{"operation":"document","citation":"CPF 120101008","title":"EASTERN GAS TRANSMISSION AND STORAGE, INC. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2010-10-13","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.199(h), 192.805(b), 199.225(a)(2)(i).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120101008.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120101008.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120101008","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120101008","body":"Notice of Probable Violation involving EASTERN GAS TRANSMISSION AND STORAGE, INC.. PHMSA's enforcement data identifies the cited regulations as 192.199(h),  192.805(b),  199.225(a)(2)(i). The case was opened on 2010-10-13 and is reported as closed as of 2012-08-13. Proposed civil penalty: $185,600. Assessed civil penalty: $182,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120101008_Final Order_08012012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120101008/120101008_Final%20Order_08012012.pdf\n\n120101008_Final Order_08012012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120101008/120101008_Final%20Order_08012012_text.pdf\n\n120101008_NOPV_PCP_PCO_10132010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120101008/120101008_NOPV_PCP_PCO_10132010.pdf\n\n120101008_NOPV_PCP_PCO_10132010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120101008/120101008_NOPV_PCP_PCO_10132010_text.pdf\n\n120101008_Operator Response and Request for Hearing_11122010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120101008/120101008_Operator%20Response%20and%20Request%20for%20Hearing_11122010.pdf\n\n120101008_Final Order_08012012_text.pdf\n\nAUGUST 1, 2012\nMr. Gary L. Sypolt\nPresident\nDominion Transmission, Inc.\n120 Tredegar Street\nRichmond, VA 23219-4306\nRe: CPF No. 1-2010-1008\nDear Mr. Sypolt:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $182,500, and finds that Dominion Transmission,\nInc. has completed the action specified in the Notice to comply with the pipeline safety\nregulations. The penalty payment terms are set forth in the Final Order. When the civil penalty\nhas been paid, this enforcement action will be closed. Service of the Final Order by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Byron E. Coy, Director, Eastern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Jeffrey L. Barger, Senior Vice President, Dominion Transmission, Inc.\n445 West Main Street, Clarksburg, WV 26301\nMs. Susan A. Olenchuk, Counsel for Dominion Transmission\nVan Ness Feldman, P.C.\nSeventh Floor, 1050 Thomas Jefferson St., N.W., Washington, DC 20007\nMr. Girija S. Bajpayee via Email at gbajpayee@psc.state.wv.us\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nDominion Transmission, Inc., ) CPF No. 1-2010-1008\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn July 18, 2006, pursuant to 49 U.S.C. § 60117, a representative of the West Virginia Public\nService Commission (WV PSC), as agent for the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety\ninspection of Dominion Hope Gas, Inc., a subsidiary of Dominion Transmission, Inc.1\n(Dominion or Respondent), following an incident that occurred on July 18, 2006, at the\nDominion Regulating Station XS-2125, near New Martinsville, West Virginia (Incident).\n2\nDominion operates 11,000 miles of natural gas transmission, gathering, and storage pipelines and\n21,800 miles of gas distribution pipelines in Ohio, West Virginia, Pennsylvania, New York,\nMaryland, and Virginia.3\nThe investigation arose out of a rupture on a plastic pipeline owned and operated by Dominion\nHope Gas, Inc. The cause of the rupture was the closure of valves at the Dominion Transmission\nRegulating Station XS-2125, located upstream of the Incident location. Respondent’s employees\nwere preparing the station for sandblasting/painting, and an employee mistakenly closed valves\nlocated on the pressure sensing lines to the regulators. No mechanisms were in place to prevent\nunauthorized operation of the valves. As a result, the downstream line became over-pressured\nand ruptured. The rupture could have resulted in injuries, deaths, or evacuations, especially\nconsidering the proximity to Route 2, a public roadway.\nAs a result of the Incident and inspection, the Director, Eastern Region, OPS (Director), issued to\nRespondent, by letter dated October 13, 2010, a Notice of Probable Violation, Proposed Civil\nPenalty and Proposed Compliance Order, which also included a warning pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\n1 Dominion website, available at http://www.dom.com/about/companies/index.jsp (last visited Apr. 5, 2012).\n2 Pipeline Safety Violation Report (Violation Report) at 4, (July 18, 2006) (on file with PHMSA).\n3 SEC Form 10-K, Dominion Transmission, Inc. (February 2011) at 5.\n\n\n\n2\nDominion had violated 49 C.F.R. §§ 192.805 and 192.199 and proposed assessing a civil penalty\nof $185,600 for the alleged violations. The Notice also proposed that Respondent be required to\ntake certain measures to correct the alleged violations. The warning item required no further\naction, but warned the operator to correct the probable violation or face future potential\nenforcement action.\nRespondent responded to the Notice by letter dated November 12, 2010 (Response). Dominion\ncontested the allegations, requested a hearing, and provided a preliminary statement of issues to\nbe discussed in the hearing. By letter dated March 7, 2011, Respondent stated that it intended to\nsubmit a “written answer” and withdrew its request for a hearing. On May 3, 2011, Respondent\nsubmitted a document entitled, “Final Response of Dominion Transmission, Inc. to Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order” (Closing).\nSubmission of the Closing thereby authorized the entry of this Final Order without further notice.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192.805, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states:\n§ 192.805 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) Identify covered tasks;\n(b) Ensure through evaluation that individuals performing covered\ntasks are qualified;….\nThe Notice alleged that Respondent violated § 192.805(b) by failing to ensure that individuals\nperforming covered tasks were qualified. More specifically, the Notice alleged that two of\nRespondent’s employees performed covered tasks, “Regulator Bypass” and “Operation of M&R\nStation,” when the employees’ qualification records did not show that they had been qualified to\nperform said tasks. Section 192.805(c) allows individuals who have not been qualified to\nperform covered tasks to do so, provided they are directed and observed by an individual who\nhas been qualified. The Notice further alleged that the employees in question were not directed\nand observed by a qualified individual when they performed the covered tasks that led to the\nIncident.\nIn its Closing, Dominion did not contest the allegation of violation. Accordingly, after\nconsidering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.805(b) by failing\nto ensure that employees performing covered tasks were either qualified or directed and observed\nby individuals who were.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.199(h), which states:\n\n\n\n3\n§ 192.199 Requirements for design of pressure relief and limiting\ndevices.\nExcept for rupture discs, each pressure relief or pressure limiting\ndevice must:\n(a) . . . .\n(h) Except for a valve that will isolate the system under protection\nfrom its source of pressure, be designed to prevent unauthorized\noperation of any stop valve that will make the pressure relief valve\nor pressure limiting device inoperative.\nThe Notice alleged that Respondent violated § 192.199(h) by failing to design certain pressure-\nlimiting devices in a manner that would prevent the unauthorized operation of stop valves that\nwould make the pressure-limiting devices inoperative. More specifically, the Notice alleged that\nRespondent failed to have locks or other means to prevent unauthorized operation of the stop\nvalves located in the regulator pressure sensing lines at regulator station XS-2125.\nIn its Closing, Dominion did not contest the allegation of violation. Accordingly, after\nconsidering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.199(h) by failing\nto design certain pressure-limiting devices in a manner that would prevent unauthorized\noperation of stop valves.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $185,600 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $85,600 for Respondent’s violation of\n49 C.F.R. § 192.805(b), for failing to ensure that the individuals performing covered tasks were\nqualified. As stated above, Respondent did not contest the violation but argued that the proposed\ncivil penalty is excessive and advanced several arguments in support of a penalty reduction.\nFirst, Respondent argued that the violation report erroneously stated that two unqualified\nindividuals performed two tasks each (i.e., four covered tasks), when it should have been one.4\n4 Closing at 5.\n\n\n\n4\nRespondent argued that the first act of closing the stop valves was performed by one employee,\nand the second covered task (i.e., closing the inlet valve) was performed as a matter of necessity\nto avoid further consequence. Dominion argued it should not be penalized for this second\ncovered task. Next, Respondent argued that the Violation Report erroneously indicated that two\ncustomers experienced gas supply disruption as a result of the incident, when only one customer\nexperienced disruption.\nRespondent also took issue with PHMSA’s characterization of the penalty assessment factors\nthat were considered. First, the company cited the statement in the “Culpability” section of the\nViolation Report that Respondent failed to take any action to comply with the regulation.\nRespondent argued that the company did properly instruct its employees on the tasks they were\ndirected to perform at the regulator station. Further, Dominion disagreed with the statement in\nthe Violation Report that the company failed to act in good faith.\nI address each of Respondent’s arguments in turn. First, Respondent argued that PHMSA should\ncalculate the civil penalty as though only one covered task had been performed by an unqualified\nindividual. I agree, and the civil penalty has been reduced accordingly. Second, Dominion\ncontended that the gravity of the violation should be reduced because only one customer\nsingle customer experienced a service disruption, but the number of customers affected was not a\nexperienced a service disruption as a result of the Incident.5 Respondent is correct that only a\nfactor in the proposed penalty calculation.\nThird, Respondent argued with PHMSA’s contention in the “Culpability” section of the\nViolation Report that Dominion failed to take action to comply with the regulation. Respondent\ncountered that it had properly instructed the employees in the tasks to be performed at the\nregulator station, i.e., sandblasting and painting, and that its culpability should therefore be\nconsidered “low.”6\nI disagree. Unless the employee’s closure of the valves was intentional, such act itself\ndemonstrates that there was a misunderstanding as to what the employee was supposed to do.\nAlso, Respondent did not provide documentation of its instructions to its employees to show that\nthey had been instructed not to operate the stop valves. Therefore, this argument does not\nsupport reduction of the civil penalty.\nFinally, Respondent disagreed with PHMSA’s selection of the statement in the Violation Report\nthat “good faith does not exist.” To clarify, this section of the Violation Report is not meant to\ngauge Respondent’s overall good-faith or intent to comply with regulatory requirements in\ngeneral. It only considers whether, for the instant allegation of violation, Respondent’s actions\nwere a result of an alternative, reasonable, yet mistaken, interpretation of the regulations. This\nincident was not the result of an alternative interpretation of the regulation; it was the result of\nthe misunderstanding of an employee about what action was appropriate for him to perform.\nTherefore, I reject Respondent’s argument that mitigation of the penalty for good faith is\nwarranted.\n5 Closing, at 5.\n6 Id. at 6.\n\n\n\n5\nBased upon the foregoing, I assess Respondent a reduced civil penalty of $82,500 for violation\nof 49 C.F.R. § 192.805(b).\nItem 2: The Notice proposed a civil penalty of $100,000 for Respondent’s violation of\n49 C.F.R. § 192.199(h), for failing to design pressure-limiting devices in a manner that would\nprevent unauthorized operation of stop valves. Again, Respondent does not contest the violation\nbut argues that the proposed civil penalty is excessive and advanced several arguments in support\nof a penalty reduction. First, Respondent objects that, contrary to assertions in the Violation\nReport, its employees did not make statements to the WV PSC inspector agreeing that “stop\nvalves should have been protected by installing locks or other devices in accordance with O&M\ncontention. Respondent further stated, “[t]reating these statements as aggravating factors is\nprocedures.”7 Dominion submitted affidavits from two of its employees in support of this\ninappropriate . . . .”\nRespondent also argued that the proposed penalty should be reduced because it is\ndisproportionate compared to civil penalties assessed in other proceedings involving violations\nof § 192.199(h). In support of this contention, it cited a 2006 case and a 2002 case in which\nPHMSA assessed a $1,000 civil penalty in the 2006 case and a $20,000 combined penalty in the\n2002 case for two violations, one of which was a violation of § 192.199(h).\nFirst, I respond to Dominion’s argument that PHMSA inappropriately considered the alleged\n“admissions” by Respondent’s employees to be “aggravating factors” in calculation of the civil\npenalty. The facts in this case establish that Respondent had not taken any steps to design\npressure relief valves “to prevent unauthorized operation of any stop valve that will make the\npressure relief valve or pressure limiting device inoperative.\n”8 As noted above, Respondent did\nnot contest this violation. The statements allegedly made by Dominion employees to the WV\nPSC inspector were neither necessary to establish the violation nor were they deemed\n“aggravating factors” in determining the proposed penalty.\nproposed civil penalty is not merited based on this argument.\n9 Therefore, reduction of the\nNext, I respond to Dominion’s argument that the proposed civil penalty is excessive in\ncomparison to the 2006 and 2002 cases. This argument is flawed because it does not consider\nthat, unlike the cases cited by Respondent, the instant case resulted from a reportable incident,\nnot a routine inspection. PHMSA considers pipeline accidents to constitute serious threats to\nlife, property, and the environment under the federal Pipeline Safety Laws. When regulatory\nviolations lead directly to such accidents, it is logical and appropriate that they serve to elevate\nsubstantially the amounts of the penalties assessed. Furthermore, the cases that Respondent cited\nresulted from inspections that were not contemporaneous to the 2006 incident at issue in this\ncase. The cited cases resulted from inspections that took place in 2003 and 2000, respectively.\nCivil penalties assessed by PHMSA have increased generally in recent years, particularly in light\nof Congress’ decision to increase the maximum penalties for pipeline safety violations.\n7 Violation Report at 10.\n8 49 C.F.R. § 192.199(h).\n9 Closing at 6 and 7.\n\n\n\n6\nFurther, it is widely recognized that administrative agencies have wide latitude to enforce the\nstatutes that Congress has entrusted to them. As the Supreme Court stated in 1973, “The\nemployment of a sanction within the authority of an administrative agency is…. not rendered\ninvalid in a particular case because it is more severe than sanctions imposed in other cases.”10 In\nthe absence of statutory language mandating “uniformity of sanctions for similar violations,”\nagencies are free to assess penalties in a manner that “best serves to deter violations and achieve\nthe objectives of that statute.”11\nThe Pipeline Safety Laws list the factors that the Secretary\n“shall” and “may” consider in assessing civil penalties. Nowhere in the statute or in\n49 C.F.R. Part 190 is there a provision requiring that the Secretary consider civil penalties\nassessed in other cases for similar violations in calculating a proposed penalty.\n12\nI am satisfied that the proposed penalty for this violation was both reasonable and appropriate.\nAccordingly, based upon the foregoing, I assess Respondent a civil penalty of $100,000 for\nviolation of 49 C.F.R. § 192.199(h).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $182,500.\nPayment of the civil penalty must be made within 20 days of service of this Final Order.\nPayment may be made by sending a certified check or money order (containing the CPF Number\nfor this case), made payable to “U.S. Department of Transportation,” to the Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, Financial Operations Division (AMZ-\n341), P.O. Box 269039, Oklahoma City, Oklahoma 73125. Federal regulations (49 C.F.R.\n§ 89.21(b)(3)) also permit payment to be made by wire transfer through the Federal Reserve\nCommunications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions\nare contained in the enclosure. Questions concerning wire transfers should be directed to:\nFinancial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney\nAeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial\nOperations Division telephone number is (405) 954-8893.\nFailure to pay the $182,500 civil penalty will result in accrual of interest at the current annual\nrate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\n10 Butz v. Glover Livestock Commission Company, Inc., 411 U.S. 182, 187 (1973).\n11 Id.\n12 Section 49 U.S.C. § 60122(b) states: “Penalty considerations.--In determining the amount of a civil penalty under\nthis section--(1) the Secretary shall consider-- (A) the nature, circumstances, and gravity of the violation, including\nadverse impact on the environment; (B) with respect to the violator, the degree of culpability, any history of prior\nviolations, the ability to pay, and any effect on ability to continue doing business; and (C) good faith in attempting to\ncomply; and (2) the Secretary may consider-- (A) the economic benefit gained from the violation without any\nreduction because of subsequent damages; and (B) other matters that justice requires.”\n\n\n\n7\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 2 in the Notice for violation of\n49 C.F.R. § 192.199(h). The Proposed Compliance Order included two items. Item A stated that\nRespondent was to “[i]nstall a device/s on the sensing line stop valves at regulator station\nRespondent was to “[m]odify appropriate inspection form/s procedures to require verification\nduring inspections that pressure limiting devices are designed and installed to prevent\nunauthorized operation of any stop valve that will make the pressure relief valve or pressure\nXS-2125 to prevent the unauthorized operation of the regulator stop valves.”13 Item B stated that\nlimiting device inoperative.”\nAs stated above, Respondent did not contest that it violated § 192.199(h) but disagreed with the\nterms of the compliance order. Dominion argued that § 192.199(h) affords operators with\nflexibility in achieving compliance and that “no one method of valve protection is required under\nthe regulations.”14 In support of this argument, Respondent cited prior PHMSA documents\nsupporting this interpretation. Dominion also provided a photograph showing that it had\ninstalled a six-foot chain-link fence, topped with barbed wire, at the regulator station and\nrequested that PHMSA find that this action satisfied the terms of the compliance order.15\nRespondent’s argument is legally sound, as the regulation requires that the pressure-limiting\ndevice “be designed to prevent unauthorized operation.” However, it is important to note that\nDominion’s installation of the fencing would not prevent a similar incident from reoccurring.\nUnqualified employees could still have access to the fenced area for similar maintenance\npurposes. Valve locks provide a higher level of protection because they ensure that no\nunauthorized person (either employee or otherwise) inside the fenced area can operate any stop\nvalve. However, as stated above, Respondent’s demonstrated fencing of the XS-2125 satisfies\nthe letter of the regulation, and I find that it has satisfied the terms of the proposed compliance\norder.\nWith regard to Item B of the Proposed Compliance Order, I find that the proposed corrective\naction is no longer applicable given that this Order finds that fencing of the regulator station\nsatisfies the regulation. Once fencing is installed, and compliance with the regulation is\nachieved, it is not necessary or practical for Respondent to verify the presence of the fencing at\neach inspection.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice for Item 2 are not included in this Order.\n13 Notice at 5\n14 Closing at 2.\n15 Closing at Exhibit A.\n\n\n\n8\nWARNING ITEM\nWith respect to Item 3, the Notice alleged a probable violation of Part 199 but did not propose a\ncivil penalty or compliance order for this item. Therefore, this is considered to be a warning\nitem. The warning was for:\n49 C.F.R. § 199.225 (Item 3) ─ Respondent’s alleged failure to prepare and\nmaintain a record stating the reasons an alcohol test was not administered within\ntwo hours of the Incident. Dominion’s records allegedly showed that Respondent\ndid not administer an alcohol test to the employees involved until 2:06 p.m., over\n4½ hours after the 9:30 a.m. incident, but the company was unable to provide a\nrecord explaining why the test had not been administered promptly.\nDominion did not present information in its Response or Closing showing that it had taken\nactions to address this item. If OPS finds a violation of this provision in a subsequent inspection,\nRespondent may be subject to future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":25413}