HOPKINTON LNG CO — Notice of Probable Violation

case documentOfficial PDF120123001_NOPV_PCP_PCO_04022012_text.pdf#

party submissionOfficial PDF120123001_Operator Response and Withdrawel of Hearing Request_05302012.pdf#

party submissionOfficial PDF120123001_Operator_Petition_for_Reconsideration_03262014.pdf#

120123001_Final Order_02032014_text.pdf, page 1Official PDFFEBRUARY 3, 2014 Mr. Tom May President NSTAR Electric & Gas Corp. One NSTAR Way Westwood, MA 02090 Re: CPF No. 1-2012-3001 Dear Mr. May: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a reduced civil penalty of $32,100, and specifies actions that need to be taken by Hopkinton LNG Corp., to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the compliance order 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. Paul J. Zohorsky, Acting Vice President, Gas Operations, NSTAR Electric & Gas Corp./Hopkinton LNG Corp. Mr. Byron Coy, P.E. Director, Eastern Region, OPS CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120123001_Final Order_02032014_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 ) ) Hopkinton LNG Corp., ) CPF No. 1-2012-3001 ) Respondent. ) ____________________________________) FINAL ORDER On October 4, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities of Hopkinton LNG Corp. (Hopkinton or Respondent), in Hopkinton, Massachusetts. Hopkinton, a subsidiary of NSTAR Electric and Gas Corp., 1 operates liquefied natural gas (LNG) facilities in Hopkinton and Acushnet, Massachusetts, to supplement pipeline supply during winter months.2 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated April 2, 2012, 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 Hopkinton had committed various violations of 49 C.F.R. Part 193, assessing a civil penalty of $64,600 for the alleged violations, and ordering Respondent to take certain measures to correct the alleged violations. Hopkinton responded to the Notice by letter dated April 24, 2012, requesting a hearing and additional time to respond to the Notice. On May 30, 2012, Hopkinton provided its response to the Notice, contested the allegations, presented information seeking elimination of the proposed penalty, and withdrew its request for a hearing, thereby authorizing the entry of this Final Order without further notice. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 193, as follows: 1 NSTAR is an operating company of Northeast Utilities. See http://www.nstar.com/about_nstar/, last viewed December 16, 2013. 2 See http://www.nstar.com/about nstar/nonreg.asp (last viewed December 16, 2013).#

120123001_Final Order_02032014_text.pdf, page 32 Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 193.2609, which states: § 193.2609 Support systems. Each support system or foundation of each component must be inspected for any detrimental change that could impair support. The Notice alleged that Respondent violated 49 C.F.R. § 193.2609 by failing to inspect some of its support systems and foundations for detrimental changes that could impair support. Specifically, the Notice alleged that Hopkinton failed in 2009 and 2010 to inspect some of the support systems and foundations at the Hopkinton LNG facility for detrimental changes. In support of its position, PHMSA provided eight photographs showing areas it believed showed changes to the support systems and foundation deterioration more severe than what was documented in the inspection conducted by Hopkinton in 2010. In its Response, Hopkinton contested this allegation of violation, providing pictures and information of the support systems that PHMSA had asserted were showing signs of deterioration and detrimental change. Respondent argued that while the pictures may show some superficial damage to several support systems, there was no change that could impair support of the pipeline system. Hopkinton also argued that its reports show that in 2009 and 2010, all of the support systems and/or foundations were, in fact, inspected. While PHMSA may not agree with the rankings Hopkinton gave to the support systems and need for repair, the evidence shows that they were indeed inspected. Hopkinton has also provided additional information regarding the areas PHMSA asserted showed detrimental changes. After reviewing the photographs and other information provided by Hopkinton, I find that the alleged changes to the support structures were only superficial. Accordingly, after considering all of the evidence, I find that Hopkinton inspected each support system or foundation of each component for any detrimental change pursuant to § 193.2609 and hereby order that Item 1, along with its related penalty and corrective action, be withdrawn. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a), which states: § 193.2625 Corrosion protection. (a) Each operator shall determine which components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a) by failing to determine which metallic components could, unless corrosion were controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. Specifically, the Notice alleged that Hopkinton had never determined, during the period since their installation in 1970, whether the carbon steel bottoms of three LNG tanks at the Hopkinton LNG facility had been adversely affected by external corrosion.#

120123001_Final Order_02032014_text.pdf, page 43 In its Response, Hopkinton contested this allegation, arguing that it had made a determination, on two separate occasions, that the bottoms on the three tanks were not susceptible to atmospheric corrosion: first, when it selected the initial design and installed the tanks in the 1970’s; second, when it reconfirmed the tank bottoms’ integrity in 2009. In support of its position, Hopkinton provided detailed information regarding the construction of the tanks and two affidavits from employees declaring that they had initiated and ultimately made a determination regarding whether the tank bottoms would be susceptible to atmospheric corrosion. Hopkinton failed, however, to provide any written documentation showing it had actually conducted an engineering evaluation or assessment resulting in a formal determination that the three tanks were not susceptible to atmospheric corrosion. Instead, Respondent merely submitted information showing its conclusion that there was no risk of atmospheric corrosion. Implicit in the regulation is a requirement that any determination be properly documented, using acceptable engineering methods and based on sound engineering judgment. Furthermore, even if we assume, arguendo, that Hopkinton did perform some sort of informal engineering review or analysis, it is essential under Subpart G of Part 193 that such a process be documented. Under 49 C.F.R. § 193.2639(c)(2), an operator must keep records showing each test, survey, or inspection conducted under Subpart G to show the adequacy of the corrosion control measures taken to protect against the threat of corrosion. I do not believe, in this instance, that the evidence provided by Respondent is sufficient to demonstrate the company made an adequate determination that the integrity or reliability of the three tank bottoms could not be adversely affected by corrosion. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(a) by failing to adequately determine whether its three LNG tanks were susceptible to atmospheric corrosion. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b), which states, in relevant part: § 193.2605 Maintenance procedures. (a) . . . (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedures must include: (1) The details of the inspection or tests determined under paragraph (a) of this section and their frequency of performance; . . . . The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b) by failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. Specifically, it alleged that Hopkinton’s procedures failed to prescribe how prompt corrective or remedial action would be taken whenever the company learned, either by inspection or otherwise, that atmospheric, external or internal corrosion was not being controlled as required by Subpart G. The Notice further alleged that Hopkinton’s 2005 and 2008#

120123001_Final Order_02032014_text.pdf, page 54 atmospheric corrosion monitoring inspections had revealed that crevice corrosion existed where the pipe was resting directly on a pipe support or trestle, yet the company had no specific procedure to deal with this type of specific situation. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2605(b) by failing to have written procedures setting forth the action needed to be taken when crevice corrosion issue had been identified. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 193.2639(a), which states: § 193.2639 Maintenance records. (a) Each operator shall keep a record at each LNG plant of the date and type of each maintenance activity performed on each component to meet the requirements of this part. For each LNG facility that is designed and constructed after March 31, 2000, the operator shall also maintain related periodic inspection and testing records that NFPA 59A (incorporated by reference, see § 193.2013) requires. Maintenance records, whether required by this part or NFPA 59A, must be kept for a period not less than five years. The Notice alleged that Respondent violated 49 C.F.R. § 193.2639(a) by failing to keep a record of the date and type of each maintenance activity performed on each component to meet the requirements of Part 193. Specifically, the Notice alleged that Hopkinton failed to keep a record of the atmospheric corrosion observations made by company personnel at pipe/soil interfaces. It further alleged that Hopkinton did not document any atmospheric corrosion procedures at these particular points, as required in Section 3.6C of the company’s own Corrosion Control Procedures. In support of its position, PHMSA identified two corrosion reports from 2005 and 2008 that did not conform to Section 3.6 of Hopkinton’s own procedures. Additionally, PHMSA noted that during its inspection in 2010, areas of corrosion were present that had not been identified in the company’s earlier corrosion surveys. Hopkinton contested this allegation of violation. Specifically, Respondent pointed to its October 28, 2005 and October 8, 2008 records detailing the findings of its atmospheric corrosion inspections. 3 Hopkinton’s records indicate that an inspection had occurred in 2008 and noted various areas in need of attention. It is Hopkinton’s position that the records satisfy the requirement in § 193.2639(a) that it record the date and type of each maintenance activity performed under Part 193. I disagree. Although the 2005 and 2008 records show that Hopkinton conducted corrosion inspections in a timely matter, they do not show that the inspections gave “particular attention at soil-to-air interfaces,” as required under the company’s own procedures under § 193.2605, and that the company recorded information of such observations during the inspection. 3 See, Violation Report Exhibit A-4 and A-6.#

120123001_Final Order_02032014_text.pdf, page 65 Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2639(a) by failing to keep a record of the atmospheric corrosion observations made by company personnel at pipe/soil interfaces. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b)(1), as quoted above, by failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. Specifically, it alleged that Hopkinton failed to follow its own procedures, namely, Corrosion Procedures, Section 3.6C, which required that “[p]ipelines exposed to the atmosphere will be inspected at least once every three years, at intervals not to exceed thirty-nine months” and that particular attention be paid to areas under thermal insulation. According to the Notice, Hopkinton failed to follow these procedures because not all pipe segments exposed to the atmosphere were inspected every three years and because the company’s procedures failed to specify a schedule establishing the frequency of inspections.4 In its Response, Hopkinton contended that its actions were within full compliance of § 193.2605 and its own procedures for monitoring corrosion control. Respondent contended: a) its procedures only required the inspection of its insulated pipeline when the insulation was removed; b) it was not required to remove the insulation to inspect for corrosion; c) removal of the insulation for routine inspections would be detrimental to the pipeline; and d) based upon the type of pipe material used, i.e., stainless steel, it would not be subject to atmospheric corrosion. I do not find these arguments convincing. First, PHMSA has not asserted that Hopkinton must remove all of its insulation every three years to inspect components for atmospheric corrosion. Instead, the Violation Report specifically references Section 3.6C of Respondent’s own corrosion procedures, which requires that the company pay particular attention to piping under thermal insulation. Hopkinton’s 2008 report notes that it didn’t inspect any areas that were covered with thermal insulation. Second, I would note that there are inconsistencies in Respondent’s procedures. Section 3.6C states that the components covered by thermal insulation are to be paid particular attention, while Section 3.6E states that the components are only to be inspected when the insulation is removed. These procedural inconsistencies, however, do not negate the requirements set forth in 49 C.F.R. § 193.2605 and § 193.2635(d). Third, § 193.2605 requires operators to periodically inspect their LNG plant and components. The inspection of any component protected from atmospheric corrosion must be conducted at least every three years. The regulation is silent as to the issue of whether all of the insulation must be removed for the inspection, but it clearly states that each component must be inspected for atmospheric corrosion and the company’s own procedures require that particular attention be given to pipe under thermal insulation. Fourth, the regulation makes no distinction between pipelines made with different material, stainless steel or otherwise. As noted in Hopkinton’s 2008 inspection report, it did not inspect components for atmospheric corrosion that were insulated. Therefore, Hopkinton was in violation of its own procedures for failing to conduct inspections of components under thermal insulation at intervals not exceeding three years. 4 Pipeline Safety Violation Report (Violation Report), (April 2, 2012) (on file with PHMSA), at 3.#

120123001_Final Order_02032014_text.pdf, page 76 Accordingly, after considering all of the evidence I find that Respondent violated 49 C.F.R. § 193.2605 by failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. These findings of violation contained in Items 2, 3, and 5 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, 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 $64,600 for the violations cited above. Item 1: The Notice proposed a civil penalty of $32,500 for Respondent’s violation of 49 C.F.R. § 193.2609, for failing to inspect some of its support systems and foundations to identify detrimental changes that could impair support. As noted above, I found that Hopkinton did inspect each support system or foundation of each component for any detrimental change pursuant to § 193.2609. Based upon such finding, I hereby withdraw the proposed penalty for violation of 49 C.F.R. § 193.2609. Item 5: The Notice proposed a civil penalty of $32,100 for Respondent’s violation of 49 C.F.R. § 193.2605, for failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. As discussed above, I found that Respondent failed to inspect under all of its thermal insulation for evidence of atmospheric corrosion every three years, despite the express language contained in Section 3C of its Operator’s Corrosion Procedures. Hopkinton’s failure to properly inspect portions of its pipeline that are thermally insulated could have severe consequences. Corrosion, left unchecked, can lead to pipeline leaks, causing extensive property damage, injuries and clean-up costs. The fact that no accident occurred in this instance is reflected in the penalty being assessed in this instance. While Hopkinton contends that its current insulation inspection practices are appropriate and evidence of its good-faith efforts, its own inspection report from 2008 states that “pipelines covered with insulation were not inspected.” Therefore, I find no basis for a reduction of the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $32,100 for violation of 49 C.F.R. § 193.2605. 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 $32,100.#

120123001_Final Order_02032014_text.pdf, page 87 Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to 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, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893. Failure to pay the $32,100 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 district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 2, 3, 4 and 5 in the Notice for violations of 49 C.F.R. §193. Item 1 has been withdrawn so no compliance terms are included in this Order. 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 § 193.2625(a) (Item 2), Respondent must determine if the outer LNG tank bottoms could have their integrity or reliability adversely affected by external corrosion unless external corrosion were controlled. Hopkinton has stated that it has already commissioned R.A. Hoffman Engineering to perform an assessment and determination regarding the three LNG tank bottoms. Respondent shall complete the determination within 180 days of the receipt of the Final Order, and submit it to the Regional Director for review. If necessary, Hopkinton shall establish a remediation plan based upon that determination. 2. With respect to the violation of § 193.2605 (Item 3), Respondent must incorporate into its corrosion procedures empirical measurements relating its Good, Fair, and Poor evaluations to pipe-wall loss, with appropriate remedial actions specified to deal with these severity ratings. This shall be completed within 90 days of receipt of the Final Order, followed by a reevaluation of its pipelines on supports or trestles within 180 days of receipt of the Final Order. 3. With respect to the violation of § 193.2639(a) (Item 4), Respondent must expand its procedures to identify the relevant pipelines and to describe the monitoring process of the soil-to-air interface of all pipelines subject to Part 193. This shall be completed within 60 days of receipt of the Final Order. Within 180 days of the receipt of the#

120123001_Final Order_02032014_text.pdf, page 98 Final Order, Hopkinton shall reexamine its pipe-to-soil interfaces for the presence of atmospheric corrosion. Should remedial action be deemed necessary, it shall be accomplished in accordance with the procedures established in Item 3 above. 4. With respect to the violation of § 193.2605(b) (Item 5), Respondent must revise Section 3.6E of its Corrosion Procedures to require monitoring of all pipe exposed to the atmosphere, at intervals no greater than 3 years. The procedure shall make provisions for inspecting under thermally insulated pipe. The procedures shall be revised within 30 days of receipt of the Final Order. Hopkinton shall inspect all piping under thermal insulation within 12 months of issuance of the Final Order. Should remedial action be deemed necessary, it shall be accomplished in accordance with the revised procedures established for Item 3 above. 5. It is requested (not mandated) that Hopkinton LNG maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Byron Coy, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration, 820 Bear Tavern Rd., Suite 103, W. Trenton, NJ 08628. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans procedures, studies and analysis; and 2) total 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 $200,000 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. Under 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of this Final Order. The petition 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 service of this Final Order by the Respondent, provided they contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. 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#

120123001_Amended Final Order_03052014_text.pdf, page 1Official PDFMARCH 5, 2014 Mr. Tom May President NSTAR Electric & Gas Corp. One NSTAR Way Westwood, MA 02090 RE: In the Matter of Hopkinton LNG Corp. [CPF No. 1-2012-3001] Dear Mr. May: I am writing in further reference to the Final Order, dated February 3, 2014, that was issued by PHMSA in the above-referenced case to your subsidiary, Hopkinton LNG Corp. We subsequently received a letter, dated February 14, 2014, from James B. Curry, Esq., counsel for Hopkinton, requesting an extension of time to file a Petition for Reconsideration in the case. Prior to receipt of Mr. Curry’s letter, however, PHMSA staff had already discovered an error in Paragraph No. 4 (relating to Item #5 of the Notice of Probable Violation) of the Compliance Order section of the Final Order, relating to the inspection of pipe under thermal insulation. We are therefore issuing the enclosed Amended Final Order to correct the error. All other provisions of the original Final Order, including the assessed penalty of $31,100 and the remaining compliance terms, remain in effect. The issuance of the Amended Final Order means that Hopkinton will have 20 days from the date of receipt of this letter to file a Petition for Reconsideration if it still wishes to do so. Accordingly, counsel’s request for an extension of time is no longer needed and is therefore denied as moot. Please accept my apologies for any inconvenience this error may have caused. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: OPS Compliance Registry Mr. Byron Coy, Director, Eastern Region, OPS James B. Curry, Esquire, VanNess Feldman, LLP, Counsel for LNG Hopkinton Corp., 1050 Thomas Jefferson Street, Seventh Floor, NW Washington, D.C., 20007 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120123001_Amended Final Order_03052014_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 ) ) Hopkinton LNG Corp., ) CPF No. 1-2012-3001 ) Respondent. ) ____________________________________) AMENDED FINAL ORDER On October 4, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities of Hopkinton LNG Corp. (Hopkinton or Respondent) in Hopkinton, Massachusetts. Hopkinton, a subsidiary of NSTAR Electric and Gas Corp., 1 operates liquefied natural gas (LNG) facilities in Hopkinton and Acushnet, Massachusetts, to supplement pipeline supply during winter months.2 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated April 2, 2012, a Notice of Probable Violation, a Proposed Civil Penalty and a Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Hopkinton had committed various violations of 49 C.F.R. Part 193, assessing a civil penalty of $64,600 for the alleged violations, and ordering Respondent to take certain measures to correct the alleged violations. Hopkinton responded to the Notice by letter dated April 24, 2012, requesting a hearing and additional time to respond to the Notice. On May 30, 2012, Hopkinton provided its response to the Notice, contested the allegations, presented information seeking elimination of the proposed penalty, and withdrew its request for a hearing, thereby authorized the entry of this Final Order without further notice. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 193, as follows: 1 NSTAR is an operating company of Northeast Utilities. See http://www.nstar.com/about_nstar/, last viewed December 16, 2013. 2 See http://www.nstar.com/about_nstar/nonreg.asp, last viewed December 16, 2013.#

120123001_Amended Final Order_03052014_text.pdf, page 32 Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 193.2609, which states: § 193.2609 Support systems. Each support system or foundation of each component must be inspected for any detrimental change that could impair support. The Notice alleged that Respondent violated 49 C.F.R. § 193.2609 by failing to inspect some of its support systems and foundations for detrimental changes that could impair support. Specifically, the Notice alleged that Hopkinton failed in 2009 and 2010 to inspect some of the support systems and foundations at its LNG facility for detrimental changes. In support of its position PHMSA provided eight photographs showing areas it believed showed changes to the support systems that were not listed in Hopkinton’s reports. In its Response, Hopkinton contested this allegation of violation, providing pictures and information of the support systems that PHMSA had asserted were showing signs of deterioration and detrimental change. Respondent argued that while the pictures may show some superficial damage to several support systems, there was no change that could impair support of the pipeline system. Hopkinton also argued that its reports show that in 2009 and 2010 all of the support systems and/or foundations were, in fact, inspected. While PHMSA may not agree with the rankings Hopkinton gave to the support systems and need for repair, the evidence shows that they were indeed inspected. Hopkinton has also provided additional information regarding the areas PHMSA asserted showed detrimental changes. After reviewing the pictures provided by Hopkinton, the additional information it provided regarding those pictures and the initial inspection reports, I find that the alleged changes to the support structures were only superficial. Accordingly, after considering all of the evidence, I find that Hopkinton inspected each support system or foundation of each component for any detrimental change pursuant to § 193.2609 and hereby order that Item 1, along with its related penalty and corrective action, be withdrawn. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a), which states: § 193.2625 Corrosion protection. (a) Each operator shall determine which components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a) by not determining which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. Specifically, the Notice alleged that Hopkinton has never determined, during the period since their installation in 1970, whether the carbon steel bottoms of three LNG tanks had been adversely affected by external corrosion.#

120123001_Amended Final Order_03052014_text.pdf, page 43 In its Response, Hopkinton contested this allegation, arguing that it had made a determination, on two separate occasions, that the bottoms on the three tanks were not susceptible to atmospheric corrosion, first, when it selected the initial design and installed the tanks in the 1970’s and, second, in 2009. In support of its position, Hopkinton provided detailed information regarding the construction of the tanks and two affidavits from employees declaring that they had initiated and ultimately made a determination regarding whether the tank bottoms would be susceptible to atmospheric corrosion. Hopkinton failed, however, to provide any written documentation showing that it had actually conducted an evaluation or assessment and had ultimately made a determination that the three tanks are not susceptible to atmospheric corrosion. Respondent merely submitted information suggesting there was no atmospheric corrosion, but no final determination. Even if we assume, arguendo, that Hopkinton did perform some sort of informal engineering review or analysis, it is essential under Subpart G of Part 193 that such a process be documented. Under 49 C.F.R. § 193.2639(c)(2), an operator must keep records showing each test, survey, or inspection conducted under Subpart G in order to show the adequacy of the corrosion control measures taken to protect against the threat of corrosion. I do not believe, in this instance, that the evidence provided by Respondent is sufficient to demonstrate the company made an actual determination that the integrity or reliability of the three tank bottoms could be adversely affected by corrosion. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(a) by failing to adequately determine whether its three LNG tanks are susceptible to atmospheric corrosion. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b), which states, in relevant part: § 193.2605 Maintenance procedures. (a) . . . (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedures must include: (1) The details of the inspection or tests determined under paragraph (a) of this section and their frequency of performance; . . . . The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b) by failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. Specifically, it alleged that Hopkinton’s procedures failed to prescribe how prompt corrective or remedial action would be taken whenever the company learned, either by inspection or otherwise, that atmospheric, external or internal corrosion was not being controlled as required by Subpart G. The Notice further alleged that Hopkinton’s 2005 and 2008 atmospheric corrosion monitoring inspections had revealed that crevice corrosion existed where the pipe was resting directly on a pipe support or trestle, yet the company had no specific procedure to deal with this type of specific situation.#

120123001_Amended Final Order_03052014_text.pdf, page 54 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2605(b) by failing to have written procedures setting forth the action needed to be taken when crevice corrosion issue had been identified. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 193.2639(a), which states: § 193.2639 Maintenance records. (a) Each operator shall keep a record at each LNG plant of the date and type of each maintenance activity performed on each component to meet the requirements of this part. For each LNG facility that is designed and constructed after March 31, 2000, the operator shall also maintain related periodic inspection and testing records that NFPA 59A (incorporated by reference, see § 193.2013) requires. Maintenance records, whether required by this part or NFPA 59A, must be kept for a period not less than five years. The Notice alleged that Respondent violated 49 C.F.R. § 193.2639(a) by failing to keep a record of the date and type of each maintenance activity performed on each component to meet the requirements of Part 193. Specifically, the Notice alleged that Hopkinton failed to keep a record of the atmospheric corrosion observations made by company personnel at pipe/soil interfaces. It further alleged that Hopkinton did not document any atmospheric corrosion procedures at these particular points, as required in Section 3.6C of the company’s own Corrosion Control Procedures. In support of its position, PHMSA identified two corrosion reports from 2005 and 2008 that did not conform to Section 3.6 of Hopkinton’s procedures. Additionally, PHMSA noted that during its inspection in 2010, areas of corrosion were present but had not been identified in the company’s earlier corrosion surveys. Hopkinton contested this allegation of violation, based upon these same corrosion reports from 2005 and 2008. Specifically, Respondent, pointed to its October 28, 2005 and October 8, 2008 records detailing the findings of its atmospheric corrosion inspections. 3 Hopkinton’s records indicate that an inspection occurred in 2008, noting various areas in need of attention. It is Hopkinton’s position that the records satisfy the requirement in § 193.2639(a) that it record the date and type of each maintenance activity performed under Part 193. I disagree. Although the 2005 and 2008 records show that Hopkinton conducted corrosion inspections in a timely matter, they do not show that the inspections gave “particular attention at soil-to-air interfaces,” as required under the company’s own procedures under § 193.2605, and that the company kept proper records of such observations. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2639(a) by failing to keep a record of the atmospheric corrosion observations made by company personnel at pipe/soil interfaces. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 193.2605(b)(1), as quoted 3 See, Violation Report Exhibit A-4 and A-6.#

120123001_Amended Final Order_03052014_text.pdf, page 65 above, by failing to follow a manual of written procedures for the maintenance of each component of its system, including any corrosion control. Specifically, it alleged that Hopkinton failed to follow its own procedures, specifically: Corrosion Procedures, Section 3.6C, which required that “[p]ipelines exposed to the atmosphere will be inspected at least once every three years, at intervals not to exceed thirty-nine months” and that particular attention be given under thermal insulation. According to the Notice, Hopkinton failed to follow these procedures because not all pipe segments exposed to the atmosphere were inspected every three years and because the company’s procedures failed to specify a schedule establishing the frequency of inspections.4 In its Response, Hopkinton contends that its actions are within full compliance of § 193.2605 and its procedures for monitoring corrosion control. It is Respondent’s position that: a) its procedures only require the inspection of its insulated pipeline when the insulation is removed; b) it is not required to remove the insulation; c) removing the insulation would be detrimental to the pipeline; and d) based upon the type of material used to create the line, stainless steel, it does not corrode. PHMSA has not asserted that Hopkinton must remove all of its insulation to inspect components for atmospheric corrosion, every three years. The violation report specifically references Section 3.6C of Respondent’s corrosion procedures, which require that the company pay particular attention to piping under thermal insulation. Hopkinton’s 2008 report notes that it didn’t inspect any areas that were covered with thermal insulation. Additionally, it is noted that there are inconsistencies in Respondent’s procedures. Section 3.6C states that the components covered by thermal insulation are to be paid great attention, while Section 3.6E states that the components are only to be inspected when the insulation is removed. Hopkinton’s procedural inconsistencies do not supersede the Federal Regulations and the requirements set forth therein, specifically § 193.2605 and § 193.2635(d). Section 193.2605 requires operators to periodically inspect its LNG plant and components. The inspection of any component protected from atmospheric corrosion must be conducted at least every three years. The regulation is silent as to the issue of whether all of the insulation must be removed for the inspection, but it clearly states that each component must be inspected for atmospheric corrosion and the company’s own procedures require that particular attention must be given to pipe under thermal insulation. Additionally, the regulation makes no differentiation between pipelines made with different material, stainless steel or otherwise. As noted in Hopkinton’s 2008 inspection, it did not inspect components for atmospheric corrosion that were insulated. Therefore, Hopkinton is in violation of § 192.2603. Accordingly, after considering all of the evidence I find that Respondent violated 49 C.F.R. § 193.2605 by failing to follow a manual of written procedures to ensure that thermally insulated piping is inspected and replaced under a program of scheduled maintenance. Specifically, the Hopkinton failed to inspect under its thermal insulation for evidence of atmospheric corrosion every three years, despite the express language contained in Section 3C of its Operator’s Corrosion Procedures. 4 Pipeline Safety Violation Report (Violation Report), (April 2, 2012) (on file with PHMSA), at 3.#

120123001_Amended Final Order_03052014_text.pdf, page 76 The findings of violation contained in Item’s 2, 3, and 5 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, 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 $64,600 for the violations cited above. Item 1: The Notice proposed a civil penalty of $32,500 for Respondent’s violation of 49 C.F.R. § 193.2609, for failing to inspect some of its support systems and foundations to identify detrimental changes that could impair support. As noted above, I found that Hopkinton did inspect each support system or foundation of each component for any detrimental change pursuant to § 193.2609. Based upon such finding, I hereby withdraw the proposed penalty for violation of 49 C.F.R. § 193.2609. Item 5: The Notice proposed a civil penalty of $32,100 for Respondent’s violation of 49 C.F.R. § 193.2605, for failing to follow a manual of written procedures to ensure that thermally insulated piping is inspected and replaced under a program of scheduled maintenance. Respondent violated 49 C.F.R. § 193.2605 by failing to inspect under all of its thermal insulation for evidence of atmospheric corrosion every three years, despite the express language contained in Section 3C of its Operator’s Corrosion Procedures. Hopkinton’s failure to properly inspect portions of its pipeline that are thermally insulated for corrosion could have had drastic consequences. Corrosion, if left unchecked, can lead to pipeline leaks, causing extensive property damage, injuries and clean-up costs. The fact that no accident occurred in this instance, is reflected in the penalty being assessed in this instance. While Hopkinton contends that its current insulation inspection practices are appropriate and evidence of its good faith efforts, its own report from 2008 states that “pipelines covered with insulation were not inspected.” Therefore, no reduction of the penalty is appropriate in this instance. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $32,100 for violation of 49 C.F.R. § 193.2605. 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 $32,100. Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal#

120123001_Amended Final Order_03052014_text.pdf, page 87 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, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893. Failure to pay the $32,100 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 district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 2, 3, 4 and 5 in the Notice for violations of 49 C.F.R. §193. Item 1 has been withdrawn. 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 § 193.2625(a) (Item 2), Respondent must determine if the outer LNG tank bottoms could have their integrity or reliability adversely affected by external corrosion unless external corrosion were controlled. Hopkinton has stated that it has already commissioned R.A. Hoffman Engineering to perform an assessment and determination regarding the three LNG tank bottoms. Respondent shall complete the determination within 180 days of the receipt of this Amended Final Order, and submit it to the Regional Director for review. If necessary, Hopkinton shall establish a remediation plan based upon the determination. 2. With respect to the violation of § 193.2605 (Item 3), Respondent must incorporate into its corrosion procedures empirical measurements relating its Good, Fair, and Poor evaluations to pipe-wall loss, with appropriate remedial actions specified to deal with these severity ratings. This shall be completed within 90 days of receipt of this Amended Final Order, followed by a reevaluation of its pipelines on supports or trestles within 180 days of receipt of this Amended Final Order. 3. With respect to the violation of § 193.2639(a) (Item 4), Respondent must expand its procedures to identify the relevant pipelines and to describe the monitoring process of the soil to air interface of all pipelines subject to Part 193. This shall be completed within 60 days of receipt of this Amended Final Order. Within 180 days of the receipt of the Amended Final Order, Hopkinton shall reexamine its pipe to soil#

120123001_Amended Final Order_03052014_text.pdf, page 98 interfaces for the presence of atmospheric corrosion. Should remedial action be deemed necessary, it shall be accomplished in accordance with the procedures established in Item 3 above. 4. With respect to the violation of § 193.2605(b) (Item 5), Respondent must revise its Corrosion Procedures to include detailed instructions for inspections of a sampling of the pipeline under thermal insulation, at intervals not exceeding three years. The procedures shall include details on the selection of sample locations that may be more prone to corrosion. The procedures shall be revised within 30 days of receipt of this Amended Final Order. Should remedial action be deemed necessary, it shall be accomplished in accordance with the revised procedures established for Item 3 above. 5. It is requested (not mandated) that Hopkinton LNG maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Mr. Byron Coy, Director, Eastern Region, Pipeline and Hazardous materials Safety Administration, 820 Bear Tavern Rd., Suite 103, W. Trenton, NJ 08628. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans procedures, studies and analysis; and 2) total 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 $200,000 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. Under 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of this Amended Final Order. The petition 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 service of this Final Order by the Respondent, provided they contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. Unless the Associate Administrator, upon request, grants a stay, the terms and conditions of this Amended 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#

120123001_Closure Letter_12172014_text.pdf, page 1Official PDFU.S. Department Of Transportation Pipeline and 609.989.2171 Hazardous Materials Safety Administration 820 Bear Tavern Road, Suite 103 West Trenton, NJ 08628 OVERNIGHT EXPRESS MAIL December 17, 2014 Mr. Tom May President NSTAR Electric & Gas Corp. One NSTAR Way Westwood, MA 02090 CPF 1-2012-3001 Dear Mr. May: On March 5, 2014, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Hopkinton LNG Co. (Hopkinton) (a subsidiary of NSTAR Electric & Gas Corp.) an Amended Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. On March 26, 2014, Hopkinton filed a Petition for Reconsideration. By letter dated September 2, 2014, Hopkinton responded and provided documentation in accordance with the Compliance Order. On November 24, 2014, PHMSA issued a Decision denying in part and granting in part Hopkinton’s Petition for Reconsideration, with a reduced civil penalty. 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#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 1Official PDFNOVEMBER 24, 2014 Mr. Lee Olivier, President Hopkinton LNG Corp. Northeast Utilities 107 Selden Street Berlin, Connecticut 06037 Re: CPF No. 1-2012-3001 Dear Mr. Olivier: Enclosed is the Decision on the Petition for Reconsideration filed by Hopkinton LNG Corp., in the above-referenced case. For the reasons specified in the Decision, the Petition is denied in part and granted in part, with a reduced civil penalty of $19,688. The penalty terms are set forth in the Amended Final Order. When the civil penalty has been paid and the terms of the compliance order completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Decision 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 Coy, P.E., Director, Eastern Region, OPS James B. Curry, Esq., Van Ness Feldman LLP, Counsel for Petitioner 1050 Thomas Jefferson Street, NW, Washington, D.C. 20007 Mr. Paul J. Zohorsky, Vice President – NSTAR Gas Company, Northeast Utilities, One NSTAR Way, SUM NE370, Westwood, Massachusetts 02090 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120123001_Decision on Petition for Reconsideration_11242014_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 ) ) Hopkinton LNG Corp., ) CPF No. 1-2012-3001 ) Respondent. ) ____________________________________) DECISION ON PETITION FOR RECONSIDERATION On February 3, 2014, pursuant to chapter 601, title 49, of the United States Code, the Associate Administrator for Pipeline Safety (Associate Administrator), Pipeline and Hazardous Materials Safety Administration (PHMSA), issued a Final Order against Hopkinton LNG Corp. (Hopkinton or Petitioner), finding that Petitioner had committed four violations of the Pipeline Safety Regulations, codified at 49 C.F.R. Part 193, assessing a civil penalty in the amount of $32,100, and ordering Respondent to take certain measures to correct the alleged violations. On March 5, 2014, the Associate Administrator issued an Amended Final Order (Amended Order), changing the scope and timeframe for completing the terms of the compliance order relating to Paragraph No. 4 of the Compliance Order (Item #5 of the Final Order). The findings of violation and penalties were not amended. On March 26, 2014, Hopkinton submitted a Petition for Reconsideration (Petition) of the Amended Order. In its Petition, Hopkinton seeks to have Item #5 of the Amended Order withdrawn or amended to only require an amendment of the company’s procedures and to have the civil penalty withdrawn. Having reviewed the record and considered the Petition, I find no reason to disturb either the finding of violation for Item No. 5 of the Amended Order or its associated Compliance Order, but have reduced the penalty for that Item to $19,688.00. Standard of Review In enforcement proceedings brought under 49 C.F.R. Part 190, respondents are afforded the right to petition the Associate Administrator for reconsideration of a final order. That right, however, does not constitute an appeal or an opportunity to seek a de novo review of the record. On the contrary, it is an opportunity for respondents to present the Associate Administrator with information that was not previously available or to request that errors in the final order be corrected. Under 49 C.F.R. § 190.215, the Associate Administrator does not consider repetitious information, arguments, or petitions. In addition, any request for consideration of additional#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 3CPF No: 1-2012-3001 Page 2 facts or arguments must be supported by a statement of reasons as to why those facts or arguments were not presented prior to the issuance of the final order. Discussion Hopkinton seeks reconsideration of one finding of violation in the Amended Order, namely, Item No. 5, and its associated penalty of $32,100, and requests that the Compliance Order be converted to a Notice of Amendment (NOA). Specifically, Hopkinton contests the finding that the company violated 49 C.F.R. § 193.2605(b)(1) by failing to properly follow its own procedure, Corrosion Procedures, Section 3.6C (Section 3.6C), which required the company to ensure that thermally insulated piping was inspected every three years. 1 The Amended Order found that Section 3.6C2 required Hopkinton every three years to inspect all of its piping that was exposed to the atmosphere and to pay particular attention to those areas under thermal insulation, but that the company had failed to inspect all such piping within a three-year period. In its Petition, Hopkinton makes three principal arguments. First, it claims that PHMSA failed in the Amended Order to consider evidence presented by the company that it did, in fact, properly and timely inspect its piping exposed to atmospheric corrosion, including portions under thermal insulation, according to its own procedures.3 Second, it asserts that under its procedures, Hopkinton did not need to inspect stainless steel piping since it was not susceptible to atmospheric corrosion.4 Third, it asserts that the civil penalty assessed for Item 5 1 The Notice alleged that Hopkinton violated 49 C.F.R. § 193.2605(b)(1), which requires operators to follow their own manual(s) of written procedures for the maintenance of each component, including any required corrosion control. Such procedures must include the details of all inspections or tests required under Subpart G of 49 C.F.R. Part 193. Section 193.2635(d) of that subpart states: “Each component that is protected from atmospheric corrosion must be inspected at intervals not exceeding 3 years.” 2 Section 3.6 is entitled “Atmospheric Corrosion Control” and includes procedures for inspecting different kinds of pipe exposed to the atmosphere and for rating different levels of corrosion. Paragraph C states: C. Pipelines exposed to the atmosphere will be inspected at least once every three years, at intervals not to exceed thirty-nine months. Pipelines will be inspected and information recorded regarding: Coating quality, existing corrosion (localized or general; good, fair or poor), erosion, condition of fittings and support integrity. Particular attention shall be given at soil-to-air interfaces, under thermal insulation, under disbonded coatings, at pipe supports, in splash zones, at deck penetrations, and in spans over water. Pipeline Safety Violation Report, dated March 30, 2012 (Violation Report) (on file with PHMSA), Exhibit A-5, at 10. 3 Petition at 2-4, 6-7. 4 Id. at 5.#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 4CPF No: 1-2012-3001 Page 3 is not supported by the record and that an NOA would be a more appropriate remedy to address any perceived inadequacies in its corrosion protection procedures. 5 I will first address the procedural issue presented by the Petition. Under the standard of review set forth in 49 C.F.R. § 190.215, a petitioner may not present “repetitious” arguments or information previously presented and that if it seeks to, must include a statement indicating why the new information was not presented prior to issuance of the final order. Upon careful review of the Petition and the record, I can find no new facts or arguments in the Petition that were not presented, to some degree, in Hopkinton’s original response to the Notice (Response).6 Instead, the Petition asserts that PHMSA, in the Amended Order, simply “misunderstood” the company’s procedures, ignored certain evidence presented in the Response, and assessed a penalty not supported by the evidence. These are arguments that would normally be put forward in a judicial appeal but do not serve as a legitimate basis for an administrative petition for reconsideration. Accordingly, I find that the Petition fails to meet the procedural requirements of 49 C.F.R. § 190.215 and could be dismissed on that basis. Notwithstanding such procedural defects, I have reviewed the record regarding Item No. 5 and have considered the substantive arguments raised in the Petition. As noted above, Hopkinton makes three basic arguments. First, it argues that it complied with Section 3.6 because it did remove thermal insulation and inspect components for corrosion in 2007, 2008 and 2009, as demonstrated by Attachment 9 to its Response.7 However, Hopkinton does not dispute the allegation in the Notice that the plain language of Section 3.6C provides that “pipelines exposed to the atmosphere will be inspected at least once every three years” and that “particular attention shall be given . . . under thermal insulation.” Instead, Petitioner argues that the general requirement of Section 3.6C is circumscribed by Paragraph E of that same section, which states that the company will “[i]nspect piping covered by thermal insulation whenever said insulation is removed. The Corrosion Engineer may require a program where systematic inspection of structures covered by thermal insulation is required.”8 The Amended Order found these two provisions to be inconsistent, but Petitioner asserts that they are indeed consistent and actually serve to limit the obligation of the company to inspect piping under insulation every three years. While the two provisions may fairly be characterized as inconsistent or confusing, I have reviewed Section 3.6 closely and find that the most reasonable interpretation of the two provisions is that Paragraph E acts as a requirement in addition to Paragraph C. In other words, the procedures must be interpreted as requiring that all piping exposed to the atmosphere must be inspected every three years and, in addition, that if insulation happens to be removed from piping 5 Id. at 7-10. 6 Hopkinton does include with its Petition a copy of the new procedures for atmospheric corrosion inspections it adopted subsequent to the inspection in 2010, but these are not relevant to the issue of whether a violation occurred. 7 Petition at 4. 8 Id. at 6.#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 5CPF No: 1-2012-3001 Page 4 at any time, then the pipe underneath must also be inspected for external corrosion.9 Any other reading would be inconsistent with the requirement in 49 C.F.R. § 193.2635(d) that “each component protected from atmospheric corrosion must be inspected at intervals not exceeding 3 years” and the requirement in Hopkinton’s own Section 3.6C that particular attention be paid to pipe under thermal insulation. Given the heightened scrutiny that Hopkinton’s own procedures dictate for piping under insulation, it would be illogical to suggest that Paragraph E provides for a more lenient inspection standard and schedule than the three-year schedule imposed under both Paragraph C and 49 C.F.R. § 193.2635(d). Furthermore, there is nothing in the record (including Attachment 9 of the Response), to disprove PHMSA’s allegation that Hopkinton failed to inspect all of its piping exposed to the atmosphere at least once every three years. Although it appears that the company did have a process in place to remove and inspect underneath thermal insulation under certain circumstances, it does not appear that a procedure was in place to ensure that all such piping, including lines and components under insulation, were inspected within that three-year interval. In fact, the Petition concedes: …[O]f approximately 1510 feet of carbon steel piping under insulation in flammable gas and amine service at the LNG facility, the P&IDs included with the 2007, 2008 and 2009 reports demonstrate that Hopco removed insulation and inspected approximately 327 feet of carbon steel piping in 2007, 2008, and 2009. Thus, during the triennial period, Hopco inspected a sampling of approximately 20 percent of the carbon steel piping at the LNG facility.10 Thus, Petitioner acknowledges that it did not inspect all of its pipelines exposed to the atmosphere within the three-year period required by its own procedures. Nowhere do Hopkinton’s own procedures suggest that inspecting a sampling of piping under insulation over a three-year period is acceptable or that pipe under insulation need only be inspected when the pipe is replaced. 11 Second, Petitioner argues that since more than 90 percent of the thermally insulated piping at Hopkinton’s LNG facility consists of stainless steel, the company is not required to inspect this piping for external corrosion every three years under § 193.2635(d).12 Hopkinton raised this 9 The second sentence of Paragraph E provides that the Corrosion Engineer “may require a program where systematic inspection of structures covered by thermal insulation is required.” Such a discretionary program still appears to conflict with Paragraph 3.6C and 49 C.F.R § 193.2935(d), which require all piping exposed to the atmosphere to be inspected every three years. 10 Petition at 7. 11 There is no evidence that the inspections conducted by Hopkinton for atmospheric corrosion of piping under thermal insulation during the relevant time period were performed in accordance with the company’s Corrosion Control Procedures, Section 3.2, which outlines a process for determining and documenting all components that required corrosion control and establishing an inspection schedule. 12 Petition, at 5.#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 6CPF No: 1-2012-3001 Page 5 point in its initial Response and has failed to raise any new or additional information regarding the presence of stainless steel in its plant or how it relates to the failure to timely inspect its carbon steel piping exposed to the atmosphere.13 While stainless steel components may indeed be more resistant to atmospheric corrosion than carbon steel piping, that does not mean the former is totally exempt from atmospheric corrosion inspections under § 193.2635(d). An operator having stainless steel components under thermal insulation is still obliged to make an express determination under 49 C.F.R. § 193.2625(a) that certain metallic components are not subject to corrosion and which ones are. In addition, the fact that portions of the plant piping consists of stainless steel does not relieve Hopkinton from its obligation to inspect its other piping, either under Section 3.6C or § 193.2635(d). Third, Hopkinton contends that it should not suffer a civil penalty for failing to inspect all of its piping susceptible to atmospheric corrosion every three years. It asserts that the “nature, circumstances, and gravity” factors comprising the penalty assessment do not support a civil penalty. It points to the fact that the penalty appears to have been based on a period of time pre- dating the applicable five-year statute of limitations and that the evidence shows that Hopkinton did, in fact, conduct under-insulation inspections in 2007, 2008 and 2009. Therefore, Petitioner claims, the evidence does not support the “circumstances” component of the penalty.14 Further, Hopkinton argues that because it inspected approximately 20 percent of its carbon steel piping in 2007, 2008, and 2009, this somehow demonstrates that neither pipeline integrity nor safe operation were compromised and that therefore the gravity of any violation is diminished. Finally, it asserts that the “culpability” and “good faith” penalty factors did not support the proposed penalty because no violation occurred. I have reviewed the evidence supporting the penalty considerations and find that the assessment factors relating to “nature, circumstances and gravity” of the violation were reasonably applied. The integrity of this LNG facility, located in a High Consequence Area, was potentially compromised by Petitioner’s failure to follow its own procedures by inspecting all piping exposed to the atmosphere within the required three-year interval. However, I find that even though Hopkinton failed to follow its own procedures, it appears the company had a credible belief that its approach to monitoring and inspecting piping under insulation for atmospheric corrosion was faithful to its duty to meet its obligation to comply with its own procedures and 49 C.F.R. § 193.2635(d). Therefore, I have reduced the penalty from $32,100 to $19,688 in order to recognize the company’s good-faith efforts. Finally, I would note that Petitioner also argued that the Notice should be converted to a Notice of Amendment since that would entail a more appropriate remedy than a finding of violation and penalty. In arguing against the imposition of a civil penalty, Hopkinton points out that in the Compliance Order section of the Amended Order, PHMSA allows the company to perform inspections of a sampling of its piping under insulation, as opposed to inspecting all of it.15 13 Response, at 11-12. 14 Petition, at 8. 15 Id.#

120123001_Decision on Petition for Reconsideration_11242014_text.pdf, page 7CPF No: 1-2012-3001 Page 6 I find that the Compliance Order portion of the Amended Order is sound and appropriate, even though it allows a sampling of thermally insulated piping. The intent of this provision in the Compliance Order is to allow Hopkinton the flexibility of determining and documenting which metallic components could be adversely affected by atmospheric corrosion and to address such risks under 49 C.F.R. § 193.2625(a), but to require that all components the company decides do need protection from atmospheric corrosion must be inspected at intervals not exceeding three years, as required under 49 C.F.R. § 193.2635(d). The company, of course, may still decide that it wants to conduct additional inspections for certain types of piping and may provide for such inspections in its operations and maintenance manual. Conclusion Based on a review of the record and the information provided in the Petition, I hereby deny, in part, the Petition for Reconsideration and affirm the Amended Order’s finding of violation for Item 5 of the Notice. However, I also grant the Petition, in part, by reducing the amount of the penalty to $19,688, for the reasons set forth above. Payment of the $19,688 civil penalty assessed in the Amended Order is now due and must be made within 20 days of service of this Decision. The payment instructions were set forth in detail in the Amended Order. Failure to pay the $19,688 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 Attorney General for appropriate action in a United States District Court. This Decision on Petition for Reconsideration is the final administrative action in this proceeding. ________________________________ __________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#