ALGONQUIN GAS TRANSMISSION, L.L.C. (SPECTRA ENERGY PARTNERS, LP) — Notice of Probable Violation

party submissionOfficial PDF120171010_Operator Response to Notice_08102017.pdf#

120171010_Region Closure Confirmation letter_12042018_text.pdf, page 1Official PDFOVERNIGHT EXPRESS DELIVERY December 4, 2018 Mr. Al Monaco President and Chief Executive Officer Enbridge, Inc. 5400 Westheimer Court Houston, TX 77056 CPF 1-2017-1010 Dear Mr. Monaco: On September 7, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Algonquin Gas Transmission Company, LLC a Final Order in the above-referenced case. This Order included a Civil Penalty assessment. Based on 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, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration#

120171010_NOPV PCP PCO_06282017_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS DELIVERY June 28, 2017 J. Andrew Drake, Vice President, Operations & EHS Algonquin Gas Transmission Company 5400 Westheimer Court Houston, TX 77056 CPF 1-2017-1010 Dear Mr. Drake, From December 8–14, 2016, representatives of the New York State Department of Public Service (NYSDPS), acting as agents for the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Algonquin Gas Transmission Company’s (AGT) Algonquin Incremental Market (AIM) project in Brewster, New York. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s) are: 1. §192.167 Compressor stations: Emergency shutdown. (a) Except for unattended field compressor stations of 1,000 horsepower (746 kilowatts) or less, each compressor station must have an emergency shutdown system that meets the following: (4) It must be operable from at least two locations, each of which is: …#

120171010_NOPV PCP PCO_06282017_text.pdf, page 2CPF 1-2017-1010 (ii) Near the exit gates, if the station is fenced, or near emergency exits, if not fenced; and, … AGT failed to have an emergency shutdown system that was near the exit gates, if the station is fenced, or near emergency exits, if not fenced. Specifically, AGT failed to install activation for its emergency shutdown system at exit gates in the fenced Southeast Compressor station. The AIM project was installed from October 2015 through December 2016. The AIM project consisted of the installation of approximately 20.1 miles of 42-inch pipeline in New York State, and modification of AGT’s existing compressor station in Brewster, NY (Southeast Compressor Station). The Southeast Compressor Station modification consisted of the installation of a new 10,000 horsepower compressor and building to house the compressor. During the final walkthrough on December 8, 2016, the NYSDPS inspector noted that the Southeast Compressor station did not have activation for its emergency shut down system at the fenced facility’s exit gates. The Southeast Compressor station had eight exit gates: four exit gates for personnel and four exit gates for vehicles. The station had an emergency shutdown system with activation points within the facility. Activation points for the emergency shutdown system were not present near exit gates. AGT stated that there are no activation points for the emergency shutdown system at station exit gates. Proposed Civil Penalty As of April 27, 2017, under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $36,200 as follows: Item number PENALTY 1 $36,200 Proposed Compliance Order With respect to item(s) 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Algonquin Gas Transmission Company. 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 120171010_NOPV PCP PCO_06282017_textPage 2 of 4#

120171010_NOPV PCP PCO_06282017_text.pdf, page 3CPF 1-2017-1010 explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). Following the receipt of this Notice, you have 30 days to submit written comments, or request a hearing under 49 CFR § 190.211. 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. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. This period may be extended by written request for good cause. Please submit all correspondence in this matter to Robert Burrough, Acting Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, West Trenton, NJ 08628. Please refer to CPF 1- 2017-1010 on each document you submit, and whenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed to robert.burrough@dot.gov. Larger files should be sent on a CD accompanied by the original paper copy to the Eastern Region Office. Sincerely, Robert Burrough Acting Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Cc: Kevin Speicher, NYS DPS Enclosure: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120171010_NOPV PCP PCO_06282017_textPage 3 of 4#

120171010_NOPV PCP PCO_06282017_text.pdf, page 4CPF 1-2017-1010 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Algonquin Gas Transmission Company a Compliance Order incorporating the following remedial requirements to ensure the compliance of Algonquin Gas Transmission Company with the pipeline safety regulations: 1. 2. In regard to Item Number 1 of the Notice, AGT shall install emergency shutdown system activation points near the exit gates of the Southeast Compressor station, in accordance with the requirements of §192.167(a)(4), within 120 days of receipt of the Final Order. It is requested (not mandated) that Algonquin Gas Transmission Company maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Robert Burrough, Acting 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. 120171010_NOPV PCP PCO_06282017_textPage 4 of 4#

120171010_Final Order_09072018_text.pdf, page 1Official PDFSeptember 7, 2018 Mr. Al Monaco President and Chief Executive Officer Enbridge, Inc. 5400 Westheimer Court Houston, TX 77056 Re: CPF No. 1-2017-1010 Dear Mr. Monaco: Enclosed please find the Final Order issued in the above-referenced case to your subsidiary, Algonquin Gas Transmission Company, LLC (Algonquin). It makes a finding of violation and assesses a civil penalty of $36,200. It further finds that Algonquin has completed the actions specified in the Notice to comply with the pipeline safety regulations. When the civil penalty has been paid, this enforcement action will be closed. Service of the Final Order by certified mail is effective, as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Mr. Robert Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA Mr. Rick Kivela, Manager, Operational Compliance, Enbridge, Inc. CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120171010_Final Order_09072018_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 ) Algonquin Gas Transmission Company, LLC, ) CPF No. 1-2017-1010 a subsidiary of Enbridge, Inc., ) ) ) ) Respondent. ) __________________________________________) FINAL ORDER From December 8-14, 2016, pursuant to 49 U.S.C. § 60117, representatives of the New York State Department of Public Service (NYSDPS), as agent for 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 Algonquin Gas Transmission Company, LLC’s (AGT or Respondent) Algonquin Incremental Market (AIM) project in Brewster, New York. AGT is owned and operated by Enbridge, Inc.1 AGT operates approximately 1,129 miles of pipeline in New England, with a capacity of approximately 3.08 billion cubic feet per day.2 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated June 28, 2017, 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 AGT had violated 49 C.F.R. § 192.167, and proposed assessing a civil penalty of $36,200 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. Enbridge, on behalf of AGT, responded to the Notice by letter dated August 10, 2017 (Response). The company did not contest the allegation, but offered additional information in response to the Notice and requested that the proposed civil penalty be eliminated. Respondent did not request a hearing and therefore has waived its right to one. 1 Spectra Energy Partners, LP website, available at http://www.spectraenergypartners.com/operations/natural-gas- pipelines/algonquin-gas-transmission (last accessed August 7, 2018); Enbridge, Inc. website, available at http://www.enbridge.com/media-center/news/details?id=2126823&lang=en&year=2017 (last accessed August 7, 2018). 2 Spectra Energy Partners, LP website, available at http://www.spectraenergypartners.com/operations/natural-gas- pipelines/algonquin-gas-transmission (last accessed August 7, 2018).#

120171010_Final Order_09072018_text.pdf, page 3CPF No. 1-2017-1010 Page 2 FINDING OF VIOLATION Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.167(a)(4)(ii), which states in relevant part: § 192.167 Compressor stations: Emergency shutdown. (a) Except for unattended field compressor stations of 1,000 horsepower (746 kilowatts) or less, each compressor station must have an emergency shutdown system that meets the following: (1) . . . . (4) It must be operable from at least two locations, each of which is: (i) . . . . (ii) Near the exit gates, if the station is fenced, or near emergency exits, if not fenced; . . . The Notice alleged that Respondent violated 49 C.F.R. § 192.167(a)(4)(ii) by failing to have an emergency shutdown (ESD) system operable from at least two locations, each of which is near the exit gates of a fenced compressor station. Specifically, the Notice alleged that AGT’s fenced Southeast Compressor Station had an ESD with activations points within the facility, but not near the exit gates. The Notice stated that AGT’s AIM project was installed from October 2015 through December 2016 and consisted of approximately 20.1 miles of 42-inch pipeline in New York and modification of AGT’s existing Southeast Compressor Station (Station) in Brewster, New York. AGT installed a new 10,000-horsepower compressor and building to house the compressor at the Station, which had eight exit gates - four for personnel and four for vehicles. During the final walkthrough on December 8, 2016, the NYSDPS inspector noted that the Station did not have activation for its ESD system at the fenced facility’s exit gates. In its Response, Enbridge stated that “AGT is not contesting the finding of non-compliance,” yet argued that a “finding of violation is not warranted” because there were 16 ESD activation points at the Station, including 4 located approximately 60 to 135 feet from an exit gate. Respondent also asserted “the number and locations of the ESD activation points at the time of the inspection did not negatively impact safety.”3 AGT argued that § 192.167 does not specify the maximum distance between an ESD activation point and a fence exit gate.4 While this is correct, the term “near” is commonly defined as “a short distance” or “close to.”5 As stated in a previous PHMSA final order, “[t]his requirement is intended to ensure that onsite personnel can activate the ESD System from a safe distance before 3 Response, at 2-3. 4 Id. 5 Merriam-Webster.com. Merriam-Webster, n.d. Web. 13 Mar. 2018.#

120171010_Final Order_09072018_text.pdf, page 4CPF No. 1-2017-1010 Page 3 leaving a compressor station in an emergency.”6 At the time of the NYSDPS inspection, the nearest ESD activation point to an exit gate at the Station was 60 feet, which is not “a short distance.” Even though the 16 ESD activation points were located near planned evacuation routes, their distances from the exit gates would not necessarily prevent an employee from having to “head back toward a hazardous area to activate the switches in the event of an emergency.”7 Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.167(a)(4)(ii) by failing to have an emergency shutdown system operable from at least two locations, each of which is near the exit gates of the fenced compressor station. This finding of violation will be considered a prior offense 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.8 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 total civil penalty of $36,200 for the violation cited above. Item 1: The Notice proposed a civil penalty of $36,200 for Respondent’s violation of 49 C.F.R. § 192.167(a)(4)(ii), for failing to have an emergency shutdown system operable from at least two locations, each of which is near the exit gates of the fenced compressor station. With respect to gravity, the Violation Report noted that the “[f]ailure to have an emergency shutdown system near exit gates is a safety concern to all personnel entering the station.”9 AGT argued the 6 See, In the Matter of MoGas Pipeline, LLC, Final Order, C.P.F. No. 3-2011-1009 (Feb. 22, 2012) (available at www.phmsa.dot.gov/pipeline/enforcement/enforcement-overview). 7 Id., at 3. AGT acknowledged that § 192.167(a)(4)(i) requires at least ESD points to be operable outside “the gas area of the station” and that an ESD activation point located outside a compressor building is not necessarily outside “the gas area” that could ignite; however, that requirement is separate from the requirement of § 192.167(a)(4)(ii) at issue here. 8 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017). 9 Pipeline Safety Violation Report (Violation Report) (March 9, 2017) (on file with PHMSA), at 11.#

120171010_Final Order_09072018_text.pdf, page 5CPF No. 1-2017-1010 Page 4 proposed penalty was not warranted because the safety of the Southeast Compressor Station was not compromised.10 AGT pointed out that there were 16 ESD activation points within the Station located near planned emergency evacuation routes.11 However, I find Respondent failed to comply with a requirement that was clearly applicable and this failure impacted safety. As stated above, the nearest ESD activation point to an exit gate at the Station was 60 feet, which did not ensure that onsite personnel could activate the ESD System from a safe distance before leaving the compressor station in an emergency. The proposed penalty already takes into consideration this information, and therefore, no further reduction to the penalty is warranted under this factor. The nature and circumstances of the violation were such that important equipment was missing for a significant amount of time.12 With respect to the degree of Respondent’s culpability, the Violation Report noted that the Southeast Compressor Station was originally constructed in 1986 and did not have ESD activation points near exit gates before the 2015 modifications. Even then, AGT did not install ESD activation points near the exit gates as part of the 2015 AIM project. Therefore, I find the nature and circumstances of the violation support the proposed penalty amount. I also find Respondent is culpable for the violation because it failed to install ESD activation points at the time of construction and during modifications to the station. With respect to the good faith of Respondent in attempting to comply with the pipeline safety regulations, the Violation Report stated that AGT did not install the ESD activation points during the original construction and AGT continued to operate the station without installing ESD activation points at the exit gates.13 AGT noted that it has installed one new ESD activation point and two new man gates. The new ESD activation point is approximately 11 feet from one of the new man gates, and there is an ESD activation point approximately 19 feet from the other new man gate. Even though Respondent has now taken steps to comply with the requirement, it did so only after learning of the probable violation. Respondent did not make a clear effort to comply with the cited regulation when the violation occurred. Steps taken after PHMSA, or a State agent, discovers a violation does not generally warrant a penalty reduction for good faith. Therefore, I find AGT did not have a reasonable justification for its non-compliance and a penalty reduction is not warranted. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $36,200 for violation of 49 C.F.R. § 192.167(a)(4)(ii). 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 10 Response, at 2. 11 Id. 12 Violation Report, at 9-10. 13 Id., at 13.#

120171010_Final Order_09072018_text.pdf, page 6CPF No. 1-2017-1010 Page 5 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, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845. Failure to pay the $36,200 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 Item 1 in the Notice for violation of 49 C.F.R. § 192.167(a)(4)(ii). 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 indicates that Respondent has taken the following actions specified in the proposed compliance order: 1. With respect to the violation of § 192.167(a)(4)(ii) (Item 1), Respondent has installed emergency shutdown system activation points near the exit gates of the Southeast Compressor Station, in accordance with § 192.167(a)(4)(ii). Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice are not included in this Order. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the 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, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. September 7, 2018 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#