{"operation":"document","citation":"CPF 120110001","title":"RICHMOND, CITY OF — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-05-09","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.355(b)(2), 192.465(a), 192.707(d)(2), 192.725(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120110001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120110001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120110001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120110001","body":"Notice of Probable Violation involving RICHMOND, CITY OF. PHMSA's enforcement data identifies the cited regulations as 192.355(b)(2),  192.465(a),  192.707(d)(2),  192.725(b). The case was opened on 2011-05-09 and is reported as closed as of 2012-08-21. Proposed civil penalty: $59,000. Assessed civil penalty: $40,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120110001_Final Order_08012012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120110001/120110001_Final%20Order_08012012.pdf\n\n120110001_Final Order_08012012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120110001/120110001_Final%20Order_08012012_text.pdf\n\n120110001_NOPV PCP_05092011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120110001/120110001_NOPV%20PCP_05092011.pdf\n\n120110001_NOPV PCP_05092011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120110001/120110001_NOPV%20PCP_05092011_text.pdf\n\n120110001_Operator Response and Request for a Hearing_06082011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120110001/120110001_Operator%20Response%20and%20Request%20for%20a%20Hearing_06082011.pdf\n\n120110001_Final Order_08012012_text.pdf\n\nAugust 1, 2012\nMr. Bob Steidel\nDirector\nDepartment of Public Utilities\nCity of Richmond\n400 Jefferson Davis Highway\nRichmond, VA 23224\nRe: CPF No. 1-2011-0001\nDear Mr. Steidel:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a reduced civil penalty of $40,000. The penalty payment terms are set\nforth in the Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Michael Bellman, Deputy Director, Gas & Light, City of Richmond Dept. of Public\nUtilities - 400 Jefferson Davis Hwy, Richmond, VA 23224\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Byron Coy, Director, Eastern Region, OPS\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___________________________________\nIn the Matter of )\nCity of Richmond, ) CPF No. 1-2011-0001\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nBetween February 24, 2009, and September 14, 2010, pursuant to 49 U.S.C. §§ 60106 and\n60117, a representative of the Virginia State Corporation Commission (VA-SCC), as agent for\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted a safety inspection of the pipeline facilities and records of the City of\nRichmond, Virginia (Respondent). Respondent operates approximately 2,000 miles of natural\ngas distribution pipelines with approximately 92,500 services.1\nAs a result of the inspection, the VA-SCC notified the Director, Eastern Region, OPS (Director)\nof certain probable violations of the gas pipeline safety regulations in 49 C.F.R. Part 192. After\nreviewing the notification, the Director issued to Respondent, by letter dated May 9, 2011, a\nNotice of Probable Violation and Proposed Civil Penalty (Notice). In accordance with\n49 C.F.R. § 190.207, the Notice alleged that Respondent committed one violation and proposed a\ncivil penalty of $59,000 for the alleged violation. In accordance with § 190.205, the Notice also\nincluded several warning items, which advised Respondent to correct other probable violations.\nCity of Richmond responded to the Notice by letter dated June 8, 2011 (Response). Respondent\ndid not contest the alleged violation, but requested a hearing to discuss the proposed civil\npenalty. In accordance with 49 C.F.R. § 190.211, a hearing was held on January 18, 2012, by\nteleconference before the Presiding Official from the Office of Chief Counsel, PHMSA. After\nthe hearing, Respondent provided a written submission dated February 9, 2012 (Closing).\nFINDING OF VIOLATION\nIn its Response and at the hearing, City of Richmond did not contest the allegation in Item 3 of\nthe Notice that it had committed a violation of 49 C.F.R. § 192.465(a), which states:\n1 System information for calendar year 2011 is reported pursuant to 49 C.F.R. § 191.11.\n\n\n\n2\n§ 192.465 External corrosion control: Monitoring.\n(a) Each pipeline that is under cathodic protection must be tested at\nleast once each calendar year, but with intervals not exceeding 15 months,\nto determine whether the cathodic protection meets the requirements of\n§ 192.463. However, if tests at those intervals are impractical for\nseparately protected short sections of mains or transmission lines, not in\nexcess of 100 feet (30 meters), or separately protected service lines, these\npipelines may be surveyed on a sampling basis. At least 10 percent of\nthese protected structures, distributed over the entire system must be\nsurveyed each calendar year, with a different 10 percent checked each\nsubsequent year, so that the entire system is tested in each 10-year period.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.465(a) by failing to survey\nseparately protected short sections of mains to determine whether cathodic protection met the\napplicable requirements. Specifically, the Notice alleged that Respondent’s gas pipeline system\nis primarily plastic pipe with approximately 2,406 steel drips considered to be “separately\nprotected short sections of mains.\n” The Notice alleged that Respondent failed to survey cathodic\nprotection on the steel drips at a sampling rate of 10% per year starting in 1994 when they were\ninstalled.\nThe Notice recognized that following the VA-SCC inspection in 2009, City of Richmond\nremediated the violation by surveying all of the steel drips. As a result of those surveys,\nRespondent scheduled approximately 260 steel drips for additional cathodic protection or\nremoval.\nIn its Response and at the hearing, Respondent did not contest the allegation of violation, but\npresented information in support of reducing the proposed civil penalty as discussed below in the\nAssessment of Penalty section.\nAccordingly, based upon a review of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.465(a) by failing to survey separately protected short sections of mains to determine the\nadequacy of cathodic protection.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken 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.2\n2 Subsequent to the actions that gave rise to this case, the Pipeline Safety, Regulatory Certainty, and Job Creation\nAct of 2011 increased the civil penalty liability for a violation to $200,000 per violation for each day of the violation\nup to a maximum of $2,000,000 for any related series of violations. See Pub. L. No. 112-90, § 2(a), 125 Stat. 1905.\n\n\n\n3\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on Respondent’s ability to\ncontinue doing business; and the good faith of Respondent in attempting to comply with the\npipeline safety regulations. In addition, I may consider the economic benefit gained from the\nviolation without any reduction because of subsequent damages, and such other matters as justice\nmay require.\nItem 3: The Notice proposed a civil penalty of $59,000 for Respondent’s violation of\n49 C.F.R. § 192.465(a). City of Richmond violated § 192.465(a) by failing to survey the\ncathodic protection on approximately 2,406 steel drips across its gas pipeline system from 1994\nto 2009.\nNature, circumstances, and gravity of the violation, including adverse impact on the\nenvironment. OPS explained during the hearing that the proposed civil penalty was based on the\nnumber and duration of the violations and their gravity. Specifically, there were a high number\nof drips that were not surveyed for a long period of time, and the drips were located in a densely\npopulated area where a pipeline failure could have significant consequences.\nAt the hearing, Respondent argued the drips were not located in densely populated areas, but\nrather were located primarily in counties outside of the urban city area. On this point, the VA-\nSCC agreed that at least the majority of drips were in suburban areas.\nPHMSA may assess an elevated civil penalty for a violation that occurs in a densely populated\narea or “high consequence area” (HCA) due to the gravity of the violation. The proposed civil\npenalty in this case was based, in part, on the violation allegedly occurring in a densely\nlocation of the violation, and while the Violation Report indicated that the steel pot drips were in\nthe City of Richmond’s “metropolitan area,” it did not indicate the extent to which the violation\npopulated HCA.3 I note, however, that the Notice did not include relevant information about the\noccurred either in the urban center or in the less-populated surrounding areas. In the absence of\nadditional information to justify an elevated penalty for a violation in an HCA, I find the penalty\nshould be reduced.\nThe City also argued there was minimal if any impact on the environment by the violation,\nexplaining that in addition to the steel drips being located outside of densely populated city areas,\nmore than 90% of the steel drips when surveyed in 2009 still had adequate cathodic protection.\nAlthough Respondent did not disagree that the system experienced a number of leaks,\nRespondent argued the leaks represented a relatively insignificant safety threat because none of\nthem met the threshold for having to be repaired under the regulations.4\nThe Violation Report included statements concerning the potential impact to public safety posed\nby the violation, but did not state explicitly that the violation caused an incident or other adverse\n3 Pipeline Safety Violation Report, at 4 (May 9, 2011) (Violation Report).\n4 Closing at 3. See 49 C.F.R. § 192.703(c) (requiring gas pipeline operators to repair “hazardous leaks”).\n\n\n\n4\nimpact to the environment. At the hearing, OPS indicated the proposed penalty was based, in\npart, on the significant consequences that could have happened. For these reasons, I find there\nwere minimal, if any, actual impacts on the environment, but since actual impacts were not a\nfactor in the proposed civil penalty, this consideration does not affect the penalty.\nRespondent argued further that PHMSA should not consider the potential impacts on the\nenvironment, claiming there is no legislative intent for the agency to consider potential impacts\nunder 49 U.S.C. § 60122. Rather, Respondent argued, PHMSA should only consider the actual\nimpacts, which were minimal, as noted above.\nIn considering “the nature, circumstances, and gravity of the violation, including adverse impact\non the environment,” PHMSA has broad discretion to consider not only the actual impacts to\nperson, property and the environment, but also the potential impacts that could result from the\noperator’s failure to comply with a safety standard. Potential impacts are relevant to the gravity\nof the violation. As explained in a previous final order:\nPHMSA sets civil penalties by applying the statutory assessment criteria\non a case-by-case basis. Given the unique facts of each offense, operating\nconditions of each pipeline, an operator’s individual compliance history,\nhow the violation was discovered, its duration, whether the operator made\na good faith effort to comply with the regulation prior to the inspection,\nand whether there were any immediate or potential safety or\nenvironmental impacts, it is not uncommon for there to be some variance\nin the penalties assessed for different operators’ violation of the same code\nsection.5\nPHMSA’s consideration of potential safety and environmental impacts is also consistent with the\nagency’s regulatory approach to preventing the potential for certain risks to public safety,\nproperty, and the environment. For example, operators of natural gas pipelines are required to\nidentify “potential threats” to pipeline integrity and must take preventative and mitigative\nmeasures based on those threats to prevent a pipeline failure.6\nAccordingly, I find it is appropriate for PHMSA to consider the potential impacts of the violation\nin the assessment of a civil penalty.\nIn the present case, Respondent’s failure to regularly test the cathodic protection of such a large\nnumber of steel drips for a long period of time represented a significant safety threat that had the\npotential to result in a pipeline incident in or near residential areas. For these reasons, I find the\nnature, circumstances, and gravity support the assessment of a civil penalty.\n5 Belle Fourche Pipeline Co., Final Order, CPF No. 5-2009-5042, at 20, 2011 WL 7006607 (Nov. 21, 2011). See\nalso ExxonMobil Pipeline Co., Final Order, CPF No. 5-2009-5004, at 3, 2011 WL 4351593 (Jul. 11, 2011)\n(considering proximity to a sole source drinking water supply and the potential for serious consequences).\n6 49 C.F.R. § 192.917. See also §§ 192.935 and 192.1007.\n\n\n\n5\nDegree of Respondent’s culpability. When evaluating an operator’s culpability, I determine the\nas the operator of the facility, City of Richmond is responsible for compliance and therefore is\ndetermined to be culpable for the violation. There is no basis in the record to find a lesser degree\nof culpability on the part of Respondent for the violation.\nextent to which Respondent deserves the blame for the violation that occurred.7 In this instance,\nHistory of Respondent’s prior offenses. Respondent argued the civil penalty should not be based\non any history of prior violations, because at the time of the Notice, the City had not been issued\na final order since 2004. During the hearing, OPS explained that the proposed penalty was not\nbased on any prior violations. Therefore this consideration does not affect the penalty.\nGood faith of Respondent in attempting to comply with the pipeline safety regulations.\nRespondent requested that the civil penalty be reduced to reflect the aggressive corrective action\nthe City took immediately following identification of the violation during the VA-SCC’s\ninspection in 2009. Respondent explained that following the inspection, the City immediately\nsurveyed 100% of the steel drip structures in the pipeline system over a 10-month period. The\nCity explained this action was taken even though the regulation would only require surveying at\na rate of 10% per year. Respondent took other action as well, including providing additional\ncathodic protection to 206 steel drips and removing 56 drips that were located in areas that were\nhard to access. The City stated that it has spent $183,802, not including paving costs, to\ncomplete the corrective measures, an amount far exceeding the proposed penalty of $59,000.\nBecause the City “went beyond [the] requirements” in surveying all of the steel drips within a\n10-month period, Respondent argued the penalty should be reduced.8\nRespondent’s aggressive corrective action is acknowledged. However, PHMSA does not\ngenerally find cause to reduce a civil penalty for corrective action taken after the operator has\nbeen notified of the deficiency through a compliance inspection.\nto have an affirmative obligation to comply with the pipeline safety regulations, particularly\nwhen a compliance issue has already been brought to their attention.\n9 PHMSA considers operators\nGiven the long period of time in which the steel drips had not been surveyed, it was not\nunreasonable to expect the operator to complete a survey of all of the drips at an aggressive\nschedule. In fact, had Respondent not performed such a survey, the Agency would have been\njustified in ordering a complete survey rather than to allow another 10 years for the drips to be\nsurveyed at a rate of 10% per year. For these reasons, I find the cost incurred by Respondent to\nremediate the violation does not warrant reducing the proposed civil penalty.\nAny effect that the penalty may have on Respondent’s ability to continue doing business. Finally,\nRespondent requested that the civil penalty be reduced because it would have an effect on its\n7 Belle Fourche, 5-2009-5042, at 19.\n8 Response at 2.\n9 Air Products and Chemicals, Inc., Final Order, CPF No. 4-2009-1008, at 3, 2009 WL 5538650 (Dec. 1, 2009).\nSee also Chevron Pipe Line Co., Final Order, CPF No. 4-2005-8008, at 4, 2008 WL 902913 (Mar. 19, 2008)\n(finding that corrective action taken by an operator after the OPS/PHMSA inspection did not justify reducing the\nproposed penalty).\n\n\n\n6\nability to perform pipeline operations and maintenance activities. Specifically, Respondent\nexplained that as a municipal operator, it is bound by city code requirements pertaining to\nbudgeted funds. In other words, Respondent is budgeted for operations and maintenance\nexpenses, but not fines. Therefore, Respondent explained, payment of the proposed penalty\nwould come out of its operations and maintenance budget and would impact its ability to\nperform pipeline repairs and maintenance.\nIn general, pipeline operators may prove that a proposed fine will cause undue financial hardship\nby submitting certified financial data.10 but asked PHMSA to consider the operator’s unique financial status as a municipal operator.\nIn this case, Respondent did not submit financial data,\nPHMSA treats public and private operators equally when it concerns the assessment of civil\npenalties. Therefore, the agency does not automatically factor an operator’s status as a\nmunicipality when assessing a civil penalty. As explained in a previous final order, “to ensure\npublic safety, any company, municipality, or tribal entity that is in the business of transporting\nhazardous products by pipeline must have sufficient resources to operate in a manner consistent\nwith applicable regulations.”11\nSince Respondent’s status as a municipality alone does not warrant reducing the penalty, and the\noperator has not proven through financial data that the proposed civil penalty would cause undue\nfinancial hardship impacting its ability to continue doing business, I find there is insufficient\njustification to reduce the penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, including the\nabsence of sufficient documentation that the violation occurred in an HCA, I assess Respondent\na reduced civil penalty of $40,000 for violation of 49 C.F.R. § 192.465(a).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $40,000 civil penalty will result in accrual of interest at the current annual rate\nin 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 Jayhawk Pipeline, LLC, Final Order, CPF No. 3-2008-5006, at 5, 2010 WL 5761106 (Dec. 16, 2010).\n11 Navajo Nation Oil & Gas Co., Final Order, CPF No. 4-2006-5029, at 12, 2010 WL 1323383 (Mar. 17, 2010).\n\n\n\n7\nWARNING ITEMS\nWith respect to Items 1, 2 and 4, the Notice alleged probable violations of Part 192 and\nspecifically considered them to be warning items. The warnings were for:\n§ 192.707(d)(2) (Item 1) – Respondent’s alleged failure to include on two line markers a\ntelephone number where it could be reached at all times. Respondent has taken action to\ncorrect the telephone numbers.\n§ 192.725(b) (Item 2) – Respondent’s alleged failure to pressure test a service line riser\nthat had been temporarily disconnected. Respondent has taken corrective action by\nperforming an air test of the line.\n§ 192.355(b)(2) (Item 4) – Respondent’s alleged installation of a regulator (meter)\ndirectly underneath a house window, rather than in a location where venting gas would\nescape freely into the atmosphere and away from any opening into the building.\nRespondent has taken corrective action by installing additional piping to vent the gas\naway from the window and also by revising its written procedures to prevent future\noccurrences.\nIf OPS finds one or more of these issues in a subsequent inspection, Respondent may be subject\nto future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent may submit a petition for reconsideration of this Final\nOrder to the Associate Administrator for Pipeline Safety, PHMSA, 1200 New Jersey Avenue SE,\nEast Building, 2nd Floor, Washington, D.C. 20590, no later than 20 days after receipt of the\nFinal Order by the Respondent. Any petition submitted must contain a statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically\nstays the payment of any civil penalty assessed. If Respondent submits payment of the civil\npenalty, the Final Order becomes the final administrative decision and the right to petition for\nreconsideration is waived. The terms and conditions of this Final Order are effective upon\nservice in accordance with 49 C.F.R. § 190.5.\n___________________________________ _______________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":22522}