wall).

Table 1 – Dimensions of 12” PE and 12” Steel Pipe

Pipe

Nominal

Diameter

(Inches)

Pipe Type Inside Pipe

Diameter

(Inches)

Outside

Pipe

Diameter

(Inches)

Pipe Wall

Thickness

(Inches)

Pipe

Inside

CS- Area

(Inch)2

CS-Area

Reduction

Compared

to Steel

12 Steel 12.312 12.75 0.219 119.05 ----

12 PE 2406, SDR 13.5 10.86 12.75 0.944 90.75 23.8%

12 PE 3408, SDR 17 11.25 12.75 0.750 97.82 17.8%

7/27/2009 Page 3

CP Chem Performance Pipe states that their PE pipe with internal fusion beads has a surface roughness, e, of 7E-5 feet, while steel pipe typically has a surface roughness of 2E-4 feet (Ref. 15). The relative roughness, ratio of surface roughness to pipe diameter (e/D), affects the flow through a pipe. In laminar flow, in which e/D is usually somewhat less than 0.01, the effect of the wall surface roughness is negligible. In turbulent flow, the friction factor increases as the wall surface roughness increases for a given Reynolds number and pipe diameter. However, the wall roughness will not affect the friction factor if the roughness height is smaller than the thickness of the viscous sub-layer. In this case, the pipe is hydraulically smooth. The thickness of the viscous sub-layer is a function of the Reynolds number, so that the same pipe may be hydraulically smooth at one flow rate and completely rough at another. If irregularities enter into the main fluid stream, they increase the turbulence, change the velocity profile, and increase the flow resistance. Beyond a certain value of e, the effect of the roughness is so great that the inertia forces caused by the fluid flowing around the projections completely outweigh the viscous forces. In these circumstances the pipe is said to be relatively rough. The Advantica Stoner software was used to calculate natural gas flow rates (Q) for pressure drops of 1-psi, 5-psi, and 10-psi within 100-feet, 1,000-feet, 10,000-feet, and 100,000-feet sections of 12” MDPE, 12” HDPE, and 12” steel. The capacities of the PE pipes were less than that of the steel pipe when the length of pipe and the pressure drop are held constant. The capacity reductions in the PE pipes compared to the steel pipe ([Qsteel-QPE]/Qsteel) are presented in Table 2.

Table 2 – Example of Capacity Differences Between 12” PE and 12” Steel Pipe

Pipe

Length

(feet)

Inlet

Pressure,

P1

(psi)

Outlet

Pressure,

P2

(psi)

12” Steel

Flow,

QS

(MCFH)

12” MDPE

Flow,

QMD

(MCFH)

12” HDPE

Flow,

QHD

(MCFH)

12” MDPE

Flow

Reduction

(QS – QMD)

QS

x 100

12” HDPE

Flow

Reduction

(QS – QHD)

QS

x 100

1,000 2 1.75 190 140 154 26.316% 18.947%

1,000 5 4.50 298 223 247 25.168% 17.114%

1,000 15 14.00 529 408 450 22.873% 14.934%

100 16 15 1750 1442 1592 17.600% 9.029%

1,000 16 15 539 415 458 23.006% 15.028%

10,000 16 15 161 117 130 27.329% 19.255%

100,000 16 15 46 33 36 28.261% 21.739%

100 20 15 4076 3518 3880 13.690% 4.809%

1,000 20 15 1271 1029 1135 19.040% 10.700%

10,000 20 15 388 295 325 23.969% 16.237%

100,000 20 15 115 83 92 27.826% 20.000%

100 25 15 5998 5273 5814 12.087% 3.068%

1,000 25 15 1878 1554 1715 17.252% 8.679%

10,000 25 15 579 448 495 22.625% 14.508%

100,000 25 15 173 127 140 26.590% 19.075%

7/27/2009 Page 4

The percentage of flow reduction in the 12” MDPE and 12” HDPE pipe lengths as compared to the 12” steel pipe lengths were plotted against the common logarithm (Log10) of the four pipe lengths for each of the three pressure drops on Figure 1, which shows three curves for each of the two PE pipes. The two sets of plotted curves show that the difference in capacity between PE pipes and steel pipe, decreases as the pressure differentials increase for a given pipe length. The data also shows that the difference in capacity between PE pipes and steel pipe for a given pressure differential, increases as the pipe length increases. Under the same operating conditions, 12-inch steel (0.219” wall) pipe offers the highest flow capacity, then 12” HDPE-SDR 17 pipe, with 12-inch MDPE-SDR 13.5 pipe having the lowest capacity.

Figure 1

Flow Reductions at Varying Pressure Drops for

12" MDPE SDR13.5 (ID=10.86") &

12" HDPE SDR 17 (ID=11.25")

versus 12" Steel (ID=12.312")

0%

5%

10%

15%

20%

25%

30%

10 100 1,000 10,000 100,000 1,000,000

Log of Pipe Length (feet)

%Flow Reduction in 12" PE vs 12"

ST

12in MDPE, Delta_P=1 psi 12in HDPE, Delta_P=1 psi

12in MDPE, Delta_P=5 psi 12in HDPE, Delta_P= 5 psi

12in MDPE, Delta_P=10 psi 12in HDPE, Delta_P=10 psi

Higher pressure differentials are required in 12” PE pipe than in 12” steel pipe for the two to convey the same volume of gas. The higher pressure differential required for the 12” PE pipe system may or may not cause an increase in operation costs. If compressors are the source of the inlet pressure, there may be a cost increase because they may have to operate more frequently. If regulators control the inlet pressure into the 12” PE system, there may not be any increase in operation cost.

7/27/2009 Page 5

2.2 Operating Pressures The proposed and possible future operating pressure of a piping system must be considered when choosing a pipe material. PE pipe has a lower allowable operating pressure than steel pipe of the same diameter. The following paragraphs discuss the allowable operating pressures of PE and steel pipe.

2.2.1 PE Pipe Maximum Allowable Operating Pressure (MAOP)

The United States Department of Transportation’s Code of Federal Regulations Title 49, Part 192.121, lists the design operating pressure formula for natural gas PE distribution pipe. The design pressure formula incorporates a built in factor of safety of 3.125 (i.e. 1/design factor = 1/0.32). The PE pipe design operating pressure formula below is independent of pipe diameter. Equ. 2 P = 2*S / (SDR-1) * 0.32

P = Design gauge pressure S = Long-term hydrostatic strength of PE pipe SDR = Standard dimension ration of PE pipe = ratio of average specified outside diameter to the

minimum specified wall thickness 0.32 = Built-In pressure reduction factor added by USDOT, equivalent to a Factor of Safety of

3.3 (1/.32) The design pressure is dependent on the long-term hydrostatic strength of the pipe, S, and the SDR of the pipe. The S-value for PE 2406 is 1,250 psi and 1600 psi for PE 3408 at 73 to 100 degrees F (Ref. 6). The maximum allowable design pressure for PE 2406 SDR 13.5 and PE 3408 SDR 17 is 64 psig (see Table 3).

Table 3 – Example of MAOP’s for PE Pipe

Pipe Nominal Diameter

and Type

Pipe Series S

(psi)

P Design

(psig)

Maximum

PUSED

by Cinergy

Safety

Factor

Used

SDR 13.5, MDPE 2406 6500 1,250 64 60 3.3

SDR 17, HDPE 3408 6800 1,600 64 60 3.3

All MDPE 2406 pipe and all HDPE 3408 pipe, with the same SDR, have the same allowable pressure rating regardless of the pipe diameter (Example: 12” MDPE SDR 13.5 has the same allowable operating pressure as 6” MDPE SDR 13.5). Cinergy limits the maximum pressure in its PE pipe natural gas distribution system to 60 psig. The USDOT allowable maximum operating pressure is 100 psig. Using pressures under 60 psig assures a factor of safety against bursting greater than 3.

2.2.2 Steel Pipe Maximum Allowable Operating Pressure

The United States Department of Transportation’s Code of Federal Regulations Title 49, Part 192.105, lists the formula to be used for calculating the design operating pressure of steel pipe for the distribution or transmission of natural gas. The design formula is as follows:

Equ. 3 P = (2*S*t / D) * F * E * T

P = Design gauge pressure S = Specified Minimum Yield Strength (SMYS) of steel pipe

7/27/2009 Page 6

= 42,000 psi or greater for Cinergy 12” steel pipe; however, fittings are 35,000 psi (Grade B) t = nominal wall thickness of pipe = 0.219” or greater for Cinergy 12” steel pipe

D = Nominal outside diameter of steel pipe F = Design pressure reduction factor based on Class Location of gas main = 0.72 for Class 1 Area, 10 or less buildings within 220 yards of gas main = 0.60 for Class 2 Area, between 10 and 46 buildings within 220 yards of gas main = 0.50 for Class 3 Area, greater than 46 buildings within 220 yards = 0.40 for Class 4 Area, 4 or more multiple story buildings within 220 yards of gas main

E = Design pressure reduction factor for Longitudinal Joints = 1.0 for electric resistance welded pipe used by Cinergy

T = Design pressure reduction factor to account for Temperature = 1.0 for operating pressures less than 250 degrees Fahrenheit

The design pressure for steel is directly dependent on the yield strength of the pipe and the wall thickness of the pipe. The maximum allowable operating pressure for 12” steel pipe with 0.219” wall thickness is 240 psig at 20%SMYS. This allowable operating pressure is 4 times greater than that of MDPE SDR 13.5 and HDPE SDR 17 pipe. Steel pipe can operate at much higher pressures than PE pipe. However, the higher allowable operating pressure of steel pipe is not a benefit if it is to be used as distribution piping (piping operating at pressures less than 60 psig).

2.3 External Stresses on Buried Pipe

The proposed and possible external stresses on a buried pipe from dead and live loads must be considered when choosing a pipe material. The following paragraphs discuss the differences in the allowable external stresses on buried PE and steel pipe.

2.3.1 External Stresses on Buried PE Pipe

Buried polyethylene pipe must be designed to withstand wall crushing, wall buckling, and ring deflection. These design parameters are defined as follows: Wall Crushing is the comparison of the external vertical pressure on the pipe to its long-term compressive yield strength. The compressive yield strength of HDPE is approximately 1,600 psi and 1,400 psi for MDPE. A minimum wall crushing safety factor of 2.0 is recommended. Wall Buckling is a longitudinal wrinkling of the pipe wall caused when the total external pressure on the pipe exceeds the pipe to soil systems critical buckling pressure; this can gradually occur over the long term. A minimum wall crushing safety factor of 2.0 is recommended. Ring Deflection is the vertical change in a pipes diameter from its original diameter when external pressure is applied to the pipe. The ratio of the vertical change in a pipe diameter to its original outside diameter is called the strain or ovality. Ring deflection is minimized by compacting the soil around the pipe so the loading over the pipe is distributed through the soil and across the soil arch around the pipe. Performance Pipe recommends a maximum strain of 3.38% and 4.25% on its SDR 13.5 and SDR 17 pipe, respectively (Ref. 5). The Design Manual by Chevron Phillips Chemical Company LP (Ref. 5) contains procedures for calculating these three design parameters. All of these design parameters are predominantly dependent on four factors: 1.) SDR of the pipe, 2.) buried depth of the pipe, 3.) total load over the pipe, and 4.) modulus of elasticity of the bedding and backfill material around the pipe in a trench installation or the natural soil

7/27/2009 Page 7

or compacted fill around it in directional-drilled installations. The depth of cover over a pipe and the backfill material are the primary design factors that can be adjusted to meet the required safety factors for the three design parameters. Cinergy typically uses SDR 13.5 MDPE pipe. The federal regulation minimum required buried depth for natural gas mains is 2-feet. The total load over a buried pipe varies depending on its location. The total load/stress on a buried pipe consists of a portion of the live loads from vehicle traffic or objects setting over the buried pipe and the total dead load from the weight of the soil over the pipe. The portion of the live load that acts on the pipe is estimated using the Boussinesq Theory. The Boussinesq Theory assumes homogeneous, elastic, and isotropic soil. The soil over the pipe acts as a bridge to spread the live loads out further and further over an increasing area as the depth of the main increases; therefore, the stress on the pipe from the live load is reduced the deeper the pipe is buried. However, the soil dead load increases as the as the pipe depth increases. The Modulus of Elasticity, E’, is used by Driscopipe in estimating the stresses on buried PE pipe. E’ is a measure of the compressibility of the soil backfill around a buried pipe; it is the ratio of soil pressure (stress) to soil deflection (strain) at a given soil density. Values for E’ for common backfill material were summarized from various sources in Table 4. The E’-value range for LSM was calculated from typical LSM unconfined compressive strength values, (f’c between 50psi and 100 psi) and typical LSM densities (see Equ. 4, Ref. 2).

Equ. 4 E’c = w1.5 *33*(f

’c)0.5

E’c = Secant Modulus of Elasticity for cement mixtures w = Density of LSM, typically 110-psf to 130-psf

Table 4 - Modulus of Elasticity for Typical Backfill Conditions

Soil Type and Condition Modulus of Elasticity, E’

(lbs/ft2)

Modulus of Elasticity, E’

(lbs/in2)

Sand, Loose (Ref. 11) 200,000 to 500,000 1,400 to 3,500

Sand, medium dense (Ref. 11) 4000,000 to 1,200,000 2,800 to 8,300

Sand, dense (Ref. 11) 1,000,000 to 2,000,000 6,900 to 13,900

Clay, medium dense, drained (Ref. 11) 100,000 to 1,000,000 700 to 6,900

Clay, stiff, drained (Ref. 11) 300,000 to 1,500,000 2,000 to 10,400

Low Strength Mortar 269,000 to 489,000 1,900 to 3,400

Auger Bored Installations (Ref. 20) 72,000 to 144,000 500 to 1,000

Equations 5 through 11 below were used to calculate the factors of safety against failure by wall crushing, wall buckling, and ring deflection for typical PE pipe installations using 12” MDPE-SDR 13.5 and 12” HDPE-SDR 17 at varying depths of 2-feet to 5-feet for a soil with a unit weight of 120 lbs/ft3, and varying surface live loads of 18 kips (18,000 lbs, standard highway axle loading for the design of flexible and rigid pavements, Ref. 2 & 23), and 32 kips (maximum point load from H20 and HS-20 loadings), and a backfill E’ of 2,000 psi. This E’-value was selected because it is within the range of values for the backfill conditions encountered or required under roadways (e.g., Low Strength Mortar (LSM) backfill or compacted sand in open cuts, and stiff clay in directional drilling). The internal operating pressure of the pipe was not considered when calculating the total load on the pipe. Driscopipe design procedures state that the internal pipe pressure and total external pressure act in opposite directions on the pipe walls so that the internal pressure would reduce the total load on the pipe, if it were to be considered.

7/27/2009 Page 8

Table 5 summarizes the calculated stresses on the buried PE pipes and the factors of safety against wall crushing, buckling, and excessive strain. The calculated design factors of safety far exceed their minimum required value of 2.0. Equ. 5 PT = PL + PS (Ref. 5) Equ. 6 PL = 3*L/ (2*pi*H2) (Ref. 5) Equ. 7 PS = w * H (Ref. 5) Equ. 8 Strain or Ovality in Pipe (assumed to equal the pipe to soil reaction) = PT / E’

(Ref. 5) Equ. 9 SA = PT * (SDR-1) / 2 (Ref. 5) Equ. 10 PC = 2.32*E / (SDR)

3 (Ref. 5)

Equ. 11 PCB = 0.8 * (E' * PC)1/2 (Ref. 5)

PT = total stress on buried pipe [psi] PL = Pressure on Pipe from Live Load directly over Pipe at ground level using the Boussinesq

Equation PS = Pressure from Soil Prism above Pipe SA = Compressive Stress on pipe from External Load PC = Hydrostatic Critical Collapse Differential Pressure PCB = Critical Buckling Pressure at Top of Pipe w = unit weight of backfill E' = Modulus of Elasticity of Backfill Material SDR = Standard Dimension Ratio = D / t D = outside diameter of pipe t = wall thickness of pipe SY = long time compressive yield strength of PE pipe = approx. ½ x tensile strength = 1,500 psi L = Live point load directly over pipe E = Time Dependent Modulus of Elasticity of PE Pipe, typically

= 35,000 psi typically at T = 73.4 oF, Life = 50 yrs, SA = 100 psi

7/27/2009 Page 9

TABLE 5 - Example Calculation of External Stress on 12” Buried PE Pipe

.

SDR

L

(lbs)

H

(ft)

PT

(psi)

SA

(psi)

Pc

(psi)

PCB

(psi)

Strain on

Pipe

PT / E’

FS against

Wall

Crushing

= SY / SA

FS against

Wall

Buckling

= PCB/PT

FS against

Exceeding

Allowable

Strain

17 18000 2 16.6 132.7 16.5 145 0.829% 11.3 8.8 5.1

17 18000 3 9.1 73.1 16.5 145 0.457% 20.5 15.9 9.3

17 18000 4 7.1 56.5 16.5 145 0.353% 26.5 20.6 12.0

17 18000 5 6.6 52.4 16.5 145 0.328% 28.6 22.2 13.0

17 32000 2 28.2 225.5 16.5 145 1.410% 6.7 5.2 3.0

17 32000 3 14.3 114.3 16.5 145 0.714% 13.1 10.2 5.9

17 32000 4 10.0 79.7 16.5 145 0.498% 18.8 14.6 8.5

17 32000 5 8.4 67.3 16.5 145 0.421% 22.3 17.3 10.1

13.5 18000 2 16.6 103.7 33.0 206 0.829% 14.5 12.4 4.1

13.5 18000 3 9.1 57.1 33.0 206 0.457% 26.3 22.5 7.4

13.5 18000 4 7.1 44.1 33.0 206 0.353% 34.0 29.1 9.6

13.5 18000 5 6.6 41.0 33.0 206 0.328% 36.6 31.4 10.3

13.5 32000 2 28.2 176.2 33.0 206 1.410% 8.5 7.3 2.4

13.5 32000 3 14.3 89.3 33.0 206 0.714% 16.8 14.4 4.7

13.5 32000 4 10.0 62.3 33.0 206 0.498% 24.1 20.6 6.8

13.5 32000 5 8.4 52.6 33.0 206 0.421% 28.5 24.4 8.0

E’ = 2,000 psi, w = 120 pcf, Allowable Strain = 0.0025*SDR = 4.25% for SDR 17 and 3.38% for SDR 13.5

2.3.2 External Stresses on Buried Steel Pipe Buried steel pipe must be designed to withstand wall crushing, wall buckling, and ring deflection, the same as PE pipe. These design parameters are defined as follows: Wall Crushing can occur when the external vertical pressure on the pipe exceeds the yield strength of the pipe. Wall crushing from exterior loads on buried steel pipe is highly unlikely because the yield strength is typically 30,000 psi or greater and the ratio of outside diameter to wall thickness is generally less than 100 (Ref. 13). Wall Buckling is a longitudinal wrinkling of the pipe wall caused when the total external pressure on the pipe exceeds the pipe to soil systems critical buckling pressure. Ring Deflection is the vertical change in a pipes diameter from its original diameter when external pressure is applied to the pipe. The ratio of the vertical change in a pipe diameter to its original outside

7/27/2009 Page 10

diameter is called the strain or ovality. The limiting strain for buried steel pipe is 20%; buckling typically occurs at a strain of 20% or greater (Ref. 13). Ring deflection is minimized by compacting the soil around the pipe so the loading over the pipe is distributed through the soil and across the soil arch around the pipe. Typical construction and code requirements limit the strain on steel pipe to less than 3% (Ref. 13). Equations 12 through 19 below were used to calculate the factors of safety against failure by wall crushing, wall buckling, and ring deflection for a 12” steel pipe under the same installation conditions as in the preceding 12” PE installation example. The internal operating pressure of the pipe was not considered when calculating the total load on the pipe. Table 6 summarizes the calculated stresses on the buried 12” steel pipe and the factors of safety against wall crushing, buckling, and excessive strain. The calculated design factors of safety far exceed their minimum required value of 2.0 Equ. 12 PT = PV + PP (Ref. 13)

Equ. 13 Pp = 3*L*I / (2*pi*H2) (Ref. 13)

Equ. 14 Pv = w * H (Ref. 13)

Equ. 15 Strain or Ovality = Dl * K * P / (E*I/(D/2)^3 +0.061*E') (Ref. 13)

Equ. 16 Through Wall Bending stress = 4 * E * (strain) * (t / D) (Ref. 13)

Equ. 17 Pc = (32 * Rw * B' * E' * E * I / D3 )1/2 (Ref. 13)

Equ. 18 Rw = 1 - 0.33 * (hw / H) (Ref. 13)

Equ. 19 B' = 1 / (1 + e^(-0.065*hw/H) ) (Ref. 13)

PT = total stress on buried pipe [psi] Pp = Pressure on Pipe from Live Load directly over Pipe at ground level using the Boussinesq

Equation with an Impact Factor, I added [psi] Pv = Pressure from Soil Prism above Pipe [psi] Pc = Critical Ring Buckling Pressure [psi] Rw = Groundwater Buoyancy Factor hw = the depth to groundwater water for 0 < hw < H [feet] H = depth to top of buried pipe [feet] B' = Empirical Constant w = unit weight of backfill [pcf] E' = Modulus of Elasticity of Backfill Material [psi] K = Bedding Constant for Modified Iowa Equation, typically 0.1 Dl = deflection Lag Factor for Modified Iowa Equation (1.0 (dry) to 2.25 (wet)) D = outside diameter of pipe [inches] t = wall thickness of pipe [inches] Y = yield strength of steel pipe used [psi] L = Live point load directly over pipe [lbs] E = Modulus of elasticity of steel [psi] I = Impact Factor = 1.5 for non-rigid pavement and 1.0 for rigid pavement cover I = Moment of Inertia of Pipe per inch of circumference = t3 / 12 [inch4 / inch]

7/27/2009 Page 11

TABLE 6 - Example Calculation of External Stress on 12” Buried Steel Pipe

H

(ft)

Rw

Pv

(lbs/ft2)

Pp

(lbs/ft2)

P

(lbs/ft2)

B'

Strain or

Ovality

Pc

(psi)

FS against

Wall

Crushing

FS against

Ring

Buckling

FS against

Exceeding

Allowable

Strain

2 1.00 240 3,223 3,463 0.22 0.088% 5,298 1,747 220 23

3 1.00 360 1,432 1,792 0.23 0.045% 5,425 3,374 436 44

4 1.00 480 806 1,286 0.24 0.033% 5,553 4,704 622 61

5 1.00 600 516 1,116 0.25 0.028% 5,682 5,421 733 71

Installation Type = Open Trench, Type of Backfill = compacted sand w = 120 pcf, E' = 2,000 psi, K = 0.10, Dl = 1.50, hw = 10 ft, P = 0 psi D = 12.75 inches, t = 0.219 inches, Allowable Strain on Pipe = 2.00%, Y = 42,000 psi L = 18,000 lbs, E = 2.90E+07 psi, I = 1.5, I = 0.00088 inch4 / inch

2.3.3 Comparison of Factors of Safety (FS) Against Failure for Steel and PE Pipe

The factors of safety against failure calculated for the 12-inch steel pipe at buried depths of 2’ to 5’ under an 18 kip load are several times greater than the factors of safety calculated for the 12-inch PE (SDR 17 & 13.5) pipe in Section 2.3.1 under similar installation conditions. This makes sense since the steel pipe in the example has a yield strength of 42,000 psi compared to the yield strength of PE of 1,500 psi. However, the factors of safety against failure for PE pipe are still acceptable. Table 7 below summarizes the factors of safety estimated for the steel and PE pipes in the preceding examples. The factors of safety against buckling and strain will increase for both steel and PE pipe as the strength of the backfill and surrounding soil increase (i.e. E’ increases). Flexible pipe deflects vertically under loading allowing the passive resistance of the backfill material to activate, thereby, transmitting a portion of the external load to the backfill and trench walls. External loads on buried flexible pipe are evenly distributed around their circumference; whereas, these external loads concentrate at the top and bottom of rigid pipes under the same conditions (Ref. 25).

TABLE 7 - Comparison of PE and Steel Estimated Factors of Safety from Example

12” MDPE, SDR 13.5

L = 18,000-lbs, E’ = 2,000 psi

12” Steel, 0.219” wall, X-42

L = 18,000-lbs, E’ = 2,000 psi

H, Soil

Cover

(ft)

FS against

Wall

Crushing

= SY / SA

FS against

Wall

Buckling

= PCB/PT

FS against

Exceeding

Allowable

Strain

FS against

Wall

Crushing

FS against

Ring

Buckling

FS against

Exceeding

Allowable

Strain

2 14.5 12.4 4.1 1,747 220 23

3 26.3 22.5 7.4 3,374 436 44

4 34.0 29.1 9.6 4,704 622 61

5 36.6 31.4 10.3 5,421 733 71

7/27/2009 Page 12

2.4 Construction Factors

2.4.1 Handling / Positioning Pipe

12-inch PE pipe weighs about half as much per foot as 12-inch steel pipe. 12-inch SDR 13.5 Series 6500 MDPE 2406 weighs 15.1 lbs/foot and 12-inch steel pipe (0.219” wall) weighs 29.31 lbs/foot. A standard 40-foot length of 12” MDPE-SDR 13.5 pipe weighs approximately 600-lbs and a standard 40-foot length of 12” steel (0.219” wall) pipe weighs approximately 1,200-lbs. Both PE and steel pipe would require heavy equipment to maneuver the pipe sections in to position for welding or fusing. However, the 12-inch PE pipe has some flexibility that may eliminate the need for fittings in vertical and horizontal bends where steel pipe would likely need a fitting or require a bending machine. The minimum bending radius for 12-inch PE pipe with fusion joints is 100-feet (Cinergy Gas Standard 2.18.10); and, the minimum bending radius for 12-inch steel pipe (X-42) is 719-feet to1,295-feet depending on the factor of safety applied for the Location Class of the pipe (Ref. 21). This advantage of 12” PE pipe over 12” steel pipe could lead to installation cost savings.

2.4.2 Joining Pipe

The time to join PE and steel pipe segments is dependent on the diameter, thickness, and material type of the pipe and the ambient air temperature. Welding time is dependent also on the speed of the welder whereas fusing time is dependent only on the fusion machine used. According to CPChem Performance Pipe of Plano, Texas, the average time to prepare and fuse two 12-inch diameter PE pipe ends together is 20 to 30 minutes plus an additional 30 minutes cooling before rough handling. The average time to prepare and connect PE pipe by an electrofusion coupling is 50 to 60 minutes. According to Cinergy’s welding department, the average time to weld a 12-inch diameter steel joint is 30 to 45 minutes plus another 10 to 20 minutes for cooling and wrapping the joint. This welding time is in agreement with published literature that estimates an average weld time of 60 minutes per 140 inches of weld (0.428 minutes/inch) on a ¼-inch thick wall pipe where stringer beads have already been run (Ref. 21). For a 12” nominal diameter steel pipe (0.219” wall) with a circumference of 40 inches, it takes approximately 10 minutes for prep work (grinding cleaning), approximately 10 minutes for welding the stringer bead, approximately 18 minutes to weld the outer bead (40” x 0.428minutes/inch), and approximately 10 to 20 minutes for cooling and wrapping the joint, for a total of around 50 to 60 minutes. It is easier to train personnel to fuse pipe than it is to train welders. Welding is more of technical process; whereas, fusing is a mechanical process. The possible savings in training and joining time could lead to installation cost savings for 12” PE over 12” steel. Cinergy requires all steel welders and PE fusers installing gas main to attend a daylong class yearly to re-certify them for their work.

2.5 Future Maintenance Factors

2.5.1 Locating Buried Pipe Costs

Buried pipe can be located by using a magnetometer or by using a transmitter/receiver type detector depending on the pipe material. A magnetometer detects the metallic property of the buried pipe and emits a tone that increases in volume, as the detector gets closer to the buried pipe. A transmitter/receiver type detector works in a similar manner as the magnetometer except a transmitter is connected to a test wire on the buried main that emits a signal through the pipe or tracer wire which is picked-up by a receiver carried over the pipe at the ground surface; the pipe is located where the strongest signal is read. These types of devices work best when the transmitter is within at least 500-ft of the receiver. Some of

7/27/2009 Page 13

these devices can also give an estimate of the buried depth of the main. Cinergy uses “split-box” and “gun” type line-tracing equipment manufactured by Goldak Inc., located in California. Buried steel pipe is generally easier to locate than buried PE pipe. Steel pipe can be located by using a magnetometer or by using a transmitter/receiver type detector connected at test connections. Generally, the larger the diameter of the steel pipe, the easier it is to locate. Other metallic pipe in contact with the buried steel main or near it can sometimes cause interference when trying to locate it. PE pipe has to be located with a transmitter/receiver type detector that is connected to the copper tracer wire attached to the pipe when it was installed. Tracer wires can break during installation, or be ripped out after installation, or corrode over time, and test or tracer wire box locations can also get ripped out, making it difficult to locate buried PE pipe.

2.5.2 Isolation Time Costs

The time to isolate a 12” PE main for an emergency repair or for a tie-in is less than the time to isolate a 12” steel main. Isolating sections of steel mains require several threadolets or stopple fittings to be welded to the steel main depending on the method of stopping the flow (bagging or stopple equipment) and the gas flow direction and pressure in the pipe. If the operating pressure on the steel main is greater than standard pressure and the gas flow will be stopped by bagging, a pressure crew is needed to reduce the pressure in the main to 3-psi or less before a section of main can be isolated. It is estimated that the time to isolate a section of 12” steel main after it has been uncovered can take 2.5 hours or more depending on the manpower available (number welders and stopple operators) and the method of isolation. Isolating a 12” main with conventional 12” stopples and 12” stopple equipment will take at least 5 hours. Isolating a 12” main with 8”x12” reducing stopples and reducing stopple equipment can cut this time in half to 2.5 hours. Polyethylene pipe can be squeezed off (flattening of the pipe between two-parallel bars) to nearly stop all gas flow without significant damage to the pipe. Vents can be placed at the isolation section between two squeeze-off locations when gas seepage is not acceptable. Typical squeeze-off tools are either hand powered or hydraulically operated. A PE pipe should not be squeezed–off in the same location twice and the pipe should be re-rounded after squeeze-off to prevent flow reductions (i.e. the area of an ellipse is less than that of a circle). One hole can be excavated for isolating a section of steel main; however, typical squeeze-off procedures for PE pipe require three holes, (one on either side of the repair area as well as one at the repair area), to be excavated to reduce the chance of sparking at the repair area from static electricity build-up generated during the squeeze-off process. PE pipe must be squeezed-off slowly and re-opened slowly to allow sufficient time to adjust to the high compressive and tensile stresses applied to the pipe’s inside wall during each process. The time to close and the time to open should each take longer as the SDR of the pipe decreases (i.e. wall thickness increases) and as the temperature decreases. Lower temperatures reduce the flexibility and ductility of PE pipe. Squeeze-off and reopening times of PE pipes should be around 5 minutes or greater for 3” and larger PE pipe in warm weather and should double as temperatures approach freezing. PE 3408 material is more susceptible to damage from squeeze-off than PE 2406 material and PE 2406 rebounds after squeeze-off better than PE 3408 (Ref. 24).

2.5.3 Third Party Damage Costs

Steel pipe has a higher resistance to puncture than PE pipe; this property may make steel pipe less susceptible or more resistant to third party damages. However, unreported third-party hits on steel pipe can lead to localized corrosion. The following paragraphs discuss a field experiment conducted by National Gas Distribution Corporation to test the susceptibility of PE to third party damage.

7/27/2009 Page 14

National Gas Distribution Corporation conducted a field experiment in 1987 to test the susceptibility of three PE pipe sizes (8-inch SDR 11 and 13, 10-inch SDR 13.5, and 12-inch SDR 13.5) to third party damage (Ref. 17). Pipe segments, 160-feet in length each, were buried according to proper construction practices for each combination of pipe size and SDR at cover depths of 18-inches to 36-inches. The pipe segments were then pressurized with 40-psig of compressed air. Three different pieces of excavating equipment were used to create hits on the buried segments of pipe. The equipment used included:

1. Loader/Backhoe – 69 hp with 12-inch wide 3-tooth bucket 2. Track Excavator - 75hp, 30,000 lb with 24-inch wide 5-tooth bucket, 3. Trencher

Six types of hits were performed on the various buried pipe segments. The hit types modeled included the following:

1. A hit on top of the pipe. 2. A side hit from the machine perpendicular to the buried pipe. 3. Hooking the bottom with machine perpendicular. 4. Side scrape from machine parallel to buried pipe. 5. A side hit with machine at 45o angle to buried pipe. 6. A surprise hit where the operator excavated in area of unknown buried pipe

The 12-inch SDR 13.5 PE pipe was subjected to 45o and 90o side hits with the backhoe and the trackhoe. Both pieces of equipment were able to penetrate the 12-inch pipe with 45o side hits, although the operator stated that he could feel the pipe before penetrating it. The operator also stated that it took greater effort to penetrate the larger diameter pipe than the smaller diameter pipes at the same hit angle. The trackhoe and the backhoe could not completely penetrate the 12-inch pipe with a 90o side hit although the pipe was scratched deeper than 10% of the wall thickness. The 45o sidewall hits were more successful than the 90o sidewall hits in penetrating the buried pipe because greater penetrating pressures were achieved by having fewer bucket teeth in contact with the PE pipe. A parallel top hit from the excavator also punctured the 12-inch pipe, but only after several attempts. The trencher operator felt the 90o sidewall hit with only scratch damage to the 12-inch pipe. The 45o sidewall hit with the trencher penetrated the pipe but the operator had to allow it time to saw through the pipe. The National Fuel Gas Distribution study provides some confidence in large diameter PE pipe’s resistance to third-party damage. Using select backfill, installing marking tape or tracer wire, marking pipe locations before digging, and publicizing underground utility locations with an underground locating service, can minimize third-party damage to buried PE pipe.

2.5.4 Cathodic Protection Costs

Steel pipe requires cathodic protection during its useful life to prevent corrosion. PE pipe does not corrode and does not require cathodic protection. Consolidated Natural Gas Company estimated that a cathodic protection system costs approximately $0.75/foot to install and $0.05/foot to maintain over a 20-year period (Ref. 9). Washington Gas estimated cathodic protection installation costs of $0.67/foot ($16,000 per 4.5 miles) for large diameter steel pipe in 1990 and projected the installation costs to increase at a rate of $8,000 per year ($0.33/foot/year) based on their steel installation rates (Ref. 31). In 1989, Washington Gas paid $0.06/foot for cathodic protection maintenance of its gas distribution system (Ref. 29).

7/27/2009 Page 15

Approximately 97% of Cinergy’s steel gas-piping system is cathodically protected with anodes, and 3%, most of which is feeder lines, is cathodically protected with rectifiers. Rectifier cathodic protection systems cost approximately $1.00/foot based on the cost of $50,000 to protect 10 miles of Cinergy’s recently installed 24” SWPC feeder line “C314”. The cathodic protection materials needed for steel distribution main installations are heat-shrink wraps or epoxy coating at every welded joint (at least every 40-feet) and 17-lb magnesium anodes and cathodic test boxes every 500-feet. The unit cost for this cathodic protection material is approximately $0.50/foot. If overhead costs and labor costs for installation are added, Cinergy’s unit cathodic protection installation cost could be approximately $1.00/foot. Cinergy’s annual unit cathodic protection maintenance cost is approximately $0.03/foot to $0.05/foot. These cathodic protection costs are in line with the researched costs.

2.5.5 Equipment Costs

Cinergy is equipped with all of the machinery and tools necessary to install 12” steel. However, Cinergy would have to purchase new equipment to install and maintain 12” PE. Personnel would have to be trained on this new equipment, also. It is estimated that Cinergy would have to purchase 6-McElroy Hydraulic Fusion Machines (approx. $26,000 each), 18-12” Hydraulic Squeeze-Off machines (approx. $7,000 each), and 12-Gillotine Pipe Cutters (approx. $2,200 each) for the C&M district offices. The total estimated cost for the new 12” PE equipment and the personnel training to use it is approximately $500,000. Gas Contractor’s would not have to purchase any 12” PE equipment for the AMRP if Cinergy allowed them to use their new equipment and the letting of 12” PE jobs were scheduled so adjacent jobs do not overlap.

7/27/2009 Page 16

3.0 ANALYSIS OF CINERGY HISTORIC COST DATA

Historical cost data from contractor installed gas main jobs, contractor-winning bids, and pipe material purchases is used in this section to predict unit cost differences between steel and PE jobs, bids, and material purchases. The contractor unit costs and contractor unit bids for 2” through 8” main were used to predict unit costs for 12” PE. The unit costs estimated in this report, and the data used to estimate

the unit costs are considered confidential to Cinergy Gas Engineering Department; therefore,

comparisons between costs are stated as percentages rather than as whole numbers.

3.1 Description of Cinergy Cost Data

The following paragraphs describe the cost data and how it was used in this report:

3.1.1 Closed Job Cost Data

Cinergy Gas Engineering has used a database program (Paradox by Borland) since 1991 to track actual gas main installation job costs for completed or closed jobs. Completed contractor installed steel and PE gas main jobs from 1991 through mid 2003 were retrieved from this database and used to estimate average unit costs for contractor work, company work, and company material and other costs, and to determine differences in the contractor unit costs between PE and steel jobs and jobs installed in paved and non-paved areas. PE pipe installations far out numbered the steel pipe installations in the data because PE has been the primary material of choice since the early 1990’s. However, steel pipe continues to be used for feeder line jobs and jobs using 12” or larger pipe. Estimated unit contractor installation costs for 2” through 8” PE pipe were used to project contractor installation costs for 12” PE jobs installed in paved and non-paved areas because Cinergy has performed only one 12” PE job (12” PE insertion into 16” standard pressure cast iron in 1998). Data gathered from the closed jobs included:

1. Cinergy Labor Costs – Cinergy labor costs on contractor-installed jobs may include costs for

performing tie-ins, inspecting jobs, regulating pressures, and repairing damaged facilities. 1. Contractor Labor Costs - Contractor labor costs include costs for installing the pipe and may

include costs for performing tie-ins and restoration. 2. Restoration Costs – Restoration costs are generally contractor costs to restore all paved and

non-paved areas damaged from the installation of the main. 3. Contractor Material Costs – Contractor material costs may include flowable fill, sand, or

other material costs that may have been broken out of the restoration or labor costs. 4. Cinergy Material Costs – This includes all pipe and fitting costs. This item may include costs

for other material also such as cathodic protection material, PE pipe tracing material, and valve assembly material or these costs may have been placed under the Other Costs.

5. Miscellaneous or Other Costs – These costs include Cinergy costs not covered under the labor or material costs.

6. Cinergy Overhead Costs – Overhead loadings or multipliers are applied to all Company Labor, Contractor Labor, Restoration, Material, and Miscellaneous Costs. This multiplier accounts for Cinergy clerical, engineering, and executive labor costs, facility costs, equipment costs, personnel benefits, and profit.

7. Total Job Costs – The actual total job cost is the sum of Cinergy Labor, Contractor Labor, Restoration, Contractor and Company Material, Miscellaneous, and Overhead costs.

8. Actual Total Pipe Length Installed – This is the total pipe length installed independent of pipe size.

9. Predominant Pipe Size Installed – Gas main replacement projects usually contain more than one pipe size. The longest length of pipe size installed is the predominant pipe size.

7/27/2009 Page 17

10. Pipe Material Type – The pipe material of the predominant pipe size is the predominant pipe material (steel or PE).

11. Unit Costs – Unit Costs were calculated for Contractor Labor, Restoration, and Total Job by dividing the associated costs by the pipe length installed.

3.1.2 Winning Contractor Bid Data

Winning contractor bids for gas main installations between 2001 through mid 2003 were used to estimate differences in unit bid prices between PE pipe and steel pipe installations in paved and non-paved areas for 2” through 12” gas main jobs, and to estimate a contractor unit bid price for 12” PE. Contractor winning bids were retrieved from Paradox, the database program used by Cinergy Gas Engineering. Cinergy Gas Engineering began tracking winning contractor bids for gas main installations in 2001. The estimated average contractor unit bid prices for each pipe size, pipe material, and installation location combination were compared to the contractor labor unit costs estimated from the closed job data to eliminate bad data from the closed job data sets and to confirm their reasonable accuracy. Estimated unit contractor installation bids for 2” through 8” PE pipe were used to project a unit contractor installation bid for 12” PE jobs installed in paved and non-paved areas since Cinergy currently does not use 12” PE.

3.1.3 Pipe Material Cost Data

The average annual unit steel and PE pipe costs and the total annual length of pipe purchased by Cinergy’s Brecon Distribution Center from 1999 through 2003 was used to predict average unit costs for 12” steel and 12” PE pipe, to determine differences in average pipe unit costs between steel and PE pipe for sizes 2” through 12”, to determine the yearly change in pipe prices for the different pipe sizes, and to determine the fraction of actual closed job material costs that accounts for pipe and which fraction accounts for fittings and other material. The predicted 12” steel and 12” PE pipe unit costs were compared to the closed job material average unit costs to estimate fitting and other material costs, to eliminate bad data from the closed job data sets, and to confirm their reasonable accuracy.

3.2 Analyses of Cost Data

All cost data was analyzed using Microsoft Excel. With Excel, the data could be sorted and plotted, and several types of single variable regression curves could be fit to the plotted data with the statistics for the curve or line also calculated. Plots of the cost data are in the Appendices of this report.

3.2.1 Transforming & Sorting Cost Data

Before the closed job cost data could be analyzed it was sorted several times to segregate the data into useful groups. The cost data was sorted as follows:

1. The data was sorted by contractor labor costs. Data with no contractor labor cost or contractor costs that were less than 1.5 times the company labor costs were deleted from the data set so only contractor installed jobs were in the data set. This had to be done because company crews may have completed jobs that were bid to contractors and contractors may have actually completed jobs given to company crews. Fortunately, this did not affect a large portion of the data.

2. The data was sorted by the date the job was completed. Consumer Price Index (CPI) Conversion

factors were added to the data set to convert the dollars from the job-closed year to 2003 dollars. The contractor labor costs for each job were multiplied by the CPI factors to produce contractor labor costs in 2003 dollars. This was done in an attempt to prevent inflation from influencing the

7/27/2009 Page 18

final results. The contractor unit labor costs for each job was calculated by dividing the contractor labor costs in 2003 dollars by the length of pipe installed.

3. The closed job data was sorted by the ratio of restoration costs divided by total contractor costs

(Contractor Labor + Restoration Costs + Contractor Material Costs). Closed contractor installed jobs with restoration making up 15% or less of the total contractor cost were labeled as installed in non-paved area. Closed contractor installed jobs with restoration making up greater than 15% of the total contractor cost were labeled as installed in paved area. The original Class locations of the closed jobs, (assigned when the work orders were written), were edited as needed to reflect the installation location determined by this step. Class refers to the material type installed and the location in which it was installed. Cinergy Gas Engineering uses the following classifications:

• Class 4 – Steel pipe installed in a Core City (heavy traffic and obstructions) under mostly paved areas

• Class 5 – Steel Pipe installed in a subdivision type area under mostly paved areas

• Class 6 – Steel pipe installed in a subdivision type area under mostly non-paved areas

• Class 9 – Steel Feeder Line or steel main extension installed in paved or non-paved areas

• Class 40 - PE pipe installed in a Core City (heavy traffic and obstructions) under mostly paved areas

• Class 50 - PE pipe installed in a subdivision type area under mostly paved areas

• Class 60 – PE pipe installed in a subdivision type area mostly in non-paved areas

4. The data was sorted by the predominant pipe material type (steel or PE) installed on the job. Gas main replacement projects usually contain more than one pipe size and/or pipe material. The size and type of pipe accounting for the majority of the total length of pipe installed was the predominant pipe size and predominant pipe material used to represent the job.

5. Each material type grouping was then sorted by the predominant pipe size (2”, 4”, 6”, 8”, 12”,

larger than 12”).

6. Each pipe material type and size grouping was sorted by the area in which it was installed (in paved area, or in non-paved area). This final sort left four groups of data for each pipe size.

3.2.2 Plotting Cost Data

Pipe length purchased, installed, or bid was plotted against total material costs, total contractor labor costs in 2003 dollars, or winning contractor installation bid prices on scatter plots to determine if there were linear relationships between the pipe length and cost variables. The scatter plots showed that positive linear associations exist between pipe lengths and costs. Steel and PE pipe installed in paved areas and steel and PE installed in non-paved areas were plotted together for each pipe size.

3.2.3 Regression Analysis

Least squares regression was used to fit lines or curves to the data of the scatter plots. A curve or line fitted by least squares minimizes the sum of the squared residuals. Residuals are the vertical differences from the fitted line or curve to points on the scatter plot of the data. Lines and curves were fit to the data scatter plots and the correlation coefficient (R2) was used to screen the fits of the regression curves. It turned out that a straight-line regression was typically the best fit to the plotted data sets. Basic statistic data and an Analysis of Variance (ANNOVA) Tables were calculated for each fitted regression line or curve.

7/27/2009 Page 19

3.2.4 Elimination of Outliers and Influential Observations

After a line or curve was fit to a scatter plot, an attempt was made to sort out bad data and to determine the plausible limits of the regression. Many Closed Jobs were removed from the data subsets to eliminate gaps in the independent and dependent variables, which helped reduce the standard deviations of the variables, improved the correlation between the variables, and improved the regression correlation coefficient (R2). Data was removed until the elimination of data had little affect on the preceding parameters. Independent variables (pipe length) that are at extreme ends of the core of the variables are called influential observations. Generally, jobs below 200’ in length were removed from the data sets because contractor prices are highly volatile for this pipe length range. Jobs over a specific pipe length were removed from the data set when comparing steel and PE job costs or bids so the range of pipe lengths between the two was similar. Dependent variables (costs) that are at extreme ends of the core of the data sets are called outliers. Unit contractor labor costs, which were calculated by dividing the Contractor Labor costs by the actual pipe length installed, were used to remove outliers. Closed jobs were sorted by unit contractor labor costs and were removed from the low and high ends of the data subsets in equal numbers to eliminate gaps or extreme values in these costs. If a job with the lowest contractor labor unit cost was eliminated to narrow the gap between the next highest contractor labor unit cost, then the job with the highest unit contractor labor cost was also eliminated from the data subset. Contractor labor unit costs and bid unit costs were very volatile for some pipe sizes. In some instances it may appear that disproportionate numbers of jobs were removed from the data sets in Appendix A; however, removal of these jobs with extreme low or high unit costs did little to affect the mean contractor labor or bid unit costs, but greatly reduced the standard deviations in the data sets. Familiarity with acceptable and reasonable costs also aided in separating good and bad data.

3.2.5 Significance Testing Regressed Slope and Intercept

After a least-squares line was fitted to a scatter plot, the parameters in the equation were evaluated to determine if they actually aid in predicting the dependent variable; this is called Hypothesis Testing. The Null Hypotheses (Ho) and the Alternative Hypotheses (Ha) for the equation of a positively sloped straight line (Y=Bo + B1*X) are: Ho : B1 = 0 or Ha : B1 > 0 for the slope of a scatter plot with a positive association,

and , Ho : Bo = 0 or Ha : Bo > 0 for the intercept of a scatter plot with a positive association. The Student’s t-tests were used to test the Null Hypotheses of the slopes and the intercepts of regressed lines using a risk level (alpha level) of 0.05 (which is a typical “rule of thumb” level). An alpha level of 0.05 means that there is a 5% chance that the wrong conclusion will be made. t-statistics were calculated for each parameter (slope and intercept) in the regression equations and reported in the ANNOVA Tables shown in the appendices of this report after each data set. The calculated t-statistic was compared to the critical t-statistic obtained from a Student’s t-distribution table using a two-tailed test with n-2 degrees of freedom, (where n is the number of data points or observations), at a significance level of 1-alpha/2. The formulas for the t-tests are:

7/27/2009 Page 20

t-calculated for slope (B1) = (B1 * standard deviation of X-values * (n-1)1/2) [(Sum of the Squares of Error in Y-values) / (n-2)]1/2 t-calculated for intercept (B0) = Bo / [(Sum of the Squares of Error in Y-values)*(1/n + (mean X)2 / (n-

1)*(standard deviation of X-values)1/2)] The Null Hypothesis was rejected if t-calculated > t-critical. The Null Hypothesis was accepted if t-calculated < t-critical. The probability (P-value) that the t-statistic is exceeded reported in the ANNOVA Table was also used as an aid in accepting or rejecting the Null Hypothesis. The final conclusion of a significance test is given in terms of the Null Hypothesis. If the Null Hypothesis for the slope was accepted, then there was not a linear relationship between the independent variable, X (pipe length), and the dependent variable, Y (cost). If the Null Hypothesis was rejected for the slope, then the Alternative Hypothesis may be true. The slope of a regressed line through the scatter plots of pipe length versus cost yields an average unit cost ($/ft). The Null Hypothesis for the intercept was tested if the slope was found to be significant to the regression equation. If the Null Hypothesis for the intercept was accepted, then the intercept was set to the origin (0,0). If the Null Hypothesis for the intercept was rejected, then the Alternative Hypothesis may be true and the intercept was included in the formula for the straight line. Typically for the linear regression equations presented in this report, the null hypothesis for the slopes were rejected (a linear relationship existed) and the null hypothesis for the intercepts were accepted (intercept = 0), which shortened the regression equations to Y = m*X.

3.2.6 Confidence Intervals

Confidence intervals indicate the upper and lower limits of normally distributed sample data for which the dependent variable is explained by the dependent variable at a given a significance level. The 95% confidence intervals were calculated for regression equations presented in this report. The 95% confidence intervals of a regression line contain 95% of the data points used in the regression.

3.2.7 Extrapolation

The regressed models presented in this report should be limited to predicting values within the range of the independent variables (pipe length).

3.2.8 Hypothesis Testing

The t-Test was used to perform hypothesis testing of data subgroups. The formula for this t-Test is the ratio of the difference between group means over the variability of groups:

t-calculated (Assuming Unequal Variances) = (Mean1 – Mean2) / (variance1/n1 + variance2/n2)1/2

Note: The variance is the square of the standard deviation and n is the number of observations in the group.

In testing the differences in means between data subgroups, an assumption regarding the variance of the two different subgroups had to be made: The variances are equal or not equal. The equal variance assumption yields a pooled variance for the two groups larger than that for the un-equality variance assumption, and a larger degree of freedom, resulting in a slightly more powerful test of statistical significance. However, one should have some evidence in logic or observation that the variances are the same before using the equal variance assumption. Many researchers prefer using the non-equal variance

7/27/2009 Page 21

assumption; therefore, this assumption was used in this report. Typical hypothesis testing is presented in the following form:

Null Hypothesis, Ho : Mean1 = Mean2 Alternative Two-Tailed Hypothesis, Ha : Mean1 not equal Mean2

A statistics routine under the Data Analysis Tool in Excel was used to compute the t-calculated and the t-critical values (t-value at the test significance level and test degrees of freedom) for each group comparison. The mean contractor unit costs (in 2003 dollars) between the material type and installation location subgroups of each pipe size 2” through 8” group were compared to test the following hypotheses:

1. Mean Contractor Unit Labor Costs for PE pipe installed in Non-Paved Areas = Mean Contractor Unit Labor Costs for PE pipe installed in Paved Areas

2. Mean Contractor Unit Labor Costs for PE pipe installed in Non-Paved Areas = Mean Contractor Unit Labor Costs for Steel pipe installed in Non-Paved Areas

3. Mean Contractor Unit Labor Costs for Steel pipe installed in Paved Areas = Mean Contractor Unit Labor Costs for Steel pipe installed in Non-Paved Areas

4. Mean Contractor Unit Labor Costs for Steel pipe installed in Paved Areas = Mean Contractor Unit Labor Costs for PE pipe installed in Paved Areas

t-Tests were also used to check to see if mean contractor unit costs (in 2003 dollars) for steel feeder line jobs were statistically different than the mean contractor unit costs (in 2003 dollars) for other steel jobs for a given size pipe and installation location. These tests were performed because steel feeder line jobs have costs for x-ray of welds that regular steel jobs do not have.

3.3 Results of Data Analyses

The following paragraphs summarize the findings in evaluating the Contractor Labor Costs, Contractor Bid Prices, and material costs.

3.3.1 Contractor Labor Cost Regression Results

Linear relationships exist between the contractor labor costs and the length of pipe installed. Significance testing of the intercepts revealed that they were typically insignificant to the regression equations. This yielded regression equations in the following form:

Y = Total Contractor Labor Cost = m * X, where X = equals pipe length installed, and m = Contractor Labor cost per foot of pipe installed = slope of line

The regressed slopes were plotted against their corresponding nominal pipe diameter for each of the four subgroups investigated and regression lines were fit to scatter plots producing four regression equations. These four equations were used to predict unit contractor labor costs for each pipe size based on the material type and the installation location; in particularly, the two regression equations for PE pipe were used to predict unit contractor labor costs for 12” PE installed in paved areas and 12” PE installed in non-paved areas. The predicted contractor unit labor costs for pipe sizes 2” through 8” closely reflected the regressed slopes from the scatter plots of contractor labor costs versus pipe length installed.

7/27/2009 Page 22

The predicted contractor unit labor costs for PE pipe installed in non-paved areas are 32% to 17% less than the corresponding contractor unit labor costs predicted for steel pipe installed in non-paved for sizes 2” through 12”, respectively. The predicted contractor unit labor costs for PE pipe installed in paved areas are 48% to 10% less than the corresponding contractor unit labor costs predicted for steel pipe installed in paved for sizes 2” through 12”, respectively. The following conclusions were made based on the hypotheses testing of the mean contractor unit labor costs:

1. The average contractor unit labor costs of 4” PE pipe jobs and 6” PE pipe jobs installed in non-paved areas are significantly different than their corresponding 4” steel pipe jobs and 6” steel pipe jobs installed in non-paved areas at a confidence level of 95%. For installations in non-paved areas, contractor unit labor costs for 4” steel pipe jobs exceed those of 4” PE pipe jobs by 25%, and contractor unit labor costs for 6” steel pipe jobs exceed those of 6” PE pipe jobs by 22%.

2. The average contractor unit labor costs of 4” PE, 6” PE, and 8” PE pipe jobs installed in

paved areas are significantly different than their corresponding 4” steel, 6” steel, and 8” steel pipe jobs installed in non-paved areas at a confidence level of 95%. For installations in paved areas, contractor unit labor costs for 4” steel pipe jobs exceed those of 4” PE pipe jobs by 30%, contractor unit labor costs for 6” steel pipe jobs exceed those of 6” PE pipe jobs by 21%, and contractor unit labor costs for 8” steel pipe jobs exceed those of 8” PE pipe jobs by 16%.

3. The average contractor unit labor costs between pipe 2” PE, 6” PE, and 8” PE jobs installed

in non-paved areas are not significantly different from their corresponding 2” PE, 6” PE, and 8” PE jobs installed in paved areas at a confidence level of 95%.

4. The average contractor unit labor costs of 2”, 4”, 8”, and 12” steel pipe jobs installed in non-

paved areas are not significantly different from their corresponding 2”, 4”, 8”, and 12” steel pipe jobs installed in paved areas at a confidence level of 95%.

5. The average contractor unit labor costs of steel feeder line jobs for pipe sizes 2” through 12”

installed in non-paved areas are not significantly different from the other steel pipe jobs for their corresponding pipe sizes 2” through 12” installed in non-paved areas at a confidence level of 95%.

6. The average contractor unit labor costs of steel feeder line jobs for pipe sizes 2” through 12”

installed in paved areas are not significantly different from the other steel pipe jobs for their corresponding pipe sizes 2” through 12” installed in paved areas at a confidence level of 95%.

Insignificant comparisons between PE and steel pipe within the same installation location were caused by limited data and high standard deviations (noise) in the data. Winning contractor unit bids for MDPE pipe jobs (2” through 8”) and steel pipe jobs (2” through 12”) for installation in paved and non-paved areas were used to eliminate this noise to reveal differences in contractor labor unit costs between PE and steel pipe jobs. These differences are reported in Section 3.3.2. The sum of the costs of Company Labor, Contractor Labor, Company Material, Restoration, Contractor Material, and Company Other, make up the Direct Cost of a job. The costs of each of these components

7/27/2009 Page 23

were calculated as a percentage of the direct costs for each of the jobs. These job component percentages of the total direct job cost are summarized in Table 8.

Table 8

Summary of Job Costs as Percentages of the Average Job Total Cost for Contractor Installed Jobs

Pipe

Description

Installation

Location

Number of

Jobs in

Data Set

Company

Labor

Contractor

Labor

Company

Material

Costs

Paving /

Restoration

Costs

Contractor

Material

Costs

Company

Other

Costs

2" PE through 8" PE

Non-Paved Area 274 13.23% 60.39% 11.75% 4.89% 0.36% 9.39%

2" Steel through 12" Steel

Non-Paved Area 126 12.74% 50.38% 15.92% 6.35% 3.31% 11.30%

Avg. = 12.98% 55.38% 13.84% 5.62% 1.84% 10.35%

Average Values used in

12" Pipe Cost Comparison = 13.0% 55.0% 14.0% 6.0% 2.0% 10.0%

2" PE through 8" PE Paved Area 358 11.88% 42.19% 8.99% 27.49% 0.38% 9.08%

2" Steel through 12" Steel Paved Area 116 13.07% 47.74% 15.12% 14.26% 0.51% 9.31%

Avg. = 12.47% 44.96% 12.05% 20.88% 0.44% 9.20%

Average Values used in

12" Pipe Cost Comparison = 12.5% 45.0% 12.0% 21.0% 0.5% 9.0%

7/27/2009 Page 24

3.3.2 Contractor Winning Bid Price Regression Results

Linear relationships exist between the contractor bid price and the length of pipe to install. Significance testing of the intercepts revealed that they were typically insignificant to the regression equations. This yielded regression equations in the following form:

Y = Total Contractor Bid Price = m * X, where X = equals pipe length to be installed, and m = Contractor Bid per foot of pipe to be installed = slope of line

The regressed slopes were plotted against their corresponding nominal pipe diameter and regression lines were fitted to the corresponding scatter plots for each pipe material type (PE and Steel) and installation location data group (in paved or non-paved area) resulting in four regression equations. These four equations were used to predict unit contractor bid prices for each pipe size based on the material type and the installation location; in particularly, the two regression equations for PE pipe were used to predict contractor unit bid prices for 12” PE installed in paved areas and 12” PE installed in non-paved areas. The predicted contractor unit bid prices for pipe sizes 2” through 8” closely reflected the regressed slopes from the scatter plots of contractor bid price versus pipe length to install. The predicted contractor unit bid prices for PE pipe installed in non-paved areas are 69% to 31% less than the corresponding contractor unit bid prices predicted for steel pipe installed in non-paved for sizes 2” through 12”, respectively. The predicted contractor unit bid prices for PE pipe installed in paved areas are 27% to 49% less than the corresponding contractor unit bid prices predicted for steel pipe installed in paved for sizes 2” through 12”, respectively. The following conclusions were made based on the hypotheses testing of the mean winning contractor unit bid prices:

1. The average winning contractor unit bid prices of 2” PE, 4” PE, and 6” PE pipe jobs installed in non-paved areas are significantly different than their corresponding 2”, 4”, and 6”steel pipe jobs installed in non-paved areas at a confidence level of 95%.

2. The average winning contractor unit bid prices of 2”, 4”, 6”, and 8” PE pipe jobs installed

in paved areas are significantly different than their corresponding 2”, 4”, 6”, and 8” steel pipe jobs installed in paved areas at a confidence level of 95%.

3. The average winning contractor unit bid prices of 2”, 4”, 6”, and 8” PE jobs installed in

non-paved areas are significantly different than their corresponding 2”, 4”, 6”, and 8” PE jobs installed in paved areas at a confidence level of 95%.

4. The average winning contractor unit bid prices of 2”, 4”, 8”, and 12” steel pipe jobs

installed in non-paved are significantly different than their corresponding 2”, 4”, 8”, and 12” steel pipe jobs at a confidence level of 95%.

Insignificant comparisons between PE and steel pipe within the same installation location were caused by limited data and high standard deviations in the data.

7/27/2009 Page 25

3.3.3 Pipe Price Regression Results

PE pipe ranges from over a $1.50/foot cheaper than steel pipe for 2” pipe to only $0.22/foot cheaper than steel pipe for 12” pipe based on 2003 prices. The cost savings of PE pipe over steel pipe is plotted against the year purchased on Figure 4. PE pipe has been over $1.00/foot cheaper than steel pipe for sizes 2”, 4”, 6”, and 8” since 1999. Company Material Costs for completed gas main jobs were used to estimate average job material costs based on the predominant pipe size and pipe material type installed. Table 9 contains the average material costs for 2” through 12” PE and steel pipe jobs. The average pipe unit costs were subtracted from the average job material unit costs to estimate fitting unit costs. The estimated total job material costs for PE and steel pipe jobs are plotted against their corresponding pipe size installed on Figure 5 and a regression line was fit through the scatter plots. The resulting regression equation for PE pipe was used to estimate the average fitting unit cost for 12” PE of $3.56/foot. The estimated average fitting unit cost for 12” steel jobs is $5.96/foot. The estimated total job material unit costs for 12” PE and 12” ST are $12.84/foot and $16.66/foot, respectively.

Table 9

Summary of Average Contractor Installed Job Material Costs

PLASTIC PIPE STEEL PIPE

Cost Savings

in Total

Material Costs

of PL over ST

Jobs

Pipe

Size

Average Job

Material

Unit Costs

(Pipe,

Fittings,

Other)

Average

Pipe Unit

Cost

Estimated

Fitting and

Other Unit

Cost

Average Job

Material

Unit Costs

(Pipe,

Fittings,

Other

Average

Pipe Unit

Cost

Estimated

Fitting Unit

Cost

2 $1.21 $0.39 $0.82 $2.96 $2.15 $0.81 144.63%

4 $2.64 $1.33 $1.31 $5.59 $3.62 $1.97 111.74%

6 $4.03 $2.53 $1.50 $8.12 $4.24 $3.88 101.49%

8 $6.75 $4.29 $2.46 $8.73 $6.33 $2.40 29.33%

12 $12.84 $9.28 $3.56 $16.66 $10.70 $5.96 29.80%

7/27/2009 Page 26

Figure 4

Yearly Average Unit Cost Savings of

PE Pipe over Steel Pipe vs. Year Purchased

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

01/01/98 01/01/99 01/01/00 12/31/00 01/01/02 01/01/03 01/01/04

Year Purchased

Yearly Unit Cost Savings of PE Pipe

over Steel Pipe

2" Pipe 4" Pipe 6" Pipe 8" Pipe 12" Pipe

Figure 5

Average Job Material Unit Costs vs. Pipe Size Installed

for Completed Historic PE & Steel Gas Main Jobs

$0.00

$5.00

$10.00

$15.00

$20.00

0 2 4 6 8 10 12 14

Nominal Pipe Diameter (Inches)

Average Cinergy Job M

aterial

Unit Costs

Plastic Material Steel Material

Linear (Plastic Material) Linear (Steel Material)

7/27/2009 Page 27

4.0 12” MAIN REPLACEMENT COST COMPARISONS

4.1 AMRP Cost Comparison

A Least Cost Analysis was used to compare expenditure differences between the two alternative pipe types (PE and steel) for replacing the remaining 100 miles of 12” main left in the AMRP after 2004. A Least Cost Analysis restates differing series of expenditures in terms of the present worth of the expenditures. Total unit cost savings of using 12” PE pipe over 12” steel pipe is estimated below and summarized in Table 10. Information used in the Least Cost Analysis includes the following:

1. Contractor Labor Cost Savings (Based on Historic Completed Cinergy Jobs) – The predicted contractor unit labor cost savings of 12” PE pipe jobs over 12” steel pipe jobs installed in paved areas is $4.28/Ft. The predicted contractor unit labor cost savings of 12” PE pipe jobs over 12” steel pipe jobs installed in non-paved areas is $6.07/Ft. The contractor labor cost for gas main installed in paved areas makes up approximately 45% of the total direct job costs (see Table 8). The contractor labor cost for gas main installed in non-paved areas makes up approximately 55% of the total direct job costs (see Table 8).

2. Contractor Labor Cost Savings (Based on Contractor Bids) – The predicted contractor unit labor cost savings of 12” PE pipe jobs over 12” steel pipe jobs installed in paved areas is $14.51/Ft. The predicted contractor unit labor cost savings of 12” PE pipe jobs over 12” steel pipe jobs installed in non-paved areas is $8.10/Ft. The contractor labor cost for gas main installed in paved areas makes up approximately 45% of the total direct job costs (see Table 8). The contractor labor cost for gas main installed in non-paved areas makes up approximately 55% of the total direct job costs (see Table 8).

3. Material Cost Savings – The estimated unit material cost savings for a 12” PE pipe job over a 12” steel pipe job is $3.82/ft (see Table 9). The company material cost for gas main installed in paved areas makes up approximately 12% of the total direct job costs (see Table 8). The company material cost for gas main installed in non-paved areas makes up approximately 14% of the total direct job costs (see Table 8).

4. Company Labor Cost – The Company Labor costs for gas main installed in paved areas

makes up approximately 12.5% of the total direct job costs (see Table 8). The company labor cost for gas main installed in non-paved areas makes up approximately 13% of the total direct job costs (see Table 8).

5. Restoration Cost – The Restoration Costs for gas main installed in paved areas makes up

approximately 21% of the total direct job costs (see Table 8). The restoration cost for gas main installed in non-paved areas makes up approximately 6% of the total direct job costs (see Table 8).

6. Contractor Material Cost – The Contractor Material costs for gas main installed in paved

areas makes up approximately 0.5% of the total direct job costs (see Table 8). The contractor material cost for gas main installed in non-paved areas makes up approximately 2% of the total direct job costs (see Table 8).

7. Company Other Cost – The Company Other costs for gas main installed in paved areas

makes up approximately 9% of the total direct job costs (see Table 8). The company other cost for gas main installed in non-paved areas makes up approximately 10% of the total direct job costs (see Table 8).

7/27/2009 Page 28

8. Annual Maintenance Cost Savings – Cinergy does not perform any annual maintenance on

PE pipe; however, it costs Cinergy approximately $0.05/foot/year for the annual maintenance of its steel pipe system. At an interest rate of 7% and an assumed life expectancy indefinitely, the annual unit maintenance cost savings if PE pipe is used instead of steel is $0.71/Ft = 0.05/Ft/yr x (P/A, 7%, infinity).

9. Equipment Capital Costs – Installing 12” steel pipe would not require any additional capital

equipment investments. However, installing 12” PE would require Cinergy’s Gas Operations to purchase new equipment and train its employees costing approximately $500,000.

Table 10

Summary of Estimated Total Job Unit Cost Savings for

12” PE Pipe Jobs over 12” Steel Pipe Jobs

Unit Labor Costs Unit Material Costs

Other Job Unit

Costs

Maintenance

Unit Costs

Installation

Location

Savings of

12" PE

over 12"

Steel

($/Ft)

%Total

Job Cost

Savings of

12" PE

over 12"

Steel

($/Ft)

%Total

Job Cost

Savings of

12" PE

over 12"

Steel

($/Ft)

%Total

Job Cost

Savings of 12"

PE over 12"

Steel

($/Ft)

Total Unit

Cost

Savings

($/Ft)

Based on Historic Contractor Installed Job Data

Paved Area $4.28 45.0% $3.82 12.0% $6.11 43.0% $0.71 $14.92

Non-Paved Area $6.07 55.0% $3.82 14.0% $4.44 31.0% $0.71 $15.04

Estimated Average Savings = $14.98

Based on Historic Winning Contractor Bid Data

Paved Area $14.51 45.0% $3.82 12.0% $13.83 43.0% $0.71 $32.87

Non-Paved Area $8.10 55.0% $3.82 14.0% $5.36 31.0% $0.71 $17.99

Estimated Average Savings = $25.43

The estimated costs savings in using 12” PE instead of 12” steel for 100 miles of main replacement is as follows: Estimate Based on Contractor Installed Job Data

Savings = [$14.98/ft * 100 miles * 5,280 ft/mile] - $500,000 = $7.4 million

Estimate Based on Winning Contractor Bid Data

Savings = [$25.43/ft * 100 miles * 528,000-ft/mile] - $500,000 = $12.9 million

The minimum amount of 12” PE pipe that should be installed to recoup the equipment start-up cost of $500,000 is approximately 10 miles (12” Pipe Length = $500,000 / ($14.98/ft) = 33,378 feet = 6.3-miles, use 7 miles). Approximately $70,000 or more in total AMRP job costs could be saved for each additional mile of 12” PE used instead of 12” steel over the initial 7 miles.

7/27/2009 Page 29

4.2 Industry Historic Cost Savings of 12” PE over 12” Steel

The following paragraphs summarize some historic 12-inch diameter gas pipe installation costs as reported by different utility companies across the United States. Carnegie Natural Gas Co. of Pennsylvania reported a 9% savings in installation costs by trenching methods in rural settings by using 12-inch PE over 12-inch steel. However, they also reported that 12-inch steel is slightly cheaper than 12-inch PE to install by trenching in urban areas (Ref. 8). Consolidated Natural Gas Company (CNG) of Pennsylvania evaluated the cost savings of using 10-inch and 12-inch diameter PE pipe over the same size steel main in 1998 (Ref. 9). Historic unit installation costs from 5 contractors, that had a history of installing large diameter PE pipe, were evaluated. Table 8 below summarizes the average contractor costs and average savings for the pipe installation ranges in the CNG evaluation.

Table 11

Summary of CNG Contractor Unit Labor Costs for 12” PE and 12” Steel

Length Range Average

Contractor Cost

to Direct Bury

12” PE

Average

Contractor Cost

to Direct Bury

12” Steel

Average Unit

Cost Savings

Savings on

Direct Bury of

12” PE over

12” Steel

0 to 200 feet $20.53 $33.54 $13.01 63%

200 to 500 feet $16.53 $28.21 $11.68 71%

Over 500 feet $13.97 $21.02 $7.05 50%

Averages $17.01 $27.59 $10.58 62%

Lone Star Gas Company of Texas estimated a costs savings of 28% ($22.98/ft for PE versus $31.86/ft for steel) by installing 12-inch diameter PE main over 12-inch steel for 21.9 miles of installed pipe in rural areas (Ref. 18). National Fuel Gas Distribution Corporation of New York began installing 12” MDPE SDR 13.5 in 1987 by insertion and in 1990 began direct burial of the pipe. The average total installed cost of 12” MDPE was $71/foot (based on 2 jobs in urban areas) and the average total installed cost of 12” steel was $98/foot (based on 2 jobs in urban areas and 1 job in rural area). This is a total job savings of 38%. Approximately 90% of National Fuel Gas main installations are installed by their company personnel (Ref. 4). Shenandoah Gas Company of Winchester, Virginia, a subsidiary of Washington Gas, installed 12” PE in 1989 and realized a net savings of 10% over similar 12” steel projects. Washington Gas Light Company of Washington, D.C., began installing 12” PE in 1986. Initial savings of 12” PE over 12” steel were reported as 38% for contractor labor and 27% for total job costs. Between 1988 and 1989, Washington Gas installed approximately 71,000 feet of 12” PE and 210,000-feet of 12” steel. Unit total installation costs in averaged $46.86/foot for 12” PE and $75.37/Ft for 12” steel for a difference in cost of 38% (Ref.’s 14, 29, 30, 31). Table 12 summarizes the average contractor and total job costs for the steel and PE jobs reported in the previous paragraphs, and the cost savings of PE jobs over the steel jobs.

7/27/2009 Page 30

Table 12

Summary of Industry Reported Unit Installation Cost Savings of 12” PE over 12” Steel

Natural Gas Company Year of

Installation

Location Contractor

Labor

Savings

Total Job

Savings

Lone Star Gas Company 1989 Rural Area 28%

Washington Gas Light Company

1986 1989

Mixed Area Mixed Area

38%56%

27% 38%

Shenandoah Gas Company 1989 Mixed Area 10%

National Fuel Gas Distribution Corp 1991 Rural AreaCongested Area

--- 38%

Carnegie Natural Gas Company 1993 Rural AreaCongested Area

9% 0%

Consolidated Natural Gas Company 1998 Rural AreaCongested area 62%

New Jersey Natural Gas

(From 2003 AGA survey on 12” PE)

1998 Mixed 20%

Cinergy Corp

(Estimated Costs from Section 4.1)

2003 Rural AreaCongested Area

17%10%

20% 15%

RURAL AVERAGE = 35% 22%

7/27/2009 Page 31

5.0 RECOMENDATIONS / CONCLUSIONS

The preceding analyses of Cinergy’s historic completed job cost data and contractor bid data has shown that the use of PE pipe for gas mains instead of steel pipe has had significant cost savings for installations using 8” PE and smaller, and could have significant cost savings for installations using 12” PE. Table 13 below summarizes the estimated contractor labor cost savings and total job savings of contractor installed PE pipe jobs over contractor installed steel pipe jobs based on completed historic jobs performed for Cinergy. The estimated total job savings based on historic jobs are plotted on Figure 6. Table 14 below summarizes the estimated contractor labor cost savings and total job savings of contractor installed PE pipe jobs over contractor installed steel pipe jobs based on contractor bids for Cinergy main replacements. The estimated total job savings based on contractor bids are plotted on Figure 7.

Table 13 - Summary of Savings of PE Pipe Jobs over Steel Pipe Jobs based on

Actual Contractor Installed Jobs

Non-Paved Areas

Estimated Contractor

Labor Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Paved Areas

Estimated Contractor

Labor Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Non-Paved Areas

Estimated Total Job

Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Paved Areas

Estimated Total Job

Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Pipe

Size

2 31.59% 47.61% 42.95% 57.11%

4 25.05% 29.47% 37.48% 40.35%

6 21.63% 20.85% 34.63% 32.67%

8 19.52% 15.83% 21.57% 18.33%

12 17.07% 10.20% 20.45% 14.79%

**Values for 12” pipe are projected.

Table 14 - Summary of Savings of PE Pipe Jobs over Steel Pipe Jobs based on

Actual Awarded Contractor Bids

Non-Paved Areas

Estimated Contractor

Labor Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Paved Areas

Estimated Contractor

Labor Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Non-Paved Areas

Estimated Total Job

Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Paved Areas

Estimated Total Job

Savings

of PE Pipe Jobs

over Steel Pipe Jobs

Pipe

Size

2 68.80% 27.03% 76.05% 35.07%

4 55.11% 33.90% 63.90% 43.37%

6 46.06% 39.13% 56.53% 48.91%

8 39.63% 43.24% 37.06% 40.22%

12 31.11% 49.29% 30.67% 43.37%

**Values for 12” pipe are projected.

7/27/2009 Page 32

Figure 6

Estimated Total Job Savings Based on Historic Contractor Jobs of

PE Pipe Installations over Steel Pipe Installations

In Paved & Non-Paved Areas

0%

10%

20%

30%

40%

50%

60%

0 2 4 6 8 10 12 14

Nominal Pipe Diameter (Inches)

Estimated Contractor Labor

Savings

Paved Non-Paved Linear (Paved) Linear (Non-Paved)

Figure 7

Estimated Total Job Savings Based on Contractor Bids of

PE Pipe Installations over Steel Pipe Installations

In Paved & Non-Paved Areas

20%

30%

40%

50%

60%

70%

80%

0 2 4 6 8 10 12 14

Nominal Pipe Diameter (Inches)

Estimated Total Job

Savings

Paved Non-Paved Linear (Paved) Linear (Non-Paved)

7/27/2009 Page 33

The cost savings of PE pipe installations over steel pipe installations are due to lower contractor costs, lower material costs, and low maintenance costs; however, most of the savings is attributed to lower contractor costs. Contractor installed 12” MDPE pipe jobs could cost an estimated 15% to 20% less than contractor installed 12” steel pipe jobs based on the analyses of Cinergy’s historic contractor installed cost data. Contractor installed 12” MDPE pipe jobs could cost an estimated 31% to 43% less than contractor installed 12” steel pipe jobs based on the analyses of Cinergy’s contractor bid data. The estimated savings of 12” PE installations over 12” steel pipe installations are reasonable when compared to the savings of 9% to 38% reported by different utility companies. It is estimated that Cinergy could recover the equipment start-up costs, necessary for installing 12” PE, if it could install at least 7 miles of 12” PE instead of 12” steel in the AMRP. Although 12” PE pipe installations appear to be more economical than 12” steel pipe installations, job site conditions and the desired operating pressure must be considered before selecting the pipe material. 12” steel pipe has a longer track record than the relatively new (since mid 1980’s) 12” PE pipe. Table 15 below lists some of the pros and cons of PE pipe over steel pipe that may help in choosing between PE and steel pipe.

Table 15 - Pros and Cons of Using PE Gas Main

PROS CONS

PE Pipe does not require corrosion maintenance or reporting

PE pipe capacity is lower than steel pipe of the same nominal pipe size and at a given pressure differential due to the thicker walls of PE pipe.

PE pipe costs less per foot than steel pipe Additional capital costs required for the purchase of equipment necessary to install and maintain pipe

PE pipe contractor unit installation costs are less than those of steel pipe PE pipe more susceptible to third party damage

PE pipe easier to move & store PE pipe difficult to locate if tracer wire broken or missing

PE pipe is chemically resistant to organics found in natural gas

PE pipes proven track record is not as long as that of steel pipe

PE pipe is abrasion resistant, no protective coatings to repair if scratched

Some state agencies haven’t accepted the use of PE pipe within roadway limits

PE pipe is flexible allowing it to be inserted. The flexibility sometimes eliminates fittings. Steel pipe can operate at higher pressures.

PE pipe fusing is a mechanical process; whereas, steel pipe welding is more technical.

7/27/2009 Page 34

6.0 REFERENCES

1. Applied Regression Analysis and other Multivariable Methods – Second Edition, by

Kleinbaum, Kupper, & Muller of U. of North Carolina at Chapel Hill. Published by PWS-KENT Publishing Co., Boston, 1988.

2. Civil Engineering Reference Manual, 6

th Ed, by Michael R. Lindenburg, Professional

Publications, 1992. 3. Code of Federal Regulations Title 49, Part 192.121, by United States Department of

Transportation. 4. Cost Effectiveness of Large Diameter PE Pipe, by Mark J. Hooper of National Fuel Gas

Distribution Corporation, 1992. 5. Driscopipe System Design Manual, by Philips Driscopipe, Richardson, Texas, 1991.

6. Driscoplex 6500 PE 2406 Polyethylene Piping, by CP Chem Performance Pipe. Bulletin PP300, June, 2001.

7. Eight Inch Polyethylene Pipe, Cinergy Gas Engineering internal report prepared by Dennis Glenn and Don Schrantz, May 1994.

8. Evaluating the Cost Effectiveness of Steel vs. Polyethylene Large Diameter Pipe, by S.J. Davis of Carnegie Natural Gas. Published by American Gas Association Gas Energy Rev. 21, pp. 7-10, 1993.

9. Evaluation of Large Diameter (10” and 12”) PE Mains, by Consolidated Natural Gas Company, December 1998.

10. Experience with Large Diameter Polyethylene Pipe at Washington Gas Light Company, by Karl M. Gunther. Published in PE Pipe News Vol. 9, No. 1, by Gas Research Institute, March 1990.

11. Foundation Design, Principles and Practice, by Donald P. Coduto, Prentice Hall Publishing,

1994.

12. Gas Distribution Self-Study Course, by Gas Technology Institute, Des Plaines, Illinois, 2000.

13. Guidelines for the Design of Buried Steel Pipe, by ASCE and FEMA for the American Lifelines Alliance; July, 2001.

14. Gunther, Karl - Personal Communication

15. Internal Fusion Bend Resistance, by CP Chem Performance Pipe. Technical Note PP828-TN, Sept., 2002.

16. Large Diameter PE Gas Piping Systems, Engineering Technical Note PM-94-4-1 by American Gas Association, September, 1994.

7/27/2009 Page 35

17. Large Diameter PE Pipe Damage Investigation, by Flemming Sorensen of National Gas Distribution Corporation. Published by American Gas Association, 89-DT-51, 1989.

18. Large Diameter Polyethylene Gas Mains, by Donald R. Raney of Lone Star Gas Company. Published by American Gas Association, 89-DT-58, 1989.

19. PE Pipe Clears Numerous Hurdles to Increase Acceptance, by Kenneth G. Behrens, VP Shenandoah Gas Company, Published in Pipe Line Industry, October, 1992.

20. Pipeline Crossings of Railroads and Highways, by H.E. Stewart, T.D. O’Rourke, and A.R. Ingraffea, of Cornell University. Published in 1991 American Gas Association Proceedings, Paper 91-DT-60.

21. Pipe Line Rules of Thumb Handbook, 2nd Edition, by E.W. McAllister. Gulf Publishing

Company, Houston, Texas, 1988.

22. Polyethylene Pipe Squeeze-Off, by CP Chem Performance Pipe. Technical Note 801, May, 2002.

23. Principles of Foundation Engineering, 3rd Ed, by Braja Das, PWS Publishing, 1995.

24. Squeezing Off Large PE Pipe, by Karl M. Gunther, Materials Testing Manager of Washington Gas, Springfield Virginia. Published in Pipe Line Industry, February, 1991.

25. Steel Pipe Design and Installation, by American Water Works Association, AWWA No. M11, 1964.

26. Stress on Buried Pipelines, by Roy Daines of Cincinnati Gas & Electric Company. Published by American Gas Association, 91-DT-37, 1991.

27. Surface Restoration with Low Strength Mortar, by KYTC District 6 Permits Office.

28. The Influence of Installation Conditions on the Deformation of Buried PE Pipes, by P.W.M. Wichers Schreur and F. Mutter of GASTEC N.V. Published by American Gas Association, 1990.

29. Usage of Large Diameter Polyethylene Pipe at Washington Gas Light Company, by Karl M. Gunther, Materials Testing Manager of Washington Gas, Springfield Virginia. Published in 11th PE Fuel Gas Pipe Symposium Proceedings, 1989.

30. Use of 8” and 12” PE Pipe at Washington Gas Light Company, by Glenn Decint of Washington Gas Light Company; October 1988.

31. Washington Gas Leads Nation in Use of Large Diameter Polyethylene Pipe for Gas

Distribution, by H.W. Long. Published in DriscopipeLines, Volume 5, Issue 1, First Quarter 1999.

32. Yellow Pipe Meets Fast-Growing Utility’s Demand, by Al Flickinger and Ray Hartman. Published in Trenchless Technology, August 1997.

7/27/2009 Page 36

33. 12” PE Main Installation – Morris County, New Jersey, by Keith Sturn of New Jersey Natural Gas Company. Published in American Gas Association 2000 Operating Section Proceedings.