NORTHWESTERN CORPORATION — Notice of Amendment

party submissionOfficial PDF120190001M_Operator Response to Notice_03062019.pdf#

120190001M_Closure Letter_03212019_text.pdf, page 1Official PDFOVERNIGHT EXPRESS DELIVERY March 21, 2019 Mr. Curtis Pohl Vice President Distribution Operations Northwestern Corporation 3010 W. 69th Street Sioux Falls, SD 57108 CPF 1-2019-0001M Dear Mr. Pohl: From August 21-23, 2018, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of Title 49 of the United States Code inspected the Northwestern Corporation’s (NWC) procedures and records for the operation of the Dry Creek Underground Natural Gas Storage Field (Dry Creek). The inspection was conducted at NWC’s office in Billings, Montana and the Dry Creek field located in a remote area south of Bridger and fifty-five (55) miles southwest of Billings, Montana. As a result of the inspection, NWC was issued a Notice of Amendment (NOA) on February 4, 2019. NWC responded on March 6, 2019, choosing not to contest the Notice. NWC submitted documentation showing it took certain actions to ensure compliance with the terms of the Notice. Based on our review of the documentation, it appears that the inadequacies outlined in this NOA have been corrected. This letter is to inform you no further action is necessary, and this case is now closed. Thank you for your cooperation. Sincerely, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration#

120190001M_Notice of Amendment_02042019_text.pdf, page 1Official PDFNOTICE OF AMENDMENT OVERNIGHT EXPRESS DELIVERY February 4, 2019 Mr. Curtis Pohl Vice President Distribution Operations Northwestern Corporation 3010 W. 69th Street Sioux Falls, SD 57108 CPF 1-2019-0001M Dear Mr. Pohl: From August 21-23, 2018, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected the Northwestern Corporation (NWC) procedures and records for the operation of the Dry Creek Underground Natural Gas Storage Field (Dry Creek). The inspection was conducted at NWC’s office in Billings, Montana and the Dry Creek field located in a remote area south of Bridger and 55 miles southwest of Billings, Montana. Based on the results of the inspection, PHMSA has identified the apparent inadequacy found within the NWC.’s Underground Natural Gas Storage (UNGS) procedures, as described below: 1. § 192.12 Underground natural gas storage facilities. (e) Operators of underground gas storage facilities must establish and follow written procedures for operations, maintenance, and emergencies implementing the requirements of API RP 1170 and API RP 1171, as required under this section, including the effective dates as applicable, and incorporate such procedures into their written procedures for operations, maintenance, and emergencies established pursuant to § 192.605. NWC’s procedures for operations, maintenance, and emergencies implementing the requirements of API RP 1170 and API RP 1171 were inadequate. Specifically, NWC did not establish a written Blowout Contingency Plan (BCP) as required in API RP 1171, Section 10.6.3, for the wells at Dry Creek.#

120190001M_Notice of Amendment_02042019_text.pdf, page 2CPF 1-2019-0001M API RP 1171, Section 10.6.3 Blowout Contingency Plan, states: The operator shall have a blowout contingency plan in place. A blowout contingency plan is company specific and should identify the procedures, equipment, and personnel needed to avoid or respond to a loss of well control situation. NOTE The operator can consult with well control experts in developing a blowout contingency plan. NWC discovered that after an insurance broker change, no formal BCP agreement was included with its new insurance policy. Thus, NWC did not have a BCP, as required by API RP 1171, Section 10.6.3, covering the wells in Dry Creek. Response to this Notice This Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190. 206. 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. Be advised that all material you submit in response to this enforcement action is subject to being 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, revised procedures, or a request for a hearing under §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 an Order Directing Amendment. If your plans or procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this Notice, we propose that you submit your amended procedures to my office within 60 days of receipt of this Notice. This period may be extended by written request for good cause. Once the inadequacies identified herein have been addressed in your amended procedures, this enforcement action will be closed. It is requested (not mandated) that Northwestern Corporation maintain documentation of the safety improvement costs associated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures) and submit the total to Robert Burrough, Director, PHMSA Eastern Region, 840 Bear Tavern Road, Suite 300, West Trenton, New Jersey 08628. Please refer to CPF 1-2019-0001M 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. 120190001M_Notice of Amendment_02042019_text Page 2 of 3#

120190001M_Notice of Amendment_02042019_text.pdf, page 3CPF 1-2019-0001M 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 Enclosure: Response Options for Pipeline Operators in Compliance Proceedings 120190001M_Notice of Amendment_02042019_text Page 3 of 3#