Interpretation Response #PI-19-0002
Below is the interpretation response detail and a list of regulations sections applicable to this response.
Interpretation Response Details
Mr. Mark Al Strother
Executive Vice President and
Chief Operating Officer
Cal Farley's Boys Ranch
600 SW 11th Avenue
Amarillo, TX 79101
Dear Mr. Strother:
In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), you requested an interpretation of 49 Code of Federal Regulations (CFR) Part 191. Specifically, you requested an interpretation of § 191.3 as it relates to a master meter system.
You described the Cal Farley's Boys Ranch (Ranch) as an-unincorporated community in northeastern Oldham County, Texas. You stated that as a non-profit organization, the purpose of the ranch is to provide a stable living and learning environment to nurture children who have experienced qualifying challenges that would stifle their potential. The citizen-residents of the Ranch fall into two categories, employees of the Ranch and opportunity-challenged youth. All personnel that reside on the Ranch are paid employees living in provided homes. The Ranch does not rent living space to any individual or family.
You described the Ranch's gas system as an odorized natural gas pipeline purchased through a master meter that enters a network of mains and services to serve gas deliveries to the campus's facilities. All associated piping and appliances downstream of the purchase meter is owned, operated, and maintained by Cal Farley's Boys Ranch. Gas is delivered through the mains and services to provide energy for central air conditioning, central heating, water heating, and cooking appliances for the school education and administrative buildings, gymnasiums, cafeterias, living quarters, and out-buildings, as applicable.
You asked PHMSA to provide insight on the regulatory status of the Ranch and you have provided arguments that suggest you believe the Ranch is unique and distinct from a master meter system. Based on the limited information provided in your request, PHMSA asked follow-up questions and you provided the responses on June 7, 2019.1
PHMSA question - Is the Cal Farley's Boys Ranch gas pipeline system operated and maintained by a third party?
Your response – No.
PHMSA question - Does the Ranch sell gas to a tenant (coffee shop, restaurant, etc.)? Your response – No.
PHMSA question - Are the employee tenants of the Ranch paying for the gas directly or indirectly? That is, does the Ranch pay the employee-tenants less than what it should pay than if the employees where to live outside of the Ranch?
Your response – No, employee-tenants of the Ranch do not pay for gas directly or indirectly. Cal Farley would only reduce an employee-tenant's pay for living on the Ranch when their position is not absolutely required to live on the Ranch. We do not meter for utilities, so whether a house is occupied or not, the utility usage would be about the same.
PHMSA question – Do all employees live on the Ranch? If not, is there a pay difference between employees living on the Ranch and employees living off the Ranch?
Your response – No, all employees do not live on the Ranch. Employees living off the Ranch do not have the option to live on the Ranch.
Section 191.3 defines a master meter system as a pipeline system for distributing gas within, but not limited to, a definable area, such as a mobile home park, housing project, or apartment complex, where the operator purchases metered gas from an outside source for resale through a gas distribution pipeline system. The gas distribution pipeline system supplies the ultimate consumer who either purchases the gas directly through a meter or by other means, such as by rents.
To determine whether Cal Farley's Boys Ranch meets the definition of a master meter system under 49 CFR § 191.3 and, therefore, is subject to the requirements of 49 CFR Parts 191 and 192, we must determine if the pipeline facilities are delivering gas to the ultimate consumer who pays for the gas directly, via a bill, or pays for the gas indirectly through other means, such as rents.
In previous interpretations, PHMSA has stated that an entity would not meet the definition of a master meter system if it were only "using the gas delivered through its pipeline to provide heat or hot water to its buildings."2 In that instance, the entity would be the consumer of the gas. PHMSA went on to say that if the entity provides gas to consumers, such as concessionaires, tenants, or others, it is engaged in the distribution of gas, and the persons to whom it is providing gas would be considered customers even though they may not be individually metered.3
Based on your responses to PHMSA's questions, it appears the Cal Farley's Boys Ranch would be the consumer of gas since it does not provide gas to concessionaries or tenants. Rather, Cal Farley's Boys Ranch uses the gas to provide energy to the various buildings it owns. Keep in mind that this response letter reflects the agency's current application of the regulations to the specific facts you presented. If your response to any of the questions PHMSA posed changes, then the regulatory status of the pipeline system for the Cal Farley's Boys Ranch may change.
If we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.
John A. Gale
Director, Office of Standards
1 The questions and responses have been modified for clarity.
2 Mr. Don A. Ledversis, Pipeline Safety Engineer, Rhode Island Division of Public Utilities & Carriers, PI-03-0101, February 14, 2003.