Maximizing Savings through Pressure Reduction Strategies

1. Part 2: Is Recovery Profitable? • Savings associated with pressure reduction • Costs of manual and automated regulation • Economics of options • Discussion Questions

2. Steps to Identify Opportunities Identify Excessive Leakage Characteristics Estimate Potential Pressure Reduction Estimate Volume of Gas Saved and O&M Savings Summarize Total Savings Compare the Cost of Pressure Reduction Options Conduct Economic Analysis

3. Excessive Leakage Characteristics • Determine current operating characteristics of your system • Frequency and method of setting pressures • Objective is to achieve the right balance between savings and costs • Older systems with cast iron lines are more leak-prone and can benefit from continuous pressure adjustment • Newer systems with plastic lines are less leak-prone and may be more suitable for manual adjustment

4. IDEAL SET POINT AS A FUNCTION OF AMBIENT AIR TEMPERATURE Set-Point/Demand Relationship • Estimate your system DR set-points characteristics from peak demand and minimum meter calibration condition

5. Pressure ReductionUsing Manual Adjustment

6. Pressure ReductionUsing Automatic Adjustment

7. Estimate Volume of Gas Savings • Estimate gas leakage • Estimate reduced gas leakage • One Partner found leakage rate in their low pressure system to be linearly proportional to system pressure • Apply percent pressure reduction to leakage rate to estimate gas savings

8. Maintenance Cost Reduction • Estimate Maintenance Cost • Average of 56 leaks repaired / mile / year • Average leak repair cost reported by Gas STAR partners is $1,010 / leak repair (based on data from 19 companies) • Average leak repair cost reported by 1995 GRI/GTI study is $1000 / repair (including costs to pinpoint leak and evacuate pipe) • Estimate Repair Savings • Percent leak reduction is linearly proportional to percent pressure reduction • 50% factor applied to relationship between % reduction in leaks and % reduction in system pressure

9. Summarize Total Savings Based on a hypothetical system delivering 1 Bcf/yr through 50 miles of cast iron, 25 miles of protected steel, 25 miles of plastic pipe; 10 district regulators; 10 low pressure points.

10. Compare the Cost of Pressure Reduction Options • Increase frequency of manual DR adjustment • Primary cost is labor • Install automatic control systems • Capital costs: system hardware • Operating costs: communications and power

11. Manual Adjustment Costs • Total implementation cost • Additional set point changes per regulator (3) • Number of visits per set point change (4) • Hours per visit (0.5) • Labor cost ($60/hr) • Number of regulators adjusted (10) • Manual adjustment cost example • Implementation cost = 3 x 4 x 0.5 x $60 x 10 • Total cost = $3,600/yr

12. Is Recovery Profitable with Manual Adjustment? • Manual DR adjustment, annual to quarterly

13. Compare the Cost of Pressure Reduction Options Based on GRI-93/0039 and “Methods and Benefits for Automation of DRs

14. Example: Automation Capital Costs

15. Example: Automation Operating Costs • Power Cost • DR and LPP power requirements (10 W) • Electricity cost ($0.06/kWh) • System annual hours of operation (8,760) • Number of DRs and LPPs (10 + 10) • Example cost = $105/year • Communication Cost • Number of calls to reset controllers (2 per day) • Number of set point adjustments (365 days/year) • Cost per call ($0.10/call) • Number of DRs and LPPs (10+10) • Example cost = $1,460/year • Total Operating Cost = $1,565 per year

16. Automated DR adjustment Is Recovery Profitable with Automated Adjustment?

17. Discussion Questions • To what extent are you implementing this opportunity? • Can you suggest other alternatives? • What additional information would you need for a better analysis of this opportunity? • What are the barriers (technological, economic, lack of information, regulatory, focus, manpower, etc.) that are preventing you from implementing this practice?