1. Page 1 Reducing Emissions, Increasing Efficiency, Maximizing Profits Part 2: Is Recovery Profitable? p Savings associated with pressure reduction p Costs of manual and automated regulation p Economics of options p Discussion Questions

2. Page 2 Reducing Emissions, Increasing Efficiency, Maximizing Profits Steps to Identify Opportunities Identify Excessive Leakage Characteristics Estimate Potential Pressure Reduction Estimate Volume of Gas Saved and O&M Savings Estimate Volume of Gas Saved and O&M Savings Summarize Total Savings Compare the Cost of Pressure Reduction Options Conduct Economic Analysis

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

4. Page 4 Reducing Emissions, Increasing Efficiency, Maximizing Profits Set-Point/Demand Relationship p Estimate your system DR set-points characteristics from peak demand and minimum meter calibration condition IDEAL SET POINT AS A FUNCTION OF AMBIENT AIR TEMPERATURE

5. Page 5 Reducing Emissions, Increasing Efficiency, Maximizing Profits Pressure Reduction Using Manual Adjustment

6. Page 6 Reducing Emissions, Increasing Efficiency, Maximizing Profits Pressure Reduction Using Automatic Adjustment

7. Page 7 Reducing Emissions, Increasing Efficiency, Maximizing Profits Estimate Volume of Gas Savings p Estimate gas leakage p Estimate reduced gas leakage u One Partner found leakage rate in their low pressure system to be linearly proportional to system pressure u Apply percent pressure reduction to leakage rate to estimate gas savings

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

9. Page 9 Reducing Emissions, Increasing Efficiency, Maximizing Profits 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. Page 10 Reducing Emissions, Increasing Efficiency, Maximizing Profits Compare the Cost of Pressure Reduction Options p Increase frequency of manual DR adjustment u Primary cost is labor p Install automatic control systems u Capital costs: system hardware u Operating costs: communications and power

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

12. Page 12 Reducing Emissions, Increasing Efficiency, Maximizing Profits Is Recovery Profitable with Manual Adjustment? p Manual DR adjustment, annual to quarterly

13. Page 13 Reducing Emissions, Increasing Efficiency, Maximizing Profits Compare the Cost of Pressure Reduction Options Based on GRI-93/0039 and “Methods and Benefits for Automation of DRs

14. Page 14 Reducing Emissions, Increasing Efficiency, Maximizing Profits Example: Automation Capital Costs

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

16. Page 16 Reducing Emissions, Increasing Efficiency, Maximizing Profits p Automated DR adjustment Is Recovery Profitable with Automated Adjustment?

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