{"operation":"document","citation":"CPF 120190014M","title":"CONSUMERS ENERGY CO — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-11-07","effective_on":null,"summary":"CLOSED notice of amendment citing 192.12(e).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120190014m.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120190014m.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120190014m","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120190014M","body":"Notice of Amendment involving CONSUMERS ENERGY CO. PHMSA's enforcement data identifies the cited regulation as 192.12(e). The case was opened on 2019-11-07 and is reported as closed as of 2020-08-13. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120190014M_Closure Letter_08132020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120190014M/120190014M_Closure%20Letter_08132020.pdf\n\n120190014M_Closure Letter_08132020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120190014M/120190014M_Closure%20Letter_08132020_text.pdf\n\n120190014M_Notice of Amendment_11072019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120190014M/120190014M_Notice%20of%20Amendment_11072019.pdf\n\n120190014M_Notice of Amendment_11072019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120190014M/120190014M_Notice%20of%20Amendment_11072019_text.pdf\n\n120190014M_Operator Respone to Notice_12062019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120190014M/120190014M_Operator%20Respone%20to%20Notice_12062019.pdf\n\n120190014M_Closure Letter_08132020_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nAugust 13, 2020\nMr. Gregory Salisbury\nVice President, Gas Engineering and Supply\nConsumers Energy Co.\n1945 W. Parnall Road\nJackson, MI 49201\nCPF 1-2019-0014M\nDear Mr. Salisbury:\nFrom May 7-9, 2019, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected\nConsumers Energy Co.’s (Consumers) procedures for Underground Natural Gas Storage in\nJackson, Michigan. As a result of the inspection, Consumers was issued a Notice of Amendment\non November 7, 2019, which proposed amendment of your procedures.\nConsumers submitted its amended procedures on December 6, 2019, January 22,, 2020, March 31,\n2020, with the final amendment provided on July 6th, 2020. My staff reviewed the amended\nprocedures, and it appears that the inadequacies outlined in this Notice of Amendment have been\ncorrected.\nThis letter is to inform you no further action is necessary and this case is now closed. Thank you\nfor your cooperation.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120190014M_Notice of Amendment_11072019_text.pdf\n\nNOTICE OF AMENDMENT\nOVERNIGHT EXPRESS DELIVERY\nNovember 7, 2019\nMs. Mary Polkovich\nVP Energy Delivery\nConsumers Energy Co.\n1945 W. Parnall Road\nJackson, MI 49201\nCPF 1-2019-0014M\nDear Ms. Polkovich:\nFrom May 7-9, 2019, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected\nConsumers Energy Co’s (Consumers) procedures for Underground Natural Gas Storage in\nJackson, Michigan.\nOn the basis of the inspection, PHMSA has identified the apparent inadequacies found within\nConsumers’ plans or procedures, as described below:\n1. § 192.12 Underground natural gas storage facilities.\n(a) ….\n(e) Operators of underground gas storage facilities must establish and follow\nwritten procedures for operations, maintenance, and emergencies implementing the\nrequirements of API RP 1170 and API RP 1171, as required under this section,\nincluding the effective dates as applicable, and incorporate such procedures into their\nwritten procedures for operations, maintenance, and emergencies established\npursuant to § 192.605.\n\n\n\nCPF 1-2019-0014M\nConsumers’ written procedures for implementing the requirements of API RP 1171 were\ninadequate. Specifically, Consumers’ Storage Integrity Management Program (SIMP), Section\n2.1.8 did not include assessing plugged and abandoned third party wells in accordance with API\nRP 1171, Section 8.3.2 Data Sources (Section 8.3.2).\nSection 8.3.2 states in part:\nThe operator shall use available information such as performance data collected through\nthe field history, operations and maintenance (O&M) activities, geotechnical data such as\nwell logs, engineering data, and completion reports to determine susceptibility to threat\nand hazard-related events and to assess threat and hazard interaction.\nAt the time of the inspection, Consumers’ SIMP failed to address plugged and abandoned third-\nparty wells.\n2. § 192.12 Underground natural gas storage facilities.\n(a) ….\n(e) Operators of underground gas storage facilities must establish and follow\nwritten procedures for operations, maintenance, and emergencies implementing the\nrequirements of API RP 1170 and API RP 1171, as required under this section,\nincluding the effective dates as applicable, and incorporate such procedures into\ntheir written procedures for operations, maintenance, and emergencies established\npursuant to § 192.605.\nConsumers’ written procedures for implementing the requirements of API RP 1171 were\ninadequate. Specifically, Consumers did not assess threat and hazard interaction in their SIMP or\nin their Risk Model, as required by API RP 1171, Section 8.3.2.\nSection 8.3.2 states in part:\nThe operator shall use available information such as performance data collected through\nthe field history, operations and maintenance (O&M) activities, geotechnical data such as\nwell logs, engineering data, and completion reports to determine susceptibility to threat\nand hazard-related events and to assess threat and hazard interaction.\nAt the time of the inspection, Consumers’ procedures failed to address the threat and hazard\ninteraction requirement of API RP 1171, Section 8.3.2.\n3. § 192.12 Underground natural gas storage facilities.\n(a) ….\n(e) Operators of underground gas storage facilities must establish and follow\nwritten procedures for operations, maintenance, and emergencies implementing the\nrequirements of API RP 1170 and API RP 1171, as required under this section,\nincluding the effective dates as applicable, and incorporate such procedures into their\nwritten procedures for operations, maintenance, and emergencies established\npursuant to § 192.605.\n120190014M_Notice of Amendment_11072019_text Page 2 of 4\n\n\n\nCPF 1-2019-0014M\n4. Consumers’ written procedures for implementing the requirements of API RP 1171 were\ninadequate. Specifically, Consumers failed to establish procedures for monitoring all annular gas\nby measuring and recording annular pressure and/or annular gas flow, or procedures for addressing\nintegrity where the well annulus cannot be monitored, in accordance with API RP 1171, Section\n9.3.2 Well Integrity Monitoring (Section 9.3.2).\nSection 9.3.2 states in part:\nThe operator shall monitor for presence of annular gas by measuring and recording\nannular pressure and/or annular gas flow. The operator shall evaluate each annular gas\noccurrence that exceeds operator- or regulatory-defined threshold levels determined from\nwell integrity evaluation and from risk assessment.\nAt the time of the inspection, Consumers procedures failed to address the requirement of API RP\n1171, Section 9.3.2, including monitoring all annular gas and evaluating each annular gas\noccurrence that exceeds operator defined thresholds.\n§ 192.12 Underground natural gas storage facilities.\n(a) ….\n(e) Operators of underground gas storage facilities must establish and follow\nwritten procedures for operations, maintenance, and emergencies implementing the\nrequirements of API RP 1170 and API RP 1171, as required under this section,\nincluding the effective dates as applicable, and incorporate such procedures into their\nwritten procedures for operations, maintenance, and emergencies established\npursuant to § 192.605.\nConsumers’ written procedures for implementing the requirements of API RP 1171 were\ninadequate. Specifically, Consumers did not address equipment failures in their emergency plan,\nas required by API RP 1171, Section 10.6.1 Emergency Preparedness/Emergency Response Plan\n(Section 10.6.1).\nSection 10.6.1 states in part (emphasis added):\nFor site security and safety, the operator shall develop and implement a structured\nemergency preparedness/response plan in order to address accidental releases,\nequipment failures, natural disasters, and third-party emergencies.\nAt the time of the inspection, Consumers’ emergency procedures failed to address equipment\nfailures in accordance with API RP 1171, Section 10.6.1.\nResponse to this Notice\nThis Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as\npart of this Notice is a document entitled Response Options for Pipeline Operators in Enforcement\nProceedings. Please refer to this document and note the response options. Be advised that all\nmaterial you submit in response to this enforcement action is subject to being made publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\n120190014M_Notice of Amendment_11072019_text Page 3 of 4\n\n\n\nCPF 1-2019-0014M\ntreatment under 5 U.S.C. 552(b), along with the complete original document you must provide a\nsecond copy of the document with the portions you believe qualify for confidential treatment\nredacted and an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, revised\nprocedures, or a request for a hearing under §190.211. If you do not respond within 30 days of\nreceipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice\nand authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice\nwithout further notice to you and to issue an Order Directing Amendment. If your plans or\nprocedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans\nor procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this\nNotice, we propose that you submit your amended procedures to my office within 30 days of\nreceipt of this Notice. This period may be extended by written request for good cause. Once the\ninadequacies identified herein have been addressed in your amended procedures, this enforcement\naction will be closed.\nIt is requested (not mandated) that Consumers Energy Co maintain documentation of the safety\nimprovement costs associated with fulfilling this Notice of Amendment (preparation/revision of\nplans, procedures) and submit the total to Robert Burrough, Director, PHMSA Eastern Region,\n840 Bear Tavern Road, Suite 300, West Trenton, NJ 08628. Please refer to CPF 1-2019-0014M\non each document you submit, and whenever possible provide a signed PDF copy in electronic\nformat. Smaller files may be emailed to robert.burrough@dot.gov. Larger files should be sent on\nUSB flash drive accompanied by the original paper copy to the Eastern Region Office.\nAdditionally, if you choose to respond to this (or any other case), please ensure that any response\nletter pertains solely to one CPF case number.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Response Options for Pipeline Operators in Enforcement Proceedings\n120190014M_Notice of Amendment_11072019_text Page 4 of 4\n\n120190014M_Operator Respone to Notice_12062019.pdf\n\nConsumers Energy\nCount on Us\nA CMS ENERGY COMPANY\nDecember 6, 2019\nMr. Robert Burrough\nDirector, Eastern Region\n840 Bear Tavern Road, Suite 300\nPipeline and Hazardous Materials Safety Administration\nWest Trenton, NJ 08628\nRE: Consumers Energy Co.\nNotice of Amendment: CPF 1-2019-0014M\nMr. Burrough:\nOn November 7, 2019 Consumers Energy Co. (Consumers Energy) received the Notice of Amendment\nNOA is a result of the May 7-9, 2019 inspection of Consumers Energy's procedures for Functional\n(NOA), CPF 1-2019-0014M, issued by the Pipeline and Hazardous Materials Safety Administration. The\nIntegrity of Underground Natural Gas Storage in Jackson, Michigan.\nConsumers Energy has elected not to contest the allegations set forth in the NOA and will be revising\ntheir procedures.\nConsumers Energy requests that Staff consider the following:\nItem #1\nA. Consumers Energy will update the Storage Integrity Management Program (SIMP)\nManual, Chapter 2.1.8 - Consumers Energy Plug & Abandon Wells to include\nassessment of third party plugged and abandoned wells. Action item to be completed by\n3/31/2020.\nItem #2\nA. Consumers Energy will update the Storage Integrity Management Program (SIMP)\nManual, Chapter 2.2 - Threat and Hazard Identification to include a requirement to\n3/31/2020\nperform a threat and hazard interaction assessment. Action item to be completed by\nB. In addition, the Probability of Failure (POF) equation within the SIMP Risk Assessment\nModel will be updated to include an interacting threat multiplier to account for wells\nsusceptible to high bacteria or hydrogen sulfide and water production. Action item to be\ncompleted by 7/31/2020.\n\n\n\nItem #3\nA. On 06/03/2019, Consumers Energy implemented Gas Storage Procedure - Annular\nCasing Pressure Management Plan (STR-OPS-27) to address the requirements set forth\nin API RP 1171, Section 9.3.2 – Well Integrity Monitoring (see attachment A – STR-\nOPS-27).\nB. Gas Storage Procedure - Annular Casing Pressure Management Plan (STR-OPS-27)\nprovides guidance for annular casing pressure and/or flow monitoring, including data\ncollection, monitoring frequencies, evaluation and validation, diagnostic threshold\ndetermination, maximum allowable wellhead operating pressure determination, and\nreporting for gas storage well operations.\nC. On 06/03/2019, Consumers Energy also implemented Gas Storage Procedure - Annulus\nBleed Down/Build Up Test (STR-OPS-28) to provide diagnostic testing instructions for\nwells exceeding the thresholds established in the Annular Casing Pressure Management\nPlan (see attachment B – STR-OPS-28).\nItem #4\nA. A cross functional team with multiple stakeholders including Operations, Engineering,\nEmergency Management, and Compliance has been assembled to address equipment\nfailures and incorporate the appropriate emergency response within the Consumers\nEnergy Gas Emergency Action Plans. Action item to be completed by 3/31/2020.\nConsumers Energy considers the actions outlined above to satisfactorily address the NOA (CPF 1-2019-\n0014M) dated November 7, 2019. Upon action plan completion Consumers Energy will submit updated\nprocedures in conjunction with additional correspondence to resolve the NOA (CPF 1-2019-0014M)\ndated November 7, 2019.\nPlease contact me if you have any questions or comments.\nThank you,\nBeth L. Fields PE\nDirector of Gas Compliance & Records\nConsumers Energy\nP23-400\n1945 W. Parnall Rd\nJackson, MI 49201\n517-788-2269 office\n517-745-4845 cell\nBeth.Fields@cmsenergy.com\nEnclosures:\n• Attachment A – STR-OPS-27\n• Attachment B – STR-OPS-28\n2\n\n\n\nCC:\nGRochow\nJFBrossoit\nGSalisbury\nMPalkovich\nLWells\nHBowers\nMVanderHeuvel\nPWolven\nSHinshaw\nRWBeach\nSJorgensen\nLDouglas\nGIsham\nCGeorgopoulos\nJHarrington\nRBielenda\nVSprague\nPWaggener\nMBonatham\nKNguyen\nAHutton\nJPionk\nCKing\nMSkillman\nCBuhler\nHWashingtonIII\nJFoley\nSWatson\nKSinger\nDChislea, MPSC\nLOrganek, EGLE\nCWashabaugh - PHMSA\nlara-mpsc-operations@michigan.gov\nPO Box: CE Regulatory Services\n3","truncated":false,"body_characters":15186}