EASTERN GAS TRANSMISSION AND STORAGE, INC. — Notice of Probable Violation

party submissionOfficial PDF120091006_ Supplement to Petition For Reconsideration_05262011.pdf#

party submissionOfficial PDF120091006_Operator Petition for Reconsideration_02232011.pdf#

party submissionOfficial PDF120091006_Operator Response_07292009.pdf#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 1Official PDFU.S. Department 820 Bear Tavern Road. Suite 306 of Transportation West Trenton, N.J. 08628 Pipeline and Hazardous Materials Safety Administration NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED June 26, 2009 Mr. Jeff Barger Vice President, Operations Dominion Transmission, Inc. 445 West Main Street Clarksburg, WV 26301 CPF 1-2009-1006 Dear Mr. Barger: From July to November 2008, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), the New York Public Service Commission, and the West Virginia Public Service Commission pursuant to Chapter 601 of 49 United States Code inspected your records and pipeline facilities in the states of West Virginia and Pennsylvania. As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are:#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 21. § 192.481 Atmospheric corrosion control: Monitoring (a) Each operator must inspect each pipeline or portion of pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion, as follows: If the pipeline is located: Then the frequency of inspection is: Onshore At least once every 3 calendar years, but with intervals not exceeding 39 months Offshore At least once each calendar year, but with intervals not exceeding 15 months Under § 192.481, DTI is required to inspect each portion of pipeline that is exposed to the atmosphere at least once every three calendar years for onshore pipe for evidence of atmospheric corrosion. DTI must perform these inspections at intervals not exceeding 39 months. However, DTI failed to inspect the run #1 back-up fuel gas regulator station near valve FGV-25 at the Oakford Compressor Station. The piping had surface rust and pits measuring up to 80 mils in depth on a 5”x 8” area on top of the run. Also, atmospheric corrosion was found on the dehydrator dry gas header outlet with pits measuring approximately 110 mils in depth at the ground to air transition. Although DTI performed an atmospheric corrosion inspection in 2007, it failed to identify these areas of atmospheric corrosion. 2. § 192.605 Procedural manual for operations, maintenance, and emergencies (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least one each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (1) Operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and Subpart M of this part. (2) Controlling corrosion in accordance with the operations and maintenance requirements of Subpart I of this part. 2#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 3DTI failed to follow its corrosion control maintenance requirements requiring drips to be blown at least annually. DTI’s Standard Operating Procedures (SOP) Section 070/Corrosion Control, SOP 15/Internal Corrosion states that all drips should be blown at least once each calendar year. Maintenance records of the drips in the Oakford Fifth Sands and Murrysville Storage Pools show that a total of 103 and 330 drips, respectively, from 2003 to 2007 were not blown annually to remove fluids which can be corrosive to steel pipelines. Additionally, DTI has documented 69 drips which have not been blown because they cannot be accessed, cannot be blown and/or are not piped up. These 69 additional drips are in a DTI schedule to be corrected within 9 years. 3. § 192.709 Transmission lines: Record keeping. Each operator shall maintain the following records for transmission lines for the periods specified: c) A record of each patrol, survey, inspection, and test required by subparts L and M of this part must be retained for at least 5 years or until the next patrol, survey, inspection, or test is completed, whichever is longer. DTI failed to provide records for the required last 5 years (2003-2007) to demonstrate that annual capacity calculations were performed for pressure relieving devices at five compressor stations (Harrison, Ellisburg, Stateline, Oakford and JB Tonkin) as required by §192.731 and §192.743. DTI failed to provide to the PHMSA inspection team, during headquarter and field inspections, compressor stations records showing the capacity review and calculations for their relief devices. Although DTI reviews the initial capacity calculations as permitted by §192.743(b) in order to meet the annual capacity determination requirements for relief devices, DTI is still required to demonstrate that the parameters have not changed to avoid subsequent calculations. DTI could not provide records to demonstrate this required review of the parameters was performed. 4. § 192.739 Pressure limiting and regulating stations: Inspection and testing. (a) Each pressure limiting station, relief device (except rupture discs), and pressure regulating station and its equipment must be subjected at intervals not exceeding 15 months, but at least once each calendar year, to inspections and tests to determine that it is— (1) In good mechanical condition; (2) Adequate from the standpoint of capacity and reliability of operation for the service in which it is employed; 3#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 4(3) Except as provided in paragraph (b) of this section, set to control or relieve at the correct pressure consistent with the pressure limits of §192.201(a); and (4) Properly installed and protected from dirt, liquids, or other conditions that might prevent proper operation. During PHMSA’s field inspection, DTI technicians stated that some relief devices had not been inspected and no records of inspection were in the DTI’s database. The following relief valves were not inspected at the required intervals for the period of 2003-2007: 1. Ellisburg Compressor Station fuel gas bottle inlet 1st cut regulator (Location ID CSN6361) has a regulator but the overpressure protection was not listed as inspected 2. Ellisburg Compressor Station relief valve (2” Axelson serial number 632280) 3. Stateline Compressor Station fuel gas bypass relief valve 5. §192.743 Pressure limiting and regulator stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in §192.739(b), the capacity must be consistent with the pressure limits of §192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations (b) If review and calculations are used to determine if a device has sufficient capacity, the calculated capacity must be compared with the rated or experimentally determined relieving capacity of the device for the conditions under which it operates. After the initial calculations, subsequent calculations need not be made if the annual review documents that parameters have not changed to cause the rated or experimentally determined relieving capacity to be insufficient. DTI failed to conduct adequate annual reviews of pressure relieving devices to determine sufficient capacity at the five pressure limiting station devices noted below. DTI only physically checked the relief devices for pressure set point and operation. DTI did not determine adequate relief capacity. DTI had no documentation showing capacity calculations for the relief devices including comparison to rated relief design at their facilities needed for the required annual relief capacity determination. 1) Stateline Compressor Station location, feed line #16 with 1st and 2nd regulator stations with 2” Welmark relief valve 4#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 52) Stateline Compressor Station location Line #24 supplied by 10” dual port regulator with overpressure protection provided by 8”relief valve having a 6” inlet pipe 3) Oakford Region, Gas sales to Peoples Gas having a 6”x 8” Axelson relief valve 4) Oakford Region, Springdale meter and regulator station with relief valve overpressure protection 5) Mockingbird Hill Station #426 regulator and relief assembly 6. § 192.225 Welding procedures. (a) Welding must be performed by a qualified welder in accordance with welding procedures qualified under section 5 of API 1104 (incorporated by reference, see §192.7) or section IX of the ASME Boiler and Pressure Vessel Code “ Welding and Brazing Qualifications” (incorporated by reference, see §192.7) to produce welds meeting the requirements of this subpart. The quality of the test welds used to qualify welding procedures shall be determined by destructive testing in accordance with the applicable welding standard(s). (b) Each welding procedure must be recorded in detail, including the results of the qualifying tests. This record must be retained and followed whenever the procedure is used. During the field inspection of the Cove Point MD expansion project, DTI representatives indicated that there were no welding repair procedures on site in accordance with welding procedures qualified by §192.225; and, that welding repairs had been made to the DTI project facilities without having qualified procedures. 7. § 192.179 Transmission line valves. (c) Each section of a transmission line, other than offshore segments, between main line valves must have a blowdown valve with enough capacity to allow the transmission line to be blown down as rapidly as practicable. Each blowdown discharge must be located so the gas can be blown to the atmosphere without hazard and, if the transmission line is adjacent to an overhead electric line, so that the gas is directed away from the electrical conductors. 5#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 6DTI did not determine if the new 36” transmission line being installed for the Cove Point, MD expansion project could be blown down as rapidly as practicable as required by §192.179(c). DTI indicated that the Cove Point, MD expansion project blow-down design was made to match the blow-down design of the existing Cove Point parallel 30” transmission line. DTI did not take into consideration the larger size (36”) of the new main, and just assumed the existing 30” transmission line blow-down capacity would be sufficient. 8. § 192.163 Compressor stations: Design and construction. (e) Electrical facilities. Electrical equipment and wiring installed in compressor stations must conform to the National Electrical Code, ANSI/NFPA 70, so far as that code is applicable. DTI did not conform to the National Electrical Code requirements. At the time of the inspection, DTI transformers adjacent to main compressor building at Lightburn Station did not appear to be tied into a continuous grounding circuit in explosion-proof boxes, in accordance with NFPA 70 (2005) National Electrical Code, Article 250, for the following equipment: (1) #5 engine pre-lube pump starter (2) #4 engine pre-lube pump starter (3) #3 engine pre-lube pump starter. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $195,100 as follows: Item number PENALTY Item 1 $30,500 Item 2 $80,500 Item 3 $16,800 Item 4 $36,800 Item 5 $30,500 Warning Items 6#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 7With respect to Items 6, 7 and 8, we have reviewed the circumstances and supporting documents involved in this case and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to promptly correct these items. Be advised that failure to do so may result in Dominion Transmission, Inc. being subjected to additional enforcement action. Proposed Compliance Order With respect to Item 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Dominion Transmission, Inc. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 1-2009-1006 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Byron E. Coy, P.E. Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 7#

120091006_NOPV-PCP-PCO_06262009_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Dominion Transmission, Inc.(DTI) a Compliance Order incorporating the following remedial requirements to ensure the compliance of DTI with the pipeline safety regulations: 1. In regard to Item Number 2 of the Notice, DTI must provide documentation that substantiates that all the drips in the Oakford Fifth Sands and Murrysville Storage Pools that can currently be blown down have been blown down within 180 days of date of final order. 2. In reference to Item Number 2, the 69 documented drips which have not been blown per DTI standard operating procedures (SOP), DTI must develop and execute a plan to find, make accessible, and modify as needed for drip blowing operations, those 69 identified drips within 365 days of date of final order. 3. DTI shall submit the results of the Proposed Compliance Order items above to the Director, Eastern Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, 4. DTI shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 8#

120091006_Closure Letter_12202011_text.pdf, page 1Official PDFU.S. Department 820 Bear Tavern Road, Suite 103 Of Transportation West Trenton, NJ 08628 Pipeline and 609.989.2171 Hazardous Materials Safety Administration EXPRESS OVERNIGHT DELIVERY December 20, 2011 Mr. Jeff Barger Vice President, Operations Dominion Transmission, Inc. 445 West Main Street Clarksburg, WV 26301 CPF 1-2009-1006 Dear Mr. Barger: On December 30, 2010, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Dominion Transmission, Inc. (DTI) a Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. After receiving an extension of time, DTI submitted to PHMSA, by letter dated February 23, 2011, a Petition for Reconsideration of the Order (Petition). DTI submitted, by letter dated February 28, 2011, interim results for Compliance Order Items 1 and 2 (per the terms of Item 3 in the Compliance Order) to the Director, PHMSA Eastern Region (Director). For Compliance Order Item 2, DTI was required to submit a plan for drip blowing operations to the Director, within 60 days of the Final Order (and execution of the plan within 365 days of the Final Order). DTI submitted test results in lieu of a plan. The Director accepted the test results in lieu of a plan. DTI supplemented its Petition to PHMSA by letter dated May 26, 2011. DTI submitted a letter dated July 29, 2011 with additional Compliance Order related results to the Director. In that letter, DTI:#

120091006_Closure Letter_12202011_text.pdf, page 2120091006 • Provided safety related costs associated with Compliance Order Item 4. • Updated the results for Compliance Order Items 1 and 2. • Inadvertently referred to an incorrect date for submission of plans for Compliance Order Item 2. DTI stated February 14, 2011, which should have been February 28, 2011. PHMSA issued its decision on the Petition in the above referenced case on October 13, 2011. The Petition was denied. DTI subsequently paid the civil penalty amount via wire transfer on October 27, 2011. DTI submitted a letter to the Director on November 18, 2011, noting that the one previously remaining inoperable drip within its Oakford Storage Field had been successfully blown on October 28, 2011. Based on our review of the documentation you provided and confirmation of payment of the civil penalty, it has been determined that you have complied with the terms of this Order. Accordingly, this case is now closed and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Byron Coy, PE Director, Eastern Region Pipeline and Hazardous Materials Safety Administration 120091006_Closure Letter_12202011 Page 2 of 2#

120091006_FinalOrder_12302010.pdf, page 1Official PDFU.S. Department of Transportation Washington, DC 20590 1200 New Jersey Ave., SE Safety Administration Pipeline and Hazardous Materials DEC 3 0 2010 Mr. Jeff Barger Vice President, Operations Dominion Transmission, Inc. 445 West Main Street Clarksburg, WV 26301 Re: CPF No. 1-2009-1006 Dear Mr. Barger: Enclosed please find the Final Order issued in the above-referenced case. It withdraws several instances of alleged violations, makes other findings of violation, and assesses a reduced civil penalty of $191,500. The Order also specifies actions that need to be taken by Dominion Transmission, Inc. to comply with the pipeline safety regulations. When the civil penalty has been paid and the terms of the compliance order are completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Byron E. Coy, Director, Eastern Region, PHMSA CERTIFIED MAIL - RETURN RECEIPT REQUESTED |7005 1160 0001 0039 99831#

120091006_FinalOrder_12302010.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of Dominion Transmission, Inc. CPF No. 1-2009-1006 Respondent. FINAL ORDER Between July-November 2008, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), the New York Public Service Commission, and the West Virginia Public Service Commission, conducted a series of on-site pipeline safety inspections of the facilities and records of Dominion Transmission, Inc. (DTI or Respondent) at its headquarters in Clarksburg, WV, and its field facilities in Oakford, PA, Harrison Valley, PA, Ellisburg, PA, State Line, PA, Lightburn Station, WV, and Cove Point, MD. Respondent operates approximately 3,649 miles of gas transmission pipeline throughout West Virginia, Ohio, Pennsylvania, New York, Maryland, and Virginia. As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated June 26, 2009, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that DTI had committed various violations of 49 C.F.R. Part 192, proposed a civil penalty of $195,100, and proposed that Respondent be required to take certain measures to correct the alleged violations. DTI responded to the Notice by letter dated July 29, 2009 (Response). Respondent contested some of the allegations, offered additional information in response to the Notice, and requested the withdrawal or the mitigation of certain proposed civil penalties. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a), which states:#

120091006_FinalOrder_12302010.pdf, page 32 § 192.481 Atmospheric Corrosion control: Monitoring. (a) Each operator must inspect each pipeline or portion of pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion, as follows. If the pipeline is Then the frequency of located: Onshore ...... At least once every 3 calendar years, but with intervals not exceeding 39 months. Offshore ............ At least once each calendar year, but with intervals not exceeding 15 months. The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a) by failing to inspect each intervals not exceeding 39 months. Specifically, nerval not exceeding exceeding exposes. Specifically, the Notice allege that bre failed dar near ahe run #1 back-up fuel gas regulator station near valve FGV-25 at the Oakford Compressor Station. The Notice further alleged that Respondent failed to identify areas of atmospheric corrosion on the dehydrator dry gas outlet. In its Response, DTI contended that it did make efforts to identify the corrosion on this dehydrator dry gas outlet and scheduled it for maintenance. However, DTI also noted that the remediation did not fully comply with its own procedures. Further, DTI conceded that it overlooked the inspection for the fuel gas piping in the vicinity of valve FGV-25 during its 2007 Atmospheric Corrosion inspection. As Respondent admitted, its maintenance efforts were insufficient and it failed to inspect a portion of its pipeline for atmospheric corrosion within three calendar years. While I acknowledge DTT's efforts to identify the corrosion on its dehydrator dry gas outlet and schedule it for maintenance, it is clear that DTI did not fully comply with the requirements under § 192.481(a) by overlooking the inspection of the run #1 back-up fuel gas regulator station near valve FGV-25 at the Oakford Compressor Station. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. $ 192.481(a) by failing to inspect each portion of pipeline that is exposed to the atmosphere at least once every three calendar years, and at intervals not exceeding 39 months. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605, which states: § 192.605 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least once each calendar year. This manual must be prepared before operations of a pipeline system commence.#

120091006_FinalOrder_12302010.pdf, page 43 Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if (2) Controlling corrosion in accordance with the operations and maintenance requirements of subpart I of this part.... The Notice alleged that Respondent violated 49 C.F.R. § 192.605 by failing to follow its corrosion control maintenance procedure requiring drips to be blown at intervals not exceeding one calendar year. Specifically, it alleged that, at the time of the inspection, 103 and 330 drips had not been blown annually at the Oakford Fifth Sands and Murrysville Storage Pools, respectively, from 2003 through 2007. In its Response, DTI did not contest this allegation of violation, but contended that the two locations only have a total of 331 drips, rather than 433 as alleged in the Notice. Respondent stated that all of the operable drips can be or have been blown in the past year. PHMSA agrees with DTT's contention that there are only 331 drips at the Oakford Fifth Sands and Murrysville Storage Pools collectively. PHMSA further concedes that Respondent's drips can be or have been blown in the past year. However, these contentions do not rebut the allegation that DTI failed to blow 443 drips annually between 2003 and 2007. To clarify, the Notice cited DTI for a total of 433 instances of drips not being blown during the time period in question, including some of the same drips that were not blown in multiple years.! Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.605 by failing to follow its corrosion control maintenance procedure requiring drips to be blown at intervals not exceeding one calendar year. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.709(c), which states: § 192.709 Transmission lines: Record keeping. Each operator shall maintain the following records for transmission lines for the periods specified. (a) (c) A record of each patrol, survey, inspection, and test required by subparts L and M of this part must be retained for at least 5 years or until the next patrol, survey, inspection, or test is completed, whichever is longer. The Notice alleged that Respondent violated 49 C.F.R. § 192.709(c) by failing to maintain records required by subparts L and M. Specifically, it contended that DTI was unable to provide ' Violation Report, Exhibit B.#

120091006_FinalOrder_12302010.pdf, page 54 records from calendar years 2003 through 2007 to demonstrate that annual capacity calculations were performed for pressure relieving devices at five compressor stations (Harrison, Ellisburg, Stateline, Oakford and JB Tonkin). In its Response, DTI contested this allegation of violation. Respondent stated that it had recorded each annual review in either spreadsheets or through an electronic Inspection Monitoring System (IMS). In its Response, DTI provided an example of its IMS, but it did not include the full records of the capacity calculations. Nor did DTI provide any explanation for its inability to furnish the documents during the PHMSA inspection. The evidence in the record demonstrates that Respondent's Compliance Engineer could not locate records of relief valve capacity determinations for the subject years during the inspection even though PHMSA had notified the company prior to the inspection that such records would be requested. In its Response, DTI did not dispute that it could not provide the PHMSA inspection team with records of the capacity calculations for relief devices, and despite the amount of time since the inspection in 2008, has not provided all of the required records to PHMSA. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.709(c) by failing to maintain records demonstrating that annual capacity calculations were performed for pressure relieving devices at five of DTT's compressor stations. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a), which states: § 192.739 Pressure limiting and regulating stations: Inspection and testing. (a) Each pressure limiting station, relief device (except rupture discs), and pressure regulating station and its equipment must be subjected at intervals not exceeding 15 months, but at least once each calendar year, to inspections and tests to determine that it is- (1) In good mechanical condition; (2) Adequate from the standpoint of capacity and reliability of operation for the service in which it is employed; (3) Except as provided in paragraph (b) of this section, set to control or relieve at the correct pressure consistent with the pressure limits of § 192.201(a); and (4) Properly installed and protected from dirt, liquids, or other conditions that might prevent proper operation. 2 Respondent stated in its Response that the records were not included because they constituted "hundreds of does not explain the company's failure to maintain the records for inspection. Furthermore, the Notice clearly pages," but that they could be furnished upon request. Response at 3. Even if the records had been provided, that explained to DTI that the existence of these records was in dispute, and therefore Respondent should have provided all of them to rebut the allegation. 3 Violation Report at 7-8.#

120091006_FinalOrder_12302010.pdf, page 65 The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a) by failing to perform inspections and tests at intervals not exceeding 15 months, but at least once each calendar year, on several relief devices. Specifically, the Notice alleged that DTI failed to inspect the following relief valves: (1) the Ellinsburg Compressor Station fuel gas bottle inlet 1st cut regulator (Location ID CSN6361); (2) the Ellinsburg Compressor Station relief valve (2" Axelson serial no. 632280); and (3) the Stateline Compressor Station fuel gas bypass relief valve. In its Response, DTI did not contest the allegations of violation with regard to the two devices at Ellinsburg Compressor Station listed above, but contested the allegation of violation with regard to the device at Stateline Compressor Station, which the company argued is a secondary form of protection, personally operated by DTI employees. Due to the nature of the Stateline Compressor Station device, Respondent asserted that it is not subject to the requirements of relief devices under 49 C.F.R. § 192.739. PHMSA agrees with DTT's characterization of the relief valve at the Stateline Compressor Station listed in its Response. The valve is only a secondary form of protection and therefore is not covered by the testing and inspection requirements of 49 C.F.R $ 192.739.* However, DTI did not contest that it failed to test and inspect the two (2) devices at the Ellinsburg Compressor Station at intervals not exceeding 15 months, but at least once each calendar year. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R § 192.739 by failing to test each of its relief devices at the required intervals. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.743, which states: § 192.743 Pressure limiting and regulator stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in § 192.739(b), the capacity must be determine at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. (b) If review and calculations are used to determine if a device has sufficient capacity, the calculated capacity must be compared with the rated or experimentally determined relieving capacity of the device for the conditions under which it operates. After the initial calculations, subsequent calculations need not be made if the annual review documents that parameters have not changed to cause the rated or experimentally determined relieving capacity to be insufficient. * PHMSA has not interpreted § 192.739 to apply to set points and capacities of back-up or secondary over-pressure sa d: pages 121-2, SA is is posted in inteled operating no Main: eti:/ idance 4901 0 192 Subparts reading-room.#

120091006_FinalOrder_12302010.pdf, page 7The Notice alleged that Respondent violated 49 C.F.R. § 192.743 by failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that the pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. Specifically, the Notice alleged that DTI failed to conduct the required tests of the pressure relieving devices at the following five pressure limiting stations: (1) Stateline Compressor Station location, feed line #16 with Ist and 2nd regulator stations with 2" Welmark relief valves; (2) Stateline Compressor Station location Line #24 supplied by 10" dual port regulator with overpressure protection provided by 8" relief valve having a 6" inlet pipe; (3) Oakford Region, Gas sales to People Gas having a 6" x 8" Axelson relief valve; (4) Oakford Region, Springdale meter and regulator station with relief valve overpressure protection; and (5) Mockingbird Hill Station #426 regulator and relief assembly. In its Response, DTI did not contest the allegations of violation with regard to the two devices at the Stateline Compressor Station, but contended that the testing requirements under 49 C.F.R. § 192.743 did not apply to the other three devices listed in the Notice. First, Respondent stated that the relief device for "Oakford Region, Gas sales to People Gas" is not an overprotection device, and therefore it is not covered by § 192.743. Second, DTI asserted that the device at "Oakford Region, Springdale meter and regulator station" is protected manually by company personnel rather than a relief device. Third, DTI noted that the listed device for "Mockingbird Hill Station" is secondary protection; the primary protection for the station is a high pressure shutdown switch on the compressor engine. PHMSA agrees with Respondent's assertions. The three devices addressed by DTI are not covered by 49 C.F.R. § 192.743. Therefore, DTI was not obligated to perform the tests prescribed under the regulation. However, Respondent did not contest that it failed to perform the required tests on (1) the Stateline Compressor Station location, feed line #16 with 1st and 2nd regulator stations with 2" Welmark relief valves; and (2) the Stateline Compressor Station location Line #24 supplied by 10" dual port regulator with overpressure protection provided by 8" relief valve having a 6" inlet pipe. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.743 by failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that each of its pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation,#

120091006_FinalOrder_12302010.pdf, page 87 including adverse impact on the environment; the degree of Respondent's culpability; the history of Respondent's prior offenses; the Respondent's ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $194,500 for the violations cited above. Item 1: The Notice proposed a civil penalty of $30,500 for Respondent's violation of 49 C.F.R. § 192.481, for failing to inspect a regulator station near valve FGV-25 at the Oakford Compressor Station for evidence of atmospheric corrosion. DTI contended that it made some effort to identify and remediate the corrosion on the dehydrator dry gas header outlet. Although PHMSA agrees that Respondent made an effort to identify corrosion, schedule remediation, and make an effort to complete the remediation before the time of the PHMSA inspection, DTI failed to remediate the corrosion properly. As DTI admitted, the below-ground coating did not extend above ground, and the above-ground coating did not extend over the below-ground coating. Furthermore, DTI entirely failed to inspect the fuel gas piping in the vicinity of valve FGV-25. Considering that DTI violated § 192.481 by failing to inspect a portion of its pipeline, a reduction of the civil penalty is unwarranted. Operators are required to inspect their pipelines for atmospheric corrosion to prevent pipe failures. In this instance, the piping had surface rust and pits measuring up to 80 mils depth in a 5"x 8" area. If the corrosion pits had been allowed to deepen, a pipe failure may have occurred, potentially resulting in the release of natural gas. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $30,500 for violation of 49 C.F.R. § 192.481. Item 2: The Notice proposed a civil penalty of $80,500 for Respondent's violation of 49 C.F.R. § 192.605 for failing to follow its corrosion control maintenance requirements requiring drips to be blown at least annually. While DTI contended that PHMSA misstated the number of drips that exist at the Oakford Storage facility, it did not directly contest the allegation that it failed to blow 433 drips at least annually between 2003 and 2007. Failure to maintain drips by blowing can result in the corrosion of the interior wall of the drip and, potentially, a pipeline failure. Furthermore, DTT's drips are located in high-consequence areas with residences and roadways nearby. The failure to maintain drips properly therefore threatens the safety of people living or passing nearby. In fact, DTI experienced two ruptures on their drips during the two-year period prior to the Notice. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $80,500 for violation of 49 C.F.R. § 192.605. Item 3: The Notice proposed a civil penalty of $16,800 for Respondent's violation of 49 C.F.R. § 192.709, for failing to provide records demonstrating that annual capacity calculations were performed during a five-year period for pressure relieving devices at its compressor stations.#

120091006_FinalOrder_12302010.pdf, page 98 DTI requested the withdrawal of the civil penalty associated with Item 3 in its Response, but did not present any evidence or argument to support that request other than to contest the allegation of violation. Having found that Respondent violated § 192.709, I do not find support for a reduction in the civil penalty. Sound record-keeping practices are critical to the safety of transmission lines. Improper record- keeping practices may enable pipeline problems to go unnoticed, ultimately leading to a pipeline failure. In addition to sound record-keeping practices, determining whether pressure relieving devices have sufficient capacity is vitally important to preventing pipeline failures. If a pipeline does not have sufficient capacity, it would be inadequate to relieve a potentially dangerous overpressure situation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $16,800 for violation of 49 C.F.R. § 192.709. Item 4: The Notice proposed a civil penalty of $36,800 for Respondent's violation of 49 C.F.R. § 192.739, for failing to perform inspections and tests at intervals not exceeding 15 months on each of the operator's pressure limiting station, relief device, and pressure regulating station. DTI requested the reduction of the civil penalty associated with Item 4, because the Notice misidentified the Stateline Compressor Station fuel gas bypass relief valve as a relief device subject to § 192.739. Respondent stated that the fuel gas bypass relief valve for the Stateline Compressor Station is a secondary form of protection, personally operated by DTI employees, and not subject to the inspection and test requirements of § 192.739. PHMSA agrees with Respondent's contention that there were only two (2) instances of the violation, rather than three (3). Therefore, the civil penalty should be reduced. DTI did not present any further argument or evidence supporting a reduction in the civil penalty. Regular inspection of all pressure limiting stations, relief devices, and pressure regulating stations—as well as any associated equipment—is necessary to prevent overpressure at compressor stations. Overpressure at compressor stations could lead to pipeline failures and safety risks to the public. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a reduced civil penalty of $35,900 for the two violations of 49 C.F.R. § 192.739. This penalty reflects a reduction of $900, which reflects the incremental reduction for this one violation. Item 5: The Notice proposed a civil penalty of $30,500 for Respondent's violation of 49 C.F.R. § 192.743, for failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that the pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. DTI requested the reduction of the civil penalty associated with Item 5 because the testing requirements under § 192.743 did not apply to three of the five devices listed in the Notice. PHMSA agrees with the statement that there were only two (2) instances of the violation, rather than five (5). Therefore, the civil penalty should be reduced. DTI did not present any further argument or evidence supporting a reduction in the civil penalty. The proper design of overpressure protection, including all pressure limiting stations, relief devices, and pressure regulating stations, is necessary to prevent the failure of pipeline facilities.#

120091006_FinalOrder_12302010.pdf, page 109 Ultimately, the failure of pipeline facilities could cause damage through the downstream pipeline system, exposing DTT's customers and the public to increased safety risks. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a reduced civil penalty of $27,800 for the two violations of 49 C.F.R. § 192.743. This penalty reflects three reductions of $900, which reflects the incremental reduction for this one violation. In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $191,500. Payment of the civil penalty must be made within 20 days of receipt of this Final Order. Federal regulations (49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954- 8893. Failure to pay the $191,500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a United States District Court. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 2 in the Notice for its violation of 49 C.F.R. § 192.605. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 192.605 (Item 2), Respondent must provide documentation that substantiates that all the drips in the Oakford Fifth Sands and Murrysville Storage Pools that can currently be blown down have been blown down within the time period between 180 days prior to and 180 days after the date of the Final Order. This documentation must be submitted within 210 days of the date of the Final Order. 2. With respect to the violation of § 192.605 (Item 2), Respondent must develop and execute a plan to find, make accessible, and modify as needed for drip blowing operations, all drips that have not been blown within the past calendar year. The plan must be submitted within 60 days of the date of the Final Order and executed within 365 days of the Final Order.#

120091006_FinalOrder_12302010.pdf, page 1110 3. Respondent must submit the results of the Compliance Order items above to the Director, Eastern Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Road, Suite 306, West Trenton, NJ 08628. 4. Respondent must maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Director, Eastern Region, Pipeline and Hazardous Materials safety Administration. Respondent must report costs in two categories: (1) total cost associated with preparation/revision of plans, procedures, studies, and analyses; and (2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEMS With respect to Items 6, 7, and 8, the Notice alleged probable violations of Part 192 but did not propose a civil penalty or compliance order for these items. Therefore, they are considered to be warning items. The warnings were for: 49 C.F.R. § 192.225 (Item 6) - Respondent's alleged failure to retain and follow a qualified welding procedure. Specifically, Respondent's failure to produce written welding repair procedures, and completing welding repairs without having a copy of qualified welding procedures on-site. 49 C.F.R. § 195.402(a) (Item 7) - Respondent's alleged failure to determine if each section of its transmission line between line valves have blowdown valves with adequate capacity to be blown down as rapidly as practicable. Specifically, Respondent's failure to determine if the 36" transmission line being installed for the Cove Point, MD expansion project would have adequate capacity to be blown down as rapidly as practicable. 49 C.F.R. § 192.163 (Item 8) - Respondent's alleged failure to conform its electrical equipment to the National Electrical Code. Specifically, Respondent's transformers were not tied into a continuous grounding circuit in explosion-proof boxes, in accordance with the National Electrical Code. In its Response, DTI contested several of the warning items and presented information showing that it had taken certain actions to address the cited items. Since these are warning items, no findings are made as to whether the evidence of the alleged conduct proves a violation occurred. Pursuant to 49 C.F.R. § 190.205, however, Respondent is advised to correct such conditions as#

120091006_FinalOrder_12302010.pdf, page 1211 necessary to ensure compliance with the cited safety regulations. If PHMSA finds a violation of these provisions in a subsequent inspection, Respondent may be subject to future enforcement action. Under 49 C.F.R. $ 190.215, Respondent has a right to submit a petition tor reconsideration of this Final Order. It submitted, a petition for reconsideration must be sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions received no later than 20 days after receipt of this Final Order by the Respondent, provided it contains a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil penalty assessed. All other terms of the order, including any required corrective action, shall remain in full force and effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. $ 190.5. DEC 3 0 2010 Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 1Official PDFOCT 13 2011 Mr. Jeff Barger Vice President, Operations Dominion Transmission, Inc. 445 West Main Street Clarksburg, WV 26301 Re: CPF No. 1-2009-1006 Dear Mr. Barger: Enclosed please find the Decision on the Petition for Reconsideration filed by Dominion Transmission, Inc. in the above-referenced case. For the reasons set forth in the Decision, your petition is denied. When the civil penalty has been paid and the terms of the compliance order have been completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Decision by certified mail is complete upon mailing as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety Mr. Byron Coy, Director, Eastern Region, PHMSA Ms. Susan A. Olenchuk, Van Ness Feldman 1050 Thomas Jefferson St., NW, Washington, D.C. 20007 CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 1160 0001 0075 9930]#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ___________________________________ In the Matter of ) Dominion Transmission, Inc., ) CPF No. 1-2009-1006 ) ) ) Petitioner. ) ___________________________________ ) DECISION ON PETITION FOR RECONSIDERATION On December 30, 2010, pursuant to 49 U.S.C. §§ 60118 and 60122 and 49 C.F.R. § 190.213, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Final Order in this proceeding finding that Dominion Transmission, Inc. (DTI or Petitioner) committed violations of the gas pipeline safety regulations in 49 C.F.R. Part 192. The Final Order assessed a civil penalty of $191,500 for the violations, withdrew several allegations, and ordered DTI to take corrective measures to remedy the violations. DTI, a subsidiary of Dominion Resources, Inc., operates approximately 3,700 miles of pipeline that transport primarily natural gas in Pennsylvania, New York, West Virginia, Ohio, Maryland, and Virginia. 1 After receiving an extension of time, DTI submitted a Petition for Reconsideration dated February 23, 2011 (Petition). In its Petition, DTI requested that PHMSA withdraw the finding of violation in Item 5 of the Final Order and the $27,800 civil penalty associated with that item. Petitioner also sought to clarify several factual statements in the Final Order. In response to additional material submitted for the record and made available to Petitioner by the PHMSA inspector on May 12, 2011, DTI supplemented its Petition by letter dated May 26, 2011 (Supplement). Pursuant to 49 C.F.R. § 190.215, a respondent may petition PHMSA for reconsideration of a final order issued pursuant to § 190.213. PHMSA does not consider repetitious information or arguments, but may consider additional facts or arguments, provided the respondent submits a valid reason why such information was not presented prior to issuance of the final order. PHMSA may grant or deny, in whole or in part, a petition for reconsideration without further proceedings, but may request additional information, data, and comment as deemed appropriate. 1 This information is reported by DTI in accordance with 49 C.F.R. §§ 191.17 and 195.49. On its website, the company states that it maintains 7,800 miles of pipeline. http://www.dom.com/business/gas-transmission/index.jsp (last visited Aug. 17, 2011).#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 32 DTI provided a reason why its Petition contains facts and arguments not presented prior to issuance of the Final Order. Petitioner explained the new facts and arguments concern a regulatory interpretation contained in agency guidance material that the company became aware of only upon issuance of the Final Order. For this reason, I consider the facts and arguments in DTI’s Petition. Item 5: The Final Order determined that DTI violated 49 C.F.R. § 192.743, which states: § 192.743 Pressure limiting and regulating stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in § 192.739(b), the capacity must be consistent with the pressure limits of § 192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. The Final Order found that DTI failed to determine whether two pressure relief devices had sufficient capacity to protect the pipeline facilities to which they were connected. The two pressure relief devices located at the Stateline Compressor Station were identified in the Final Order as a 2-inch relief valve on the LN-16 pipeline and an 8-inch relief valve on the LN-24 pipeline. 2 In its Petition, DTI stated that the finding of violation should be withdrawn because § 192.743 does not apply to the two valves under PHMSA’s own interpretation of the regulation. Specifically, Petitioner alleged that a guidance document published on the agency’s website establishes that only primary over-pressure safety devices are subject to the relief capacity requirement. DTI noted the guidance states with regard to § 192.743 that “[s]et points and capacities of back-up or secondary over-pressure safety devices do not have to meet the code requirements, but the devices must be tested for functionality on an annual basis, not to exceed 15 months.”3 DTI explained that both the 2- and 8-inch relief valves are “back-up or secondary over-pressure safety devices. ” The company noted that the 2-inch valve on the LN-16 pipeline is downstream of primary over-pressure protection provided by a regulator. The 8-inch valve on the LN-24 pipeline is also downstream of three regulators operated in parallel that provide primary over- pressure protection. 4 Since the regulators serve as primary over-pressure protection devices, Petitioner argued, the two relief valves are back-up or secondary over-pressure protection devices not subject to annual capacity determinations under the agency’s interpretation of § 192.743. 2 The Final Order withdrew three other alleged violations of § 192.743 after determining the regulation did not apply to those devices. Final Order at 5-6. 3 Operations and Maintenance Guidance 49 CFR 192 (Subparts L & M) at 132 (Jul. 18, 2005). This and other guidance is published on the PHMSA website at http://www.phmsa.dot.gov/foia/e-reading-room. 4 Petition at 4 and Exhibit A, Schematics of Stateline Compressor Station.#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 43 Analysis The issue to be decided is whether PHMSA has interpreted § 192.743 through the guidance document to exclude the types of relief valves in question that are located downstream of a regulator. The requirement for pipeline operators to have pressure relief devices is derived from several regulations. Section 192.619 establishes the maximum pressure for pipeline segments to be safely operated and, depending on the manner in which that limit was calculated, requires “over- pressure protective devices [to be] installed on the segment in a manner that will prevent the maximum allowable operating pressure from being exceeded, in accordance with § 192.195.”5 The purpose of this requirement is to protect pipelines from the risks associated with internal pressures exceeding the safe limit of the pipeline. Section 192.195(a) specifies that “each pipeline that is connected to a gas source so that the maximum allowable operating pressure could be exceeded as the result of pressure control failure . . . must have pressure relieving or pressure limiting devices that meet the requirements of §§ 192.199 and 192.201.” Likewise, under § 192.201(b) if there is more than one pressure regulating or compressor station feeding into a pipeline, “relief valves or other protective devices must be installed at each station to ensure that the complete failure of the largest capacity regulator or compressor . . . will not impose pressures on any part of the pipeline” higher than permitted. The purpose of these provisions is to reduce the risk of overpressure in pipelines when a pressure control failure occurs, such as the failure of a regulator or compressor. To protect against that risk, §§ 192.195(a) and 192.201(b) require pipelines to have pressure relieving or pressure limiting devices. The devices are in addition to the pressure control provided by the regulator or compressor so that if the pressure control fails, the pipeline is protected by the relieving or limiting devices. Pressure relieving devices that are installed to protect a pipeline in accordance with these provisions must have capacity that is sufficient to protect the pipeline in the event of an overpressure caused by failure of pressure control. As noted above, § 192.743 requires that operators verify annually that the pressure relief devices have sufficient capacity. Under a plain reading of these regulations, Petitioner’s 2- and 8-inch relief valves are subject to capacity determinations under § 192.743 because they protect the pipeline facilities to which they are connected from an overpressure if there is a failure of the upstream regulator. As Petitioner noted, however, PHMSA has stated in an internal agency guidance document that capacities of “back-up or secondary over-pressure safety devices” are not subject to § 192.743. 6 5 § 192.619(b). 6 The guidance at issue was developed for internal use by agency personnel during compliance, inspection, and enforcement activities. According to the cover page, it contains agency “techniques” and “ procedures” and “is intended to be used solely as a reference by PHMSA personnel.” The guidance notes further that in the event of a conflict between the document and any regulation, the regulation would be controlling.#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 54 Petitioner correctly noted that the document does not clarify the meaning of “back-up or secondary” devices and does not explain whether a relief valve downstream of a regulator would be considered a back-up or secondary device. DTI interpreted the guidance to mean that a pressure relief valve downstream of a regulator is a back-up or secondary device because the regulator serves as the primary over-pressure safety device. After evaluating the regulations enumerated above, I must reject Petitioner’s interpretation of the guidance because it is not consistent with the language and purpose of the safety regulations. Specifically, DTI’s interpretation would conflict with the requirement that operators have a pressure relieving or pressure limiting device to protect the pipeline if the regulator fails. If the relief valves were not required to be checked for sufficient capacity under § 192.743, the pipeline would not be protected against an overpressure caused by failure of the regulator. The internal guidance document clarifies how the agency intends to enforce this particular regulation, but the guidance must be read so as to be consistent with the language and intent of the regulations. The reference in the guidance to “back-up or secondary over-pressure safety devices, ” which “do not have to meet the code requirements” may only refer to pressure relief devices that are not otherwise required to be installed on the pipeline facility for over-pressure protection. For example, if an operator has a relief valve of requisite capacity to protect the pipeline facility in case of a failure of pressure control, the guidance informs agency inspectors that PHMSA does not intend to enforce § 192.743 against additional relief valves the operator chooses to install on the facility that are not otherwise required under Part 192. This reading of the guidance is consistent with both the language and safety purpose of the regulations enumerated above, as well as the determination in the Final Order that certain other relief devices are not subject to §§ 192.739 or 192.743.7 In Items 4 and 5, the Final Order discussed pipeline facilities that had other means of protection, such as a second “monitor” regulator, pilot-operated shutoff valve, or high-pressure shutdown switch. In those situations, the Final Order determined that additional relief valves were not subject to the requirements. 8 In its Supplement, DTI contended that even if PHMSA determines the relief valves are subject to the regulation, the agency should withdraw the civil penalty because this interpretation is not apparent from the language of the regulation or guidance material. In support of this contention, Petitioner noted that neither the regulation nor the guidance explains the term “secondary. ” In addition, DTI contended that it made a reasonable, good-faith interpretation of the regulation and was reasonable to believe that relief valves downstream of the regulators are secondary over- pressure safety devices. Petitioner requested the civil penalty be withdrawn for these reasons. guidance material.9 Since regulators are over-pressure safety devices, Petitioner explained, it 7 Final Order at 5-6. 8 The PHMSA inspector offered a similar reading of the guidance in an e-mail communication with DTI dated March 1, 2011. The communications were submitted for the record by the PHMSA inspector on May 12, 2011. 9 Supplement at 1.#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 65 The present determination that DTI’s 2- and 8-inch relief valves are subject to § 192.743 is based on the language of the overpressure protection regulations, which are not ambiguous in requiring that each pipeline have a relief valve or other safety device of sufficient capacity to protect the pipeline from an overpressure caused by failure of the regulator. DTI’s interpretation that the regulation and guidance do not require a safety device of sufficient capacity apart from the regulator is not reasonable because it conflicts with the language of the regulation and would compromise the regulations’ safety purpose. There is also no evidence that Petitioner was relying on a good-faith interpretation of the regulation based on the guidance in question when it committed the violations of § 192.743. The company was not aware of the guidance until issuance of the Final Order more than two years after PHMSA identified the violations. For these reasons, there is no justification to reduce or withdraw the civil penalty. Accordingly, for the above reasons, DTI’s petition to withdraw the finding of violation and associated civil penalty for Item 5 of the Final Order is denied. Payment of the $191,500 civil penalty assessed in the Final Order is now due and must be made within 20 days of receipt of this Decision. Federal regulations (49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893. Failure to pay the $191,500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a United States District Court. Factual Clarifications In its Petition, DTI requested to clarify certain factual statements in the Final Order. In Item 5 of the Final Order, PHMSA described the Springdale Meter and Regulator (M&R) Station as being protected manually by company personnel rather than the relief device referred to in the Notice of Probable Violation (Notice). 10 Petitioner clarified that overpressure protection at Springdale M&R Station is not achieved by personnel but by a “worker/monitor regulator set,” a type of regulator arrangement that involves two separate regulators: one primary (worker) and one secondary (monitor). 11 10 Final Order at 6. 11 Petition at 5. See also DTI’s Response to the Notice (Response) at 7 (Jul. 29, 2009).#

120091006_Decision on the Petition for Reconsideration_10132011_text.pdf, page 76 In Item 4 of the Final Order, PHMSA similarly described the fuel gas bypass relief valve at the Stateline Compressor Station as being personally operated by DTI employees.12 Petitioner clarified that the device is downstream of a worker/monitor regulator set and the location is manned by a DTI employee during inspection and maintenance of the regulator set when the fuel gas run is operating on bypass.13 The device itself is not personally operated by the employee. These clarifications are noted for the record. This Decision on Reconsideration is the final administrative action in this proceeding. ___________________________________ ____________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety 12 Final Order at 5. 13 Petition at 5-6. See also DTI’s Response at 5.#

120091006_Final Order_ 12302010_text.pdf, page 1Official PDFDEC 30 2010 Mr. Jeff Barger Vice President, Operations Dominion Transmission, Inc. 445 West Main Street Clarksburg, WV 26301 Re: CPF No. 1-2009-1006 Dear Mr. Barger: Enclosed please find the Final Order issued in the above-referenced case. It withdraws several instances of alleged violations, makes other findings of violation, and assesses a reduced civil penalty of $191,500. The Order also specifies actions that need to be taken by Dominion Transmission, Inc. to comply with the pipeline safety regulations. When the civil penalty has been paid and the terms of the compliance order are completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Brian E. Coy, Director, Eastern Region, PHMSA CERTIFIED MAIL – RETURN RECEIPT REQUESTED[7005 1160 0001 0039 9983]#

120091006_Final Order_ 12302010_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 _____________________________ ) In the Matter of ) ) Dominion Transmission, Inc. ) CPF No. 1-2009-1006 ) Respondent. ) ) _____________________________ ) FINAL ORDER Between July–November 2008, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), the New York Public Service Commission, and the West Virginia Public Service Commission, conducted a series of on-site pipeline safety inspections of the facilities and records of Dominion Transmission, Inc. (DTI or Respondent) at its headquarters in Clarksburg, WV, and its field facilities in Oakford, PA, Harrison Valley, PA, Ellisburg, PA, State Line, PA, Lightburn Station, WV, and Cove Point, MD. Respondent operates approximately 3,649 miles of gas transmission pipeline throughout West Virginia, Ohio, Pennsylvania, New York, Maryland, and Virginia. As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated June 26, 2009, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that DTI had committed various violations of 49 C.F.R. Part 192, proposed a civil penalty of $195,100, and proposed that Respondent be required to take certain measures to correct the alleged violations. DTI responded to the Notice by letter dated July 29, 2009 (Response). Respondent contested some of the allegations, offered additional information in response to the Notice, and requested the withdrawal or the mitigation of certain proposed civil penalties. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a), which states:#

120091006_Final Order_ 12302010_text.pdf, page 32 § 192.481 Atmospheric Corrosion control: Monitoring. (a) Each operator must inspect each pipeline or portion of pipeline that is exposed to the atmosphere for evidence of atmospheric corrosion, as follows. If the pipeline is located: Then the frequency of inspection is: Onshore . . . . . . . . . . . . At least once every 3 calendar years, but with intervals not exceeding 39 months. Offshore . . . . . . . . . . . . At least once each calendar year, but with intervals not exceeding 15 months. The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a) by failing to inspect each portion of pipeline that is exposed to the atmosphere at least once every three calendar years, at intervals not exceeding 39 months. Specifically, the Notice alleged that DTI failed to inspect the run #1 back-up fuel gas regulator station near valve FGV-25 at the Oakford Compressor Station. The Notice further alleged that it failed to identify areas of atmospheric corrosion on the dehydrator dry gas outlet. In its Response, DTI contended that it did make efforts to identify the corrosion on this dehydrator dry gas outlet and scheduled it for maintenance. However, DTI also noted that the remediation did not fully comply with its own procedures. Further, DTI conceded that it overlooked the inspection for the fuel gas piping in the vicinity of valve FGV-25 during its 2007 Atmospheric Corrosion inspection. As Respondent admitted, its maintenance efforts were insufficient and it failed to inspect a portion of its pipeline for atmospheric corrosion within three calendar years. While I acknowledge DTI’s efforts to identify the corrosion on its dehydrator dry gas outlet and schedule it for maintenance, it is clear that DTI did not fully comply with the requirements under § 192.481(a) by overlooking the inspection of the run #1 back-up fuel gas regulator station near valve FGV-25 at the Oakford Compressor Station. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.481(a) by failing to inspect each portion of the pipeline that is exposed to the atmosphere at least once every three calendar years, and at intervals not exceeding 39 months. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605, which states: § 192.605 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations, This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least one each calendar year. This manual must be prepared before operations of a pipeline system commence.#

120091006_Final Order_ 12302010_text.pdf, page 43 Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (1) Operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and Subpart M of this part. (2) Controlling corrosion in accordance with the operations and maintenance requirements of Subpart I of this part. The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b) by failing to follow its corrosion control maintenance procedure requiring drips to be blown at intervals not exceeding one calendar year. Specifically, it alleged that, at the time of the inspection, 103 and 330 drips had not been blown annually at the Oakford Fifth Sands and Murrysville Storage Pools, respectively, from 2003 through 2007. In its Response, DTI did not contest this allegation of violation, but contended that the two locations only have a total of 331 drips, rather than 433 as alleged in the Notice. Respondent stated that all of the operable drips can be or have been blown in the past year. PHMSA agrees with DTI’s contention that there are only 331 drips at the Oakford Fifth Sands and Murrysville Storage Pools collectively. PHMSA further concedes that Respondent’s drips can be or have been blown in the past year. However, these contentions do not rebut the allegation that DTI failed to blow 443 drips annually between 2003 and 2007. To clarify, the Notice cited DTI for a total of 433 instances of drips not being blown during the time period in question, including some of the same drips that were not blown in multiple years. 1 Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.605(b) by failing to follow its corrosion control maintenance procedure requiring drips to be blown at intervals not exceeding one calendar year. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.709(c), which states: § 192.709 Transmission lines: Record keeping. Each operator shall maintain the following records for transmission lines for the periods specified. (a) . . . . (c) A record of each patrol, survey, inspection, and test required by subparts L and M of this part must be retained for at least 5 years or until the next patrol, survey, inspection, or test is completed, whichever is longer. The Notice alleged that Respondent violated 49 C.F.R. § 192.709(c) by failing to maintain records required by subparts L and M. Specifically, it contended that DTI was unable to provide 1 Violation Report, Exhibit B#

120091006_Final Order_ 12302010_text.pdf, page 54 records from calendar years 2003 through 2007 to demonstrate that annual capacity calculations were performed for pressure relieving devices at five compressor stations (Harrison, Ellisburg, Stateline, Oakford and JB Tonkin). In its Response, DTI contested this allegation of violation. Respondent stated that it had recorded each annual review in either spreadsheets or through an electronic Inspection Monitoring System (IMS). In its Response, DTI provided an example of its IMS, but it did not include the full records of the capacity calculations. Nor did DTI provide any explanation for its inability to furnish the documents during the PHMSA inspection.2 The evidence in the record demonstrates that Respondent’s Compliance Engineer could not locate records of relief valve capacity determinations for the subject years during the inspection even though PHMSA had notified the company prior to the inspection that such records would inspection team with records of the capacity calculations for relief devices, and despite the be requested.3 In its Response, DTI did not dispute that it could not provide the PHMSA amount of time since the inspection in 2008, has not provided all of the required records to PHMSA. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.709(c) by failing to maintain records demonstrating that annual capacity calculations were performed for pressure relieving devices at five of DTI’s compressor stations. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a), which states: § 192.739 Pressure limiting and regulating stations: Inspection and testing. (a) Each pressure limiting station, relief device (except rupture discs), and pressure regulating station and its equipment must be subjected at intervals not exceeding 15 months, but at least once each calendar year, to inspections and tests to determine that it is– (1) In good mechanical condition; (2) Adequate from the standpoint of capacity and reliability of operation for the service in which it is employed; (3) Except as provided in paragraph (b) of this section, set to control or relieve at the correct pressure consistent with the pressure limits of §192.201(a); and (4) Properly installed and protected from dirt, liquids, or other conditions that might prevent proper operation. 2 Respondent stated in its Response that the records were not included because they constituted “hundreds of pages,” but that they could be furnished upon request. Response at 3. Even if the records had been provided, that does not explain the company’s failure to maintain the records for inspection. Furthermore, the Notice clearly explained to DTI that the existence of these records was in dispute, and therefore Respondent should have provided all of them to rebut the allegation. 3 Violation Report at 7-8.#

120091006_Final Order_ 12302010_text.pdf, page 65 The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a) by failing to perform inspections and tests at intervals not exceeding 15 months, but at least once each calendar year, on several relief devices. Specifically, the Notice alleged that DTI failed to inspect the following relief valves: (1) the Ellinsburg Compressor Station fuel gas bottle inlet 1st cut regulator (Location ID CSN6361); (2) the Ellinsburg Compressor Station relief valve (2” Axelson serial no. 632280); and (3) the Stateline Compressor Station fuel gas bypass relief valve. In its Response, DTI did not contest the allegations of violation with regard to the two devices at Ellinsburg Compressor Station listed above, but contested the allegation of violation with regard to the device at Stateline Compressor Station, which the company argued is a secondary form of protection, personally operated by DTI employees. Due to the nature of the Stateline Compressor Station device, Respondent asserted that it is not subject to the requirements of relief devices under 49 C.F.R. § 192.739. PHMSA agrees with DTI’s characterization of the relief valve at the Stateline Compressor Station listed in its Response. The valve is only a secondary form of protection and therefore is did not contest that it failed to test and inspect the two (2) devices at the Ellinsburg Compressor not covered by the testing and inspection requirements of 49 C.F.R § 192.739.4 However, DTI Station at intervals not exceeding 15 months, but at least once each calendar year. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R § 192.739 by failing to test each of its relief devices at the required intervals. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.743, which states: § 192.743 Pressure limiting and regulator stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in §192.739(b), the capacity must be determine at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. (b) If review and calculations are used to determine if a device has sufficient capacity, the calculated capacity must be compared with the rated or experimentally determined relieving capacity of the device for the conditions under which it operates. After the initial calculations, subsequent calculations need not be made if the annual review documents that parameters have not changed to cause the rated or experimentally determined relieving capacity to be insufficient. 4 PHMSA has not interpreted § 192.739 to apply to set points and capacities of back-up or secondary over-pressure safety devices. See PHMSA’s staff manual entitled “Operations and Maintenance Guidance 49 CFR 192 (Subparts L & M),” pages 121-122, which is posted in its electronic reading room at: http://www.phmsa.dot.gov/foia/e- reading-room.#

120091006_Final Order_ 12302010_text.pdf, page 76 The Notice alleged that Respondent violated 49 C.F.R. § 192.743 by failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that the pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. Specifically, the Notice alleged that DTI failed to conduct the required tests of the pressure relieving devices at the following five pressure limiting stations: (1) Stateline Compressor Station location, feed line #16 with 1st and 2nd regulator stations with 2” Welmark relief valves; (2) Stateline Compressor Station location Line #24 supplied by 10” dual port regulator with overpressure protection provided by 8” relief valve having a 6” inlet pipe; (3) Oakford Region, Gas sales to People Gas having a 6” x 8” Axelson relief valve; (4) Oakford Region, Springdale meter and regulator station with relief valve overpressure protection; and (5) Mockingbird Hill Station #426 regulator and relief assembly. In its Response, DTI did not contest the allegations of violation with regard to the two devices at the Stateline Compressor Station, but contended that the testing requirements under 49 C.F.R. § 192.743 did not apply to the other three devices listed in the Notice. First, Respondent stated that the relief device for “Oakford Region, Gas sales to People Gas” is not an overprotection device, and therefore it is not covered by § 192.743. Second, DTI asserted that the device at “Oakford Region, Springdale meter and regulator station” is protected manually by company personnel rather than a relief device. Third, DTI noted that the listed device for “Mockingbird Hill Station” is secondary protection; the primary protection for the station is a high pressure shutdown switch on the compressor engine. PHMSA agrees with Respondent’s assertions. The three devices addressed by DTI are not covered by 49 C.F.R. § 192.743; therefore, DTI was not obligated to perform the tests prescribed under the regulation. However, Respondent did not contest that it failed to perform the required tests on (1) the Stateline Compressor Station location, feed line #16 with 1st and 2nd regulator stations with 2” Welmark relief valves; and (2) the Stateline Compressor Station location Line #24 supplied by 10” dual port regulator with overpressure protection provided by 8” relief valve having a 6” inlet pipe. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.743 by failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that each of its pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation,#

120091006_Final Order_ 12302010_text.pdf, page 87 including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $194,500 for the violations cited above. Item 1: The Notice proposed a civil penalty of $30,500 for Respondent’s violation of 49 C.F.R. § 192.481, for failing to inspect a regulator station near valve FGV-25 at the Oakford Compressor Station for evidence of atmospheric corrosion. DTI contended that it made some effort to identify and remediate the corrosion on the dehydrator dry gas header outlet. Although PHMSA agrees that Respondent made an effort to identify corrosion, schedule remediation, and make an effort to complete the remediation before the time of the PHMSA inspection, DTI failed to remediate the corrosion properly. As DTI admitted, the below-ground coating did not extend above ground, and the above-ground coating did not extend over the below-ground coating. Furthermore, DTI entirely failed to inspect the fuel gas piping in the vicinity of valve FGV-25. Considering that DTI violated § 192.481 by failing to inspect a portion of its pipeline, a reduction of the civil penalty is unwarranted. Operators are required to inspect their pipelines for atmospheric corrosion to prevent pipe failures. In this instance, the piping had surface rust and pits measuring up to 80 mils depth in a 5”x 8” area. If the corrosion pits had been allowed to deepen, a pipe failure may have occurred, potentially resulting in the release of natural gas. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $30,500 for violation of 49 C.F.R. § 192.481. Item 2: The Notice proposed a civil penalty of $80,500 for Respondent’s violation of 49 C.F.R. § 192.605 for failing to follow its corrosion control maintenance requirements requiring drips to be blown at least annually. While DTI contended that PHMSA misstated the number of drips that exist at the Oakford Storage facility, it did not directly contest the allegation that it failed to blow 433 drips at least annually between 2003 and 2007. Failure to maintain drips by blowing can result in the corrosion of the interior wall of the drip and, potentially, a pipeline rupture. Furthermore, DTI’s drips are located in high-consequence areas with residences and roadways nearby. The failure to maintain drips properly therefore threatens the safety of people living or passing nearby. In fact, DTI experienced two ruptures on their drips the two-year period prior to the Notice. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $80,500 for violation of 49 C.F.R. § 192.605. Item 3: The Notice proposed a civil penalty of $16,800 for Respondent’s violation of 49 C.F.R. § 192.709, for failing to provide records demonstrating that annual capacity calculations were performed during a five-year period for pressure relieving devices at its compressor stations.#

120091006_Final Order_ 12302010_text.pdf, page 98 DTI requested the withdrawal of the civil penalty associated with Item 3 in its Response, but did not present any evidence or argument to support that request other than to contest the allegation of violation. Having found that Respondent violated § 192.709, I do not find support for a reduction in the civil penalty. Sound record-keeping practices are critical to the safety of transmission lines. Improper record- keeping practices may enable pipeline problems to go unnoticed, ultimately leading to a pipeline failure. In addition to sound record-keeping practices, determining whether pressure relieving devices have sufficient capacity is vitally important to preventing pipeline failures. If a pipeline did not have sufficient capacity, it would be inadequate to relieve a potentially dangerous overpressure situation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $16,800 for violation of 49 C.F.R. § 192.709. Item 4: The Notice proposed a civil penalty of $36,800 for Respondent’s violation of 49 C.F.R. § 192.739, for failing to perform inspections and tests at intervals not exceeding 15 months on each of the operator’s pressure limiting station, relief device, and pressure regulating station. DTI requested the reduction of the civil penalty associated with Item 4, because the Notice misidentified the Stateline Compressor Station fuel gas bypass relief valve as a “relief device” subject to § 192.739. Respondent stated that the fuel gas bypass relief valve for the Stateline Compressor Station is a secondary form of protection, personally operated by DTI employees, and not subject to the inspection and test requirements of § 192.739. PHMSA agrees with Respondent’s contention that there were only two (2) instances of the violation, rather than three (3). Therefore, the civil penalty should be reduced. DTI did not present any further argument or evidence supporting a reduction in the civil penalty. Regular inspection of all pressure limiting stations, relief devices, and pressure regulating stations – as well as any associated equipment – is necessary to prevent overpressure at compressor stations. Overpressure at compressor stations could lead to pipeline failures and safety risks to the public. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a reduced civil penalty of $35,900 for the two violations of 49 C.F.R. § 192.739. This penalty reflects a reduction of $900, which reflects the incremental reduction for this one violation. Item 5: The Notice proposed a civil penalty of $30,500 for Respondent’s violation of 49 C.F.R. § 192.743, for failing to determine, at intervals not exceeding 15 months and at least once each calendar year, that the pressure relief devices at pressure limiting stations and pressure regulating stations had sufficient capacity to protect the facilities to which they are connected. DTI requested the reduction of the civil penalty associated with Item 5 because the testing requirements under § 192.743 did not apply to three of the five devices listed in the Notice. PHMSA agrees with the statement that there were only two (2) instances of the violation, rather than five (5). Therefore, the civil penalty should be reduced. DTI did not present any further argument or evidence supporting a reduction in the civil penalty. The proper design of overpressure protection, including all pressure limiting stations, relief devices, and pressure regulating stations, is necessary to prevent the failure of pipeline facilities.#

120091006_Final Order_ 12302010_text.pdf, page 109 Ultimately, the failure of pipeline facilities could cause damage through the downstream pipeline system, exposing DTI’s customers and the public to increased safety risks. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a reduced civil penalty of $27,800 for the two violations of 49 C.F.R. § 192.743. This penalty reflects three reductions of $900, which reflects the incremental reduction for this one violation. In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $191,500. Payment of the civil penalty must be made within 20 days of receipt of this Final Order. Federal regulations (49 C.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954- 8893. Failure to pay the $191,500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a United States District Court. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 2 in the Notice for its violation of 49 C.F.R. § 192.605. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of natural gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 192.605 (Item 2), Respondent must provide documentation that substantiates that all the drips in the Oakford Fifth Sands and Murrysville Storage Pools that can currently be blown down have been blown down within the time period between 180 days prior to and 180 days after the date of the Final Order. This documentation must be submitted within 210 days of the date of the Final Order. 2. With respect to the violation of § 192.605 (Item 2), Respondent must develop and execute a plan to find, make accessible, and modify as needed for drip blowing operations, all drips that have not been blown within the past calendar year. The plan must be submitted within 60 days of the date of the Final Order and executed within 365 days of the Final Order.#

120091006_Final Order_ 12302010_text.pdf, page 1110 3. Respondent must submit the results of the Compliance Order items above to the Director, Eastern Region, Office of Pipeline Safety, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Road, Suite 306, West Trenton, NJ 08628. 4. Respondent must maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Director, Eastern Region, Pipeline and Hazardous Materials safety Administration. Respondent must report costs in two categories: (1) total cost associated with preparation/revision of plans, procedures, studies, and analyses; and (2) total cost associated with replacements, additions, and other changes to pipeline infrastructure. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. WARNING ITEMS With respect to Items 6, 7, and 8, the Notice alleged a probable violation of Part 192 but did not propose a civil penalty or compliance order for this item. Therefore, this is considered to be a warning item. The warnings were for: 49 C.F.R. § 192.225 (Item 6) ─ Respondent’s alleged failure to retain and follow a qualified welding procedure. Specifically, Respondent’s failure to produce written welding repair procedures, and completing welding repairs without having a copy of qualified welding procedures on-site. 49 C.F.R. § 195.402(a) (Item 7) ─ Respondent’s alleged failure to determine that each section of its transmission line between line valves have blowdown valves with adequate capacity to be blown down as rapidly as practicable. Specifically, Respondent’s failure to determine that the 36” transmission line being installed for the Cove Point, MD expansion project would have adequate capacity to be blown down as rapidly as practicable. 49 C.F.R. § 192.163 (Item 8) ─ Respondent’s alleged failure to conform its electrical equipment to the National Electrical Code. Specifically, Respondent’s transformers were not tied into a continuous grounding circuit in explosion-proof boxes, in accordance with the National Electrical Code. In its Response, DTI contested several of the warning items and presented information showing that it had taken certain actions to address the cited items. Since these are warning items, no findings are made as to whether the evidence of the alleged conduct proves a violation occurred. Pursuant to 49 C.F.R. § 190.205, however, Respondent is advised to correct such conditions as#

120091006_Final Order_ 12302010_text.pdf, page 1211 necessary to ensure compliance with the cited safety regulations. If PHMSA finds a violation of these provisions in a subsequent inspection, Respondent may be subject to future enforcement action. Under 49 C.F.R. § 190.215, Respondent has a right to submit a petition for reconsideration of this Final Order. If submitted, a petition for reconsideration must be sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions received no later than 20 days after receipt of this Final Order by the Respondent, provided it contains a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil penalty assessed. All other terms of the order, including any required corrective action, shall remain in full force and effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#