COLUMBIA MIDSTREAM GROUP, LLC — Notice of Probable Violation

120186001_NOPV PCP PCO_01052018_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER OVERNIGHT EXPRESS DELIVERY January 5, 2018 Mr. Stanley Chapman III President, US Gas Pipelines Columbia Midstream Group, LLC 700 Louisiana Street, Suite 700 Houston, TX 77002 CPF 1-2018-6001 Dear Mr. Chapman: From April 24 – 28, 2017, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected the procedures and records of Columbia Midstream Group, LLC, a subsidiary of TransCanada (TransCanada), at its pipeline facility located in Leetonia, Ohio. 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 (CFR). The items inspected and the probable violation(s) are: 1. § 195.402(a) Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted.#

120186001_NOPV PCP PCO_01052018_text.pdf, page 2CPF 1-2018-6001 TransCanada failed to follow its procedural manual for operations, maintenance and emergencies. Specifically, TransCanada failed to follow its abnormal operating conditions (AOC) procedure, pursuant to § 195.402(d)(5), by failing to document the required effectiveness review. Section 195.402(d)(5) states: “(d) Abnormal operation. The manual required by paragraph (a) of this section must include procedures for the following to provide safety when operating design limits have been exceeded; (5) Periodically reviewing the response of operator personnel to determine the effectiveness of the procedures controlling abnormal operation and taking corrective action where deficiencies are found.” During the inspection, the PHMSA inspector reviewed TransCanada’s (Procedure) “Abnormal Operations Plan for Liquid Pipelines”, dated 9/19/16, and prior versions dated 7/1/15 and 5/2014. The 2015 and 2016 Procedure versions, Section 5 stated, “Twice per calendar year, the Manager of Engineering Services – System Integrity (or designee) will review an Abnormal Operations report from the Company’s work management system to determine the Company’s effectiveness in controlling Abnormal Operations. Document the review in the Company’s work management system using Procedure 220.005.004 – Abnormal Operations Review. When deficiencies are found, corrective actions will be initiated.” Similarly, Section 3.1.7 of the 2014 version of the procedures stated, “Twice per calendar year, the Manager of Engineering Services (or designee) will review an Abnormal Operations report from the Company’s work management system to determine the Company’s effectiveness in controlling Abnormal Operations. Document this review in the Company’s work management system using Company Specification - Abnormal Operation Conditions Report. When deficiencies are found, take corrective action.” The PHMSA inspector requested AOC records and AOC effectiveness records for the 2014 – 2017 timeframe. TransCanada provided the following (4) records:  Columbia Midstream 2014 AOC 1  Columbia Midstream 2015 AOC 4  Columbia Midstream 2016 AOC 3  Columbia Midstream 2017 AOC 2 TransCanada failed to provide any record of AOC effectiveness review for 2014-2017. Additionally, the records TransCanada provided failed to include the following, but not limited to:  Documentation of AOC effectiveness review  Corrective actions taken  Signature or approval by supervisor  Date of AOC closure 120186001_NOPV PCP PCO_01052018_text Page 2 of 5#

120186001_NOPV PCP PCO_01052018_text.pdf, page 3CPF 1-2018-6001 The PHMSA inspector re-requested the AOC effectiveness records for the 2014-2017 timeframe. TransCanada stated, “The effectiveness review is conducted through root cause and discussion with the operations team, but this is not documented.” Therefore, TransCanada failed to follow its AOC procedure for periodically reviewing the response of operator personnel to determine the effectiveness of the procedure, per the requirements of § 195.402(d)(5). 2. § 195.403 Emergency Response Training. (c) Each operator shall require and verify that its supervisors maintain a thorough knowledge of that portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance. TransCanada failed to require and verify that its supervisors maintained a thorough knowledge of the portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance. During the inspection, the PHMSA inspector requested records of supervisor training for 2015 – 2016 regarding emergency response procedures. TransCanada was unable to provide any documentation, training record or response demonstrating that it verified that supervisors maintained a thorough knowledge of the portions of the emergency response procedures for which they are responsible to ensure compliance. The PHMSA inspector also reviewed TransCanada’s (Procedure), “Emergency Response Plan Manual Administration Plan”, dated 12/07/16 and “Liquid Pipeline Emergency Plan”, dated 02/16/17 (Procedures). The Procedures did not include details such as:  Defining Emergency Response supervisor role  Emergency response supervisor training requirements  Process for verification of supervisor knowledge The PHMSA inspector asked TransCanada where the applicable information is documented and TransCanada was not able to provide a response. Therefore, TransCanada failed to provide any data that showed it required and verified that supervisors maintained a thorough knowledge of that portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance. Proposed Civil Penalty 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. For violations occurring prior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 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 $20,700 as follows: 120186001_NOPV PCP PCO_01052018_text Page 3 of 5#

120186001_NOPV PCP PCO_01052018_text.pdf, page 4CPF 1-2018-6001 Item number PENALTY 1 $20,700 Proposed Compliance Order With respect to item number 2 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Columbia Midstream Group, LLC. 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). 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, Director, PHMSA Eastern Region, 820 Bear Tavern Road, Suite 103, West Trenton, NJ 08628. Please refer to CPF 1-2018- 6001 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. 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, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 120186001_NOPV PCP PCO_01052018_text Page 4 of 5#

120186001_NOPV PCP PCO_01052018_text.pdf, page 5CPF 1-2018-6001 PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Columbia Midstream Group, LLC (TransCanada) a Compliance Order incorporating the following remedial requirements to ensure the compliance of TransCanada with the pipeline safety regulations: 1. 2. In regard to Item Number 2 of the Notice pertaining to TransCanada’s failure to require and verify that its supervisors maintained a thorough knowledge of the portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance, TransCanada shall, within 60 days of issuance of the Final Order, revise its procedures to include guidance for requiring and verifying supervisor’s knowledge of emergency response procedures for which they are responsible. It is requested (not mandated) that TransCanada maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Robert Burrough, 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. 120186001_NOPV PCP PCO_01052018_text Page 5 of 5#

120186001_Closure Letter_07312018_text.pdf, page 1Official PDFOVERNIGHT EXPRESS DELIVERY July 31, 2018 Mr. Stanley Chapman III President, US Gas Pipelines Columbia Midstream Group, LLC 700 Louisiana Street, Suite 700 Houston, TX 77002 CPF 1-2018-6001 Dear Mr. Chapman: On June 15, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Columbia Midstream Group, LLC, a subsidiary of TransCanada (TransCanada) a Final Order in the above-referenced case. This Order included a Compliance Order requirement to take corrective actions on your pipeline. Based on our review of the documentation you provided, 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#

120186001_Final Order_06152018_text.pdf, page 1Official PDFJune 15, 2018 Mr. Stanley Chapman, III President, US Gas Pipelines Columbia Midstream Group, LLC 700 Louisiana Street, Suite 700 Houston, TX 77002 Re: CPF No. 1-2018-6001 Dear Mr. Chapman: Enclosed please find the Final Order issued in the above-referenced case. It makes two findings of violation and assesses a civil penalty of $20,700. This is to acknowledge receipt of payment of the full penalty amount, by wire transfer, dated February 21, 2018. When the terms of the compliance order have been completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Final Order by certified mail is effective upon the date of mailing, 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. Russell K. Girling, President & CEO, TransCanada Corporation, 450 – 1 St. SW, Calgary, Alberta, Canada T2P 5H1 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

120186001_Final Order_06152018_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 Midstream Group, LLC, ) CPF No. 1-2018-6001 a subsidiary of TransCanada Corporation, ) ) ) ) Respondent. ) _________________________________________ ) FINAL ORDER From April 24-28, 2017, 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 Midstream Group, LLC (Columbia or Respondent), a subsidiary of TransCanada Corporation (TransCanada) in Leetonia, Ohio. Columbia operates a hazardous liquid pipeline transporting natural gas liquids products and running approximately 36 miles from the Hickory Bend processing plant in Mahoning County, Ohio, to the UEO Buckeye Kensington Plant in Columbiana County, Ohio.1 As a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent, by letter dated January 5, 2018, 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. §§ 195.402(a) and 195.403(c) and proposed assessing a civil penalty of $20,700 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. Respondent failed to respond within 30 days of receipt of service of the Notice. Under 49 C.F.R. § 190.208(d), such failure to respond constitutes a waiver of Columbia’s right to contest the allegations in the Notice and authorizes the Associate Administrator, without further notice, to find facts as alleged in the Notice and to issue this Final Order under § 190.213. Despite such waiver, on February 23, 2018, the Eastern Region, OPS, reached out to Mr. Lee Romack, Manager of U.S. Regulatory Compliance for Respondent, to confirm the company’s receipt of the Notice. In a phone conversation, Mr. Romack confirmed that the Notice had been received, and stated that TransCanada had not intended to contest any of the contents of the Notice. Respondent paid the civil penalty of $20,700 by wire transfer dated February 21, 2018. 1 https://www.transcanada.com/en/operations/natural-gas/columbia-midstream/systems/ (last accessed Mar. 7, 2018).#

120186001_Final Order_06152018_text.pdf, page 3CPF No. 1-2018-6001 Page 2 FINDINGS OF VIOLATION Columbia did not contest the allegations in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states: § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. This manual shall be reviewed at intervals not exceeding 15 months, but at least once each calendar year, and appropriate changes made as necessary to insure that the manual is effective. This manual shall be prepared before initial operations of a pipeline system commence, and appropriate parts shall be kept at locations where operations and maintenance activities are conducted. The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow its own manual of written procedures for conducting normal operations, maintenance, and handling abnormal operations and emergencies. Specifically, the Notice alleged that Columbia failed to follow its abnormal operating conditions (AOC) procedure, pursuant to § 195.402(d)(5), by failing to document the required effectiveness review. During the inspection, Columbia failed to provide PHMSA with any record of an AOC effectiveness review for 2014-2017, despite the company’s procedures requiring an effectiveness review twice per calendar year. Columbia stated: “The effectiveness review is conducted through root cause and discussion with the operations team, but this is not documented.” 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. § 195.402(a) failing to follow its own manual of written procedures for conducting normal operations, maintenance and handling abnormal operations and emergencies. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.403(c), which states: § 195.403 Emergency response training. (a) . . . . (c) Each operator shall require and verify that its supervisors maintain a thorough knowledge of that portion of the emergency response procedures established under §195.402 for which they are responsible to ensure compliance. The Notice alleged that Respondent violated 49 C.F.R. § 195.403(c) by failing to require and verify that its supervisors maintained a thorough knowledge of the portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance. Specifically, the Notice alleged that during the inspection, the PHMSA inspector#

120186001_Final Order_06152018_text.pdf, page 4CPF No. 1-2018-6001 Page 3 requested records of supervisor training for 2015-2016 regarding emergency response procedures. Columbia was allegedly unable to provide any documentation, training record, or response demonstrating that it had verified that supervisors maintained a thorough knowledge of the portions of the emergency response procedures for which they were responsible to ensure compliance. The PHMSA inspector also reviewed Columbia’s Emergency Response Plan Manual Administration Plan, dated December 7, 2016, and Liquid Pipeline Emergency Plan, dated February 16, 2017. The Notice alleged that the procedures did not include details such as: (1) defining the emergency response supervisor’s role; (2) the emergency response supervisor’s training requirements; or (3) the process for verification of a supervisor’s knowledge. The PHMSA inspector asked Columbia where the applicable information was documented and Columbia was unable to provide a response. 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. § 195.403(c) by failing to require and verify that its supervisors maintained a thorough knowledge of the portion of the emergency response procedures established under § 195.402 for which they are responsible to ensure compliance. 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.2 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 $20,700 for the violation cited above in Item 1. Item 1: The Notice proposed a civil penalty of $20,700 for Respondent’s violation of 49 C.F.R. § 195.402(a), for failing to follow its manual of written procedures for operations, maintenance, and emergencies. Columbia neither contested the allegation nor presented any evidence or argument justifying elimination of the proposed penalty. Accordingly, having reviewed the record and considered the assessment criteria for violation of 49 C.F.R. § 195.402(a), I assess Respondent a total civil penalty of $20,700, which has already been paid in full by wire transfer dated February 21, 2018. 2 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).#

120186001_Final Order_06152018_text.pdf, page 5CPF No. 1-2018-6001 Page 4 COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 2 in the Notice, for the violation of 49 C.F.R. § 195.403(c). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids 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 § 195.403(c) (Item 2), Respondent must, within 60 days of issuance of this Final Order, revise its procedures to include guidance for requiring and verifying supervisors’ knowledge of emergency response procedures for which they are responsible. 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. It is requested (not mandated) that Respondent maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. 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. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), 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. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. June 15, 2018 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#