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Gas Distribution Infrastructure
Pipeline Replacement and Upgrades Cost Recovery Issues and Approaches

In April of 2011, Secretary of Transportation Ray LaHood released a call to action regarding repair and replacement activities for existing natural gas distribution infrastructure. This report provides a context for policy discussions surrounding cost recovery for these efforts. It discusses how innovative cost recovery mechanisms can serve the public interest in the short and the long run, including both operational and economic benefits. Finally, the report notes that 46 mechanisms adopted in 18 jurisdictions reflect LDC-specific circumstances and missions the increased capital requirements of replacing and enhancing aging infrastructure, while preserving the fundamental elements of the traditional regulatory compact. The majority of these programs have been implemented within the last five years, indicating the influence of general industry trends and the heightened focus on pipeline safety and the contribution of pipeline replacement efforts to safety and reliability.

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