"The regulations shall require an operator to conduct a risk analysis and adopt an integrity management program within a time period prescribed by the Secretary, ending not later than 24 months after such date of enactment. Not later than 18 months after such date of enactment, each operator of a gas pipeline facility shall begin a baseline integrity assessment described in paragraph (3)."

41 Smart pigging is the term that is used to refer to the process of sending a data gathering instrument through an operating pipeline to measure steel pipe wall thickness, and to look for corrosion, metal loss, voids, defects, and dents. PG&E notes some pipelines may have to be retrofitted to allow for smart pigging, and that there may be cost uncertainties associated with this retrofitting work, especially in urban areas. 42 Direct assessment is the industry process of verifying pipeline integrity by analyzing physical data on the pipeline (age, type of girth welds, wall thickness, coating, operating safety factor) and the results of electronic surveys and tests taken on the ground above the pipeline. Physical excavations of various segments of the pipeline are performed in order to validate the accuracy of the direct assessment data and model. 43 If PG&E's methodology is accepted, PG&E's amount should be reduced by $12,700 based on recorded 2002 data. (Ex. 52, p. 8, fn. 11.) 44 The average for these three years was $250,900. 45 Hereinafter referred to as the "Pipeline Safety Act." 46 It is our intent that PG&E's forecast O&M expense of $4,415,800 for 2004 in 2001 dollars, adjusted for 2004 dollars using the escalation factors, shall be used to calculate the adjustment. The revenue requirement that we adopt today for 2004 shall serve as the maximum cap. That is, should the O&M adjustment, or other adjustments made in today's decision, result in a higher number than what we have calculated, which would increase the revenue requirement amount, the adopted revenue requirement amount shall not be changed. Should the adjustments result in a lower revenue requirement amount, the adopted revenue requirement amount shall apply.

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