COLUMBIA GAS TRANSMISSION, LLC — Notice of Probable Violation

party submissionOfficial PDF120151008_Operator Response to Notice_05262015.pdf#

120151008_Final Order_02052016_text.pdf, page 1Official PDFFebruary 05, 2016 Mr. Robert C. Skaggs, Jr., CEO Columbia Gas Transmission, LLC Columbia Pipeline Group 5151 San Felipe, Suite 2500 Houston, Texas 77056 Re: CPF No. 1-2015-1008 Dear Mr. Skaggs: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, Columbia Gas Transmission, LLC. It makes findings of violation and assesses a civil penalty of $61,900. It further finds that Columbia Gas Transmission, LLC has completed the actions specified in the Notice to comply with the pipeline safety regulations. When the civil penalty has been paid, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Byron Coy, P.E., Director, Eastern Region, PHMSA OPS Mr. Perry Hoffman, Manager - System Integrity, Columbia Gas Transmission, LLC 1700 MacCorkle Ave., SE, Charleston, West Virginia 25314 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120151008_Final Order_02052016_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 ) Columbia Gas Transmission, LLC, ) a subsidiary of Columbia Pipeline Group, ) CPF No. 1-2015-1008 ) ) ) Respondent. ) __________________________________________) FINAL ORDER On multiple occasions between June 24, 2014, and August 8, 2014, 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 and records of Columbia Gas Transmission, LLC (Columbia or Respondent), at its Millennium Pipeline facilities in Sparrow Bush, New York. Columbia transports natural gas through nearly 12,000 miles of pipelines in the northeastern United States.1 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated April 27, 2015, 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 Columbia had violated 49 C.F.R. §§ 192.455 and 192.605 and proposed assessing a civil penalty of $61,900 for one of the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. Columbia responded to the Notice by letter dated May 26, 2015 (Response).2 The company did not contest the allegations of violation but provided information concerning the corrective actions it had taken. Columbia also provided a second response by letter dated August 24, 2015 (Response 2) where it updated the Region on the actions it had taken in response to the Notice. Respondent did not request a hearing and therefore has waived its right to one. 1 See https://www.cpg.com/about-us. At the time this case arose, Columbia Gas Transmission, LLC, was part of Columbia Pipeline Group, a subsidiary of NiSource, Inc. In July 2015, NiSource separated Columbia Pipeline Group into a stand-alone publicly traded company. See https://www.nisource.com/about-us/creating-two-energy- infrastructure-companies (last accessed October 16, 2015). 2 By letter dated August 24, 2015, Columbia provided PHMSA with additional information on actions it had taken in response to the Notice.#

120151008_Final Order_02052016_text.pdf, page 3CPF No. 1-2015-1008 Page 2 FINDINGS OF VIOLATION In its Response, Columbia did not contest the allegations in the Notice that it violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.455(a), which states, in relevant part: § 192.455 External corrosion control: Buried or submerged pipelines installed after July 31, 1971. (a) Except as provided in paragraphs (b), (c), and (f) of this section, each buried or submerged pipeline installed after July 31, 1971, must be protected against external corrosion, including the following: (1) . . . (2) It must have a cathodic protection system designed to protect the pipeline in accordance with this subpart, installed and placed in operation within 1 year after completion of construction. The Notice alleged that Respondent violated 49 C.F.R. § 192.455(a) by failing to establish a cathodic protection system designed to protect a new buried pipeline within one year after the pipeline is placed into operation. Specifically, the Notice alleged that approximately 1,500 feet of large-diameter piping was newly installed for the Minisink compressor station on Respondent’s Millennium Pipeline in Orange County, New York. The station was placed into operation on June 1, 2013, and during inspections on June 24-25, 2014, inspectors found inadequate cathodic protection for the new pipeline. When asked how they provided cathodic protection for the new pipeline, Columbia’s operations manager indicated that the company had bonded the new piping to existing cathodic protection systems but planned to eventually provide separate cathodic protection at the station. 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. § 192.455(a) by failing to establish a cathodic protection system designed to protect a new buried pipeline system within one year of the pipeline being placed into operation. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2), which states: § 192.605 Procedural manual for operations, maintenance, and emergencies. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (1) … (2) Controlling corrosion in accordance with the operations and maintenance requirements of subpart I of this part. The Notice alleged that Respondent violated 49 C.F.R. § 192.605(b)(2) by failing to prepare and#

120151008_Final Order_02052016_text.pdf, page 4CPF No. 1-2015-1008 Page 3 follow for each pipeline a manual of written procedures for conducting operations and maintenance activities and for emergency response. This includes procedures for controlling corrosion in accordance with the requirements of subpart I of 49 C.F.R. Part 192. Specifically, the Notice alleged that Columbia’s Procedure 70.01.0, External Corrosion Control, Section 3.2.1, failed to require adequate external corrosion control for all buried or submerged pipe installed after July 31, 1971, in accordance with 49 C.F.R. § 192.455(a)(2), which is part of subpart I of 49 C.F.R. Part 192. Instead, Columbia’s procedure only required external corrosion control for pipe “installed as a replacement section for a pipeline,” not for newly-installed pipe. 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. § 192.605(b)(2) by failing to prepare and follow for each pipeline a manual of written procedures for external corrosion control that met the requirements of subpart I of 49 C.F.R. Part 192. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 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; 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 civil penalty of $61,900 for one of the violations cited above. Item 1: The Notice proposed a civil penalty of $61,900 for Respondent’s violation of 49 C.F.R. § 192.455(a), for failing to establish a cathodic protection system designed to protect a new buried pipeline within one year after the pipeline is placed into operation. Columbia neither contested the allegation nor presented any evidence or argument justifying a reduction in the proposed penalty. Considering the importance of adequate cathodic protection and the fact that this is a repeat offense,3 I find that the penalty amount is justified. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $61,900 for violation of 49 C.F.R. § 192.455(a). In summary, having reviewed the record and considered the assessment criteria for each of Item cited above, I assess Respondent a total civil penalty of $61,900. 3 In the Matter of NiSource Gas Transmissions and Storage Company, CPF 1-2012-1014 (Dec. 21, 2012), Item 2.#

120151008_Final Order_02052016_text.pdf, page 5CPF No. 1-2015-1008 Page 4 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 (AMK-325), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $61,900 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 and 2 in the Notice for violations of 49 C.F.R. §§ 192.455, 192.605, respectively. 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. The Director has indicated that Respondent has taken the following actions to address some of the cited violations: Columbia included cathodic protection test station readings and a map of test station locations in Attachments A and B of its response, related to Notice Item 1 and Proposed Compliance Order Item 1. PHMSA Eastern Region has reviewed the August 24, 2015 response and the additional cathodic protection actions Columbia has taken, and it appears the additional cathodic protection actions taken satisfied the requirements of Proposed Compliance Order Item 1. Columbia included revised operations and maintenance (O&M) procedures in Attachment A of its Response related to Notice Item 2 and Proposed Compliance Order Item 2. PHMSA Eastern Region has reviewed those revised procedures, and it appears the revised procedures satisfy the requirements of Proposed Compliance Order Item 2. Accordingly, I find that compliance has been achieved with respect to these violations. Therefore, the compliance terms proposed in the Notice for Item 1 and Item 2 are not included in this Order. It is requested (not mandated) that Columbia maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Mr. Byron Coy, PE, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration.#

120151008_Final Order_02052016_text.pdf, page 6CPF No. 1-2015-1008 Page 5 It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 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#

120151008_NOPV PCP PCO_04272015_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 NOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS DELIVERY April 27, 2015 Ken Oostman, VP Engineering Columbia Gas Transmission, LLC. 5151 San Felipe, No. 2500 Houston, TX, 77056 CPF 1-2015-1008 Dear Mr. Oostman: Between June 24 and August 8, 2014, representatives of the New York State Department of Public Service (NYDPS), acting as agents for the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code, inspected Columbia Gas Transmission, LLC (CGT), Millennium pipeline facilities, in Sparrow Bush, New York. As a result of the inspection, it appears that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: 1. §192.455 External corrosion control: Buried or submerged pipelines installed after July 31, 1971. (a) Except as provided in paragraphs (b), (c), and (f) of this section, each buried or submerged pipeline installed after July 31, 1971, must be protected against external corrosion, including the following: (2) It must have a cathodic protection system designed to protect the pipeline in accordance with this subpart, installed and placed in operation within 1 year after completion of construction. CGT failed to establish a cathodic protection system designed to protect a new buried pipeline within one year after the pipeline had been placed into operation. 1. During the first half of 2013, approximately 1,500 feet of large diameter (combination of 36-inch, 30-inch, and 24-inch) piping was newly installed for the Millennium Pipeline Company (Millennium) Minisink compressor station in Westtown, Orange County, NY.#

120151008_NOPV PCP PCO_04272015_text.pdf, page 21-2015-1008 2. 3. 4. The compressor station was placed into operation by CGT on June 1, 2013. During the inspection on 6/24/2014, NYSDPS requested that CGT take cathodic protection (CP) pipe-to-soil potential readings at the Minisink compressor station piping. CGT took the CP readings after the NYSDPS inspection, with no NYSDPS inspector present. Of the three readings taken at the compressor station, NYSDPS noted one less than adequate pipe-to-soil potential reading of -0.750 volts. On 6/25/2014, CGT found four additional pipe-to-soil potential readings below the -0.85 Volt cathodic protection criteria. CGT did not provide any evidence that cathodic protection was being deemed adequate by any other criteria. NYSDPS asked CGT how they provided cathodic protection to the new piping. CGT indicated that they bonded the new station piping to the existing cathodic protection system on the Millennium mainline, and installed bonds across insulating joints on the inlet and outlet piping to the compressor station. The Operations Manager for CGT, stated that CGT intends to install a separate cathodic protection system at the station, but it has not yet been installed. Thus, CGT failed to establish a cathodic protection system designed to protect a new buried pipeline within one year after the pipeline had been placed into operation. This probable violation is a repeat violation of CPF 1-2012-2014 Item 2. 2. §192.605 Procedural manual for operations, maintenance, and emergencies. (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (2) Controlling corrosion in accordance with the operations and maintenance requirements of subpart I of this part. CGT Procedure 70.01.01 “External Corrosion Control” is inadequate in that it does not address all of the requirements of §192.455(a)(2) which states in part that “…each buried or submerged pipeline installed after July 31, 1971, must be protected against external corrosion…” CGT’s procedure (Section 3.2.1) refers only to pipe “installed as a replacement section for a pipeline” and does not refer to newly installed pipe. In an e-mail from CGT to the NYSDPS dated August 8, 2014, CGT indicated that they are in the process of revising the language of their O&M Plan 70.01.01 “to ensure it is clear that all buried or submerged metallic piping installed (or replaced) after July 31, 1971 must have a cathodic protection system designed to protect the pipeline installed (or replaced) which is placed in operation within 1 year after the completion of construction.” Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000 per violation per day the violation persists up to a maximum of $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $61,900 as follows: Item number PENALTY 1 $61,900 120151008_NOPV_PCP_PCO_04272015 2 of 4#

120151008_NOPV PCP PCO_04272015_text.pdf, page 31-2015-1008 Proposed Compliance Order With respect to items 1 and 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to CGT. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. Please submit all correspondence in this matter to Byron Coy, PE, Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, W. Trenton, NJ 08628. Please refer to CPF 1-2015-1008 on each document you submit and please, whenever possible, provide a signed PDF copy in electronic format. Smaller files may be emailed to Byron.Coy@dot.gov. Larger files should be sent on a CD accompanied by the original paper copy to the Eastern Region Office. Additionally, if you choose to respond to this (or any other case), please ensure that any response letter pertains solely to one CPF case number. Sincerely, Byron Coy, PE Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Cc: Mr. Kevin Speicher, NYSDPS Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120151008_NOPV_PCP_PCO_04272015 3 of 4#

120151008_NOPV PCP PCO_04272015_text.pdf, page 41-2015-1008 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Columbia Gas Transmission, LLC (CGT) a Compliance Order incorporating the following remedial requirements to ensure the compliance of CGT with the pipeline safety regulations: 1. 2. 3. 4. In regard to Item Number 1 of the Notice pertaining to CGT’s failure to establish a cathodic protection system for the Minisink Compressor Station and associated piping designed to protect a new buried pipeline within one year after the pipeline was placed into operation on June 1, 2013, CGT must evaluate, and then ensure that adequate cathodic protection is provided for the entirety of the Minisink Compressor Station, and all of its inlet and outlet piping for a distance of 5 miles from the station fence lines. In regard to Item Number 2 of the Notice pertaining to CGT’s Procedure 70.01.01 that does not address all the requirements of §192.455(a)(2), CGT must revise the language of their operations and maintenance (O&M) procedures to address that all buried or submerged metallic piping installed, or replaced, after July 31, 1971 must have a cathodic protection system designed to protect the pipeline installed, or replaced, and in operation, within 1 year after the completion of construction. CGT will have 90 days after receipt of the Final Order to perform a cathodic protection evaluation on the subject station and inlet/outlet piping; then another 150 days to install or modify cathodic protection as needed, to achieve adequate cathodic protection. It is requested (not mandated) that CGT maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Byron Coy, PE, Director, Eastern Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 120151008_NOPV_PCP_PCO_04272015 4 of 4#