UGI ENERGY SERVICES — Notice of Amendment

party submissionOfficial PDF12021017NOA_Operator Response to Notice_05192021_(20-172065).pdf#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 1Official PDFNOTICE OF AMENDMENT VIA ELECTRONIC MAIL TO: jhartz@ugies.com April 19, 2021 Mr. Joseph Hartz Vice President Asset Management UGI Energy Services 1 Meridian Blvd Wyomissing, PA 19610 CPF 1-2021-017-NOA Dear Mr. Hartz: From November 9, 2020 to November 18, 2020, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected UGI Energy Services’ (UGI) procedures and records for the Temple LNG Plant in Reading, Pennsylvania. On the basis of the inspection, PHMSA has identified the apparent inadequacies found within UGI’s plans or procedures, as described below: 1. § 193.2503 Operating procedures. Each operator shall follow one or more manuals of written procedures to provide safety in normal operation and in responding to an abnormal operation that would affect safety. The procedures must include provisions for: (a) … (c) Recognizing abnormal operating conditions. UGI’s operating procedures were inadequate. Specifically, UGI’s Temple 1- LNG Maintenance Manual, revised 7/15/20 and LNG Liquefaction System Manual (collectively, Operating Procedures) failed to include details for recognizing and responding to abnormal operating conditions (AOCs). During the inspection, the PHMSA inspector requested UGI’s procedures regarding abnormal operating conditions, and UGI provided its Operating Procedures. However, the Operating Procedures did not provide adequate guidance on how UGI personnel working outside of the control room recognize and respond to AOCs, nor do they define or list AOCs that may exist at its#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 2CPF 1-2021-017-NOA LNG plant. When the PHMSA inspector requested if there were additional procedures or guidance related to recognizing AOCs, UGI stated there was no further procedures. Therefore, UGI failed to include details in its manuals of written procedures for recognizing AOCs in accordance with § 193.2503(c). UGI must revise its procedures to include provisions for recognizing AOCs. 2. § 193.2509 Emergency procedures. (a) … (b) To adequately handle each type of emergency identified under paragraph (a) of this section and each fire emergency, each operator must follow one or more manuals of written procedures. The procedures must provide for the following: (1) Coordinating with appropriate local officials in preparation of an emergency evacuation plan, which sets forth the steps required to protect the public in the event of an emergency, including catastrophic failure of an LNG storage tank. UGI’s emergency procedures were inadequate. Specifically, UGI’s LNG Emergency Procedures Manual and Asset Emergency Response Plan, revised 10/01/20 failed to provide details for coordinating with appropriate local officials in preparation of an emergency evacuation plan, which sets forth the steps required to protect the public in the event of an emergency, including catastrophic failure of an LNG storage tank. During the inspection, the PHMSA inspector requested UGI’s procedures regarding coordination with local officials in preparation of an emergency evacuation plan. UGI provided its Emergency Procedures Manual and Asset Emergency Response Plan related to emergency types/actions and pointed to the following sections of their manuals, which failed to demonstrate compliance. The Asset Emergency Response Plan, revised 10/01/20, Page 5, stated in part, “The purpose of this Emergency Response Plan (ERP) is to provide consistent policies and procedures to manage an emergency effectively. This plan will assist in protecting the lives and health of the public and UGI Energy Services (UGIES) employees. This plan will provide guidance to protect and minimize damage to company property in the event of an emergency and provide protective measures to ensure minimal impact to the surrounding community during an emergency.” The LNG Emergency Procedures Manual Section 2.4 stated in part, “UGI supervisory personnel shall coordinate with local officials keeping them advised of the location of the plant fire control equipment, the potential hazards at the plant, and the status of each emergency.” These written procedures did not provide specific details for coordinating with appropriate local officials in preparing emergency evacuation plans, nor did it discuss contents of emergency evaluation plans to include steps required to protect the public in the event of an emergency, including catastrophic failure of an LNG storage tank. 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 2 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 3CPF 1-2021-017-NOA When the PHMSA inspector requested if there were additional procedures or guidance related to coordination with local officials in preparation of emergency evacuation plans, UGI did not provide any additional information or response. Therefore, UGI failed to provide details for coordinating with appropriate local officials in preparation of an emergency evacuation plan in accordance with § 193.2509(b)(3). UGI must revise its LNG Emergency Procedures Manual and Asset Emergency Response Plan to address this requirement. 3. § 193.2509 Emergency procedures. (a) … (b) To adequately handle each type of emergency identified under paragraph (a) of this section and each fire emergency, each operator must follow one or more manuals of written procedures. The procedures must provide for the following: (1) … (4) Cooperating with appropriate local officials in evacuations and emergencies requiring mutual assistance… UGI’s emergency procedures were inadequate. Specifically, UGI’s LNG Emergency Procedures Manual failed to require cooperating with appropriate local officials in evacuations and emergencies requiring mutual assistance. During the inspection, the PHMSA inspector requested UGI’s procedures addressing § 193.2509(b)(4), and UGI provided its Emergency Procedures Manual. The Emergency Procedures Manual stated in Section 2.4, “UGI supervisory personnel shall coordinate with local officials keeping them advised of the location of the plant fire control equipment, the potential hazards at the plant, and the status of each emergency.” However, the written procedure did not provide any details or guidance related to the cooperation with local officials in evacuations and emergencies requiring mutual assistance. The Emergency Procedures Manual also failed to define or mention any activity or requirement related to providing mutual assistance. When the PHMSA inspector asked UGI if there were further written procedures regarding mutual assistance, UGI stated there were no specific requirements in their procedures on mutual assistance events during evacuations and emergencies. Therefore, UGI failed to have emergency procedures which require cooperating with appropriate local officials in evacuations and emergencies requiring mutual assistance in accordance with § 193.2509(b)(4). UGI must revise its Emergency Procedures Manual to include details addressing this requirement. 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 3 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 4CPF 1-2021-017-NOA 4. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and… UGI’s maintenance procedures were inadequate. Specifically, UGI’s LNG Truck Transfer System Manual, dated 7/10/19 and Temple 1-LNG Maintenance Manual, dated 7/15/20 (collectively, Transfer Hose Procedures) failed to provide details regarding testing of transfer hoses once each calendar year, but with intervals not exceeding 15 months, to the maximum pump pressure or relief valve setting in accordance with § 193.2621(a). Section 193.2621(a) states: Hoses used in LNG or flammable refrigerant transfer systems must be: (a) Tested once each calendar year, but with intervals not exceeding 15 months, to the maximum pump pressure or relief valve setting; During the inspection, the PHMSA inspector requested UGI’s procedure regarding testing and inspection of transfer hoses. UGI provided its Transfer Hose Procedures related to Temple I, as this is the only area with a truck transfer system. The Temple 1-LNG Maintenance Manual, dated 7/15/20, Sections 2.E. Trucking System and 2.F. Truck Rack Expansion System included a requirement for a truck transfer hose pressure test to be performed at a 12-month frequency. However, the Transfer Hose Procedures did not provide a procedure requiring that each transfer hose must be tested to the maximum pump pressure or relief valve setting, or any details on how the truck transfer hose pressure test is performed. When the PHMSA inspector requested additional information related to testing of transfer hoses, UGI did not provide any additional information or response. Therefore, UGI failed to include details in its written procedures that transfer hoses must be tested once each calendar year, but with intervals not exceeding 15 months, to the maximum pump pressure or relief valve setting in accordance with § 193.2621(a), as required by §193.2605(b). UGI must revise its Transfer Hose Procedures to include a detailed procedure for testing transfer hoses in accordance with § 193.2621(a). 5. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and… 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 4 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 5CPF 1-2021-017-NOA UGI’s maintenance procedures were inadequate. Specifically, UGI’s Temple 1-LNG Maintenance Manual, dated 7/15/20 and Temple II Tank and Sendout System Operations Manual, dated 10/17/19 failed to address how it monitors for internal corrosion in accordance with the requirements of § 193.2635(e). Section 193.2635(e) states: Corrosion protection provided as required by this subpart must be periodically monitored to give early recognition of ineffective corrosion protection, including the following, as applicable: … (e) If a component is protected from internal corrosion, monitoring devices designed to detect internal corrosion, such as coupons or probes, must be located where corrosion is most likely to occur. However, monitoring is not required for corrosion resistant materials if the operator can demonstrate that the component will not be adversely affected by internal corrosion during its service life. Internal corrosion control monitoring devices must be checked at least two times each calendar year, but with intervals not exceeding 7 1/2 months. During the inspection, the PHMSA inspector requested UGI’s procedure regarding internal corrosion monitoring. UGI provided its Temple 1-LNG Maintenance Manual and Temple II Tank and Sendout System Operations Manual. The Temple 1-LNG Maintenance Manual, procedure MP-45 Corrosion Protection, stated in part, “Per CFR Part 193.2636, WEG1 sampling and testing is to be conducted on a 6-month interval and not to exceed 7-months” …and that the protection systems are the “Corrosion inhibitors contained within WEG and lube oil fluid.” The Temple 1-LNG Maintenance Manual, however, referenced a non-existent code citation from CFR Part 193. The Temple II Tank and Sendout System Operations Manual, procedure MP-1110 stated in part, “The WEG should be checked on an annual basis for the following attributes % glycol, PH, Corrosion inhibitor…” The Temple 1-LNG Maintenance Manual, dated 7/15/20 and Temple II Tank and Sendout System Operations Manual, dated 10/17/19 failed to mention which components are subject to internal corrosive attack and how they are protected from internal corrosion. Additionally, the Procedures failed to describe UGI’s internal corrosion monitoring device requirements, including details such as where they are required or if any protected components utilizing corrosion resistant materials are excepted from monitoring. When the PHMSA inspector asked for additional information regarding internal corrosion monitoring, UGI stated the CFR reference was outdated, however the WEG testing is conducted. Therefore, UGI failed to include details in its written Procedures for Temple I and Temple II regarding internal corrosion monitoring in accordance with § 193.2635(e), as required by 1 Water-Ethylene Glycol 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 5 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 6CPF 1-2021-017-NOA § 193.2605(b). UGI must revise its procedures to address § 193.2635(e). 6. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and… UGI’s maintenance procedures were inadequate. Specifically, UGI’s Temple 1-LNG Maintenance Manual, dated 7/15/20 and Temple II Tank and Sendout System Operations Manual, dated 10/17/19 failed to provide adequate guidance requiring each auxiliary power source to be tested annually for capacity in accordance with § 193.2613. Section 193.2613 states: Each auxiliary power source must be tested monthly to check its operational capability and tested annually for capacity. The capacity test must take into account the power needed to start up and simultaneously operate equipment that would have to be served by that power source in an emergency. During the inspection, the PHMSA inspector requested UGI’s procedure regarding auxiliary power sources. The Temple 1-LNG Maintenance Manual Procedure stated in part (emphasis added): The Temple I facility’s temporary auxiliary power source is provided by a CUMMINS 500 DFEK SPEC F, diesel fueled generator. The generator has a load capacity of 500KW for the facility’s 480 VAC service. Load is transferred to the generator by way of an automatic transfer switch. Frequency: Operational Test – Monthly Capacity Load Test – Annually … B. Capacity Load Test Note: The following procedure only needs to be performed if a commercial power outage has not occurred in the prior 12-months. Similarly, the Temple II Tank and Sendout System Operations Manual Procedure Section 15.51 stated in part (emphasis added): General: The Temple II facility’s standby power source is provided by Kawasaki GPS4000 natural gas turbine generator. The generator has a load capacity of 3.2MW for the facility’s 4160V service. Frequency: Operational Test – Monthly 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 6 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 7CPF 1-2021-017-NOA Capacity Load Test – Annually … C. Capacity Load Test Note: The following procedure only needs to be performed if a commercial power outage requiring the generator’s operation has not occurred in the prior 12-months. The Auxiliary Power Procedures did not provide an adequate process that ensures that each auxiliary power source is tested annually for capacity, with the capacity test taking into account the power needed to start up and simultaneously operate equipment that would have to be served by that power source in an emergency. A commercial power outage resulting in the generator’s operation may not provide an adequate test of the capacity of the power source as described in § 193.2613. Therefore, UGI failed to include adequate details in its written maintenance procedures that each auxiliary power source is to be tested annually for capacity in accordance with § 193.2613, as required by § 193.2605(b). UGI must revise its procedures to require annual capacity testing of auxiliary power sources, and for the capacity testing to account for the specific requirements of § 193.2613. 7. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and… UGI’s maintenance procedures were inadequate. Specifically, UGI’s Temple II Tank and Sendout System Operations Manual, dated 10/17/19 failed to provide details regarding fire protection inspection frequencies for Temple II facilities, in accordance with § 193.2619(c)(2). Section 193.2619(c)(2) states: (c) Control systems in service, but not normally in operation, such as relief valves and automatic shutdown devices, and control systems for internal shutoff valves for bottom penetration tanks must be inspected and tested once each calendar year, not exceeding 15 months, with the following exceptions: (2) Control systems that are intended for fire protection must be inspected and tested at regular intervals not to exceed 6 months. During the inspection, the PHMSA inspector requested UGI’s procedure regarding control systems meeting the requirements of § 193.2619(c)(2). UGI provided its procedures regarding control systems for Temple II facilities. 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 7 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 8CPF 1-2021-017-NOA The Temple II Tank and Sendout System Operations Manual, Procedure MP-1055 Fire Detection/Fire Protection Test and Inspection, included a process for testing its Detronics fire detection system. However, these procedures did not provide any details or guidance requiring that control systems intended for fire protection must be inspected and tested at regular intervals not to exceed 6 months. When the PHMSA inspector asked if this information was contained in any UGI procedures, UGI provided Table 15.2.3 Temple II Sendout System Maintenance. However, this document was not incorporated or referenced in any UGI Procedures, nor did it appear to address inspection frequencies for all control systems intended for fire protection. Therefore, UGI failed to include details in its written procedures for Temple II facilities that control systems intended for fire protection must be inspected and tested at regular intervals not to exceed 6 months in accordance with § 193.2619(c)(2), as required by § 193.2605(b). UGI must revise its procedures to provide details for fire protection control system inspection frequencies for its Temple II facilities. 8. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and… UGI’s maintenance procedures were inadequate. Specifically, UGI’s Temple 1-LNG Maintenance Manual, dated 7/15/20 and Temple II Tank and Sendout Systems Operations Manual, dated 10/17/19 failed to provide details on inspecting LNG storage tank Temple T-II in accordance with § 193.2623. Section 193.2623 states: Each LNG storage tank must be inspected or tested to verify that each of the following conditions does not impair the structural integrity or safety of the tank: (a) Foundation and tank movement during normal operation and after a major meteorological or geophysical disturbance. (b) Inner tank leakage. (c) Effectiveness of insulation. (d) Frost heave. During the inspection, the PHMSA inspector requested UGI’s procedure regarding inspecting LNG storage tanks. UGI provided the written Tank Procedures related to Temple I and Temple II LNG storage tanks. The Temple II Tank and Sendout Systems Operations Manual, Section 15.1, General stated in part, “In addition to the normal maintenance procedure, all LNG personnel shall note and report in writing: Any abnormal ground movements that might impair the structural integrity, or reliability the LNG-tank or plant piping systems. 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 8 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 9CPF 1-2021-017-NOA -Any malfunction that exposes process piping or vessels or the LNG-tank to an overpressure condition (beyond maximum operating pressure plus allowable build-up). -Any leak of gas or LNG from piping or vessels. -Any condition such as inner-tank leakage, ineffective insulation, or frost heave that impairs the structural integrity of the LNG tank.” However, the Procedures did not provide any details or guidance on how UGI inspects or tests Temple Tank T-II for inner tank leakage, effectiveness of insulation and frost heave. When the PHMSA inspector asked UGI about the related Procedure, UGI stated that there are no processes or procedures for these inspections or tests because it is a concrete walled tank. However, Section 193.2623 does not provide exception for concrete walled tanks. Therefore, UGI failed to include details in its written procedures on inspecting or testing LNG storage tank Temple T-II, as required by § 193.2605(b). UGI must revise its procedures to include a process for inspecting or testing Temple T-II in accordance with § 193.2623. 9. § 193.2605 Maintenance procedures. (a) … (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) … (2) A description of other actions necessary to maintain the LNG plant according to the requirements of this subpart. UGI’s maintenance procedures were inadequate. Specifically, UGI’s Temple 1-LNG Maintenance Manual, dated 7/15/20 failed to include details that the LNG plant grounds must be free from rubbish, debris, and other material which present a fire hazard in accordance with § 193.2607(b). Section 193.2607(b) states: LNG plant grounds must be free from rubbish, debris, and other material which present a fire hazard. Grass areas on the LNG plant grounds must be maintained in a manner that does not present a fire hazard. During the inspection, the PHMSA inspector requested UGI’s procedures regarding their process to maintain the facility to be free from the presence of foreign material and debris. UGI provided its Temple 1-LNG Maintenance Manual, dated 7/15/20, which failed to indicate any such requirement. When the PHMSA inspector requested if there were additional procedures or guidance related to maintaining the facility free from the presence of foreign material and debris, UGI did not provide any additional information or response. Therefore, UGI failed to include details in its written procedures that the LNG plant grounds must be free from rubbish, debris, and other material which present a fire hazard in accordance with 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 9 of 10#

12021017NOA_Notice of Amendment_04192021_(20-172065)_text.pdf, page 10CPF 1-2021-017-NOA § 193.2607(b), as required by §193.2605(b). UGI must revise its procedures to address this requirement. 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 Enforcement 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 30 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 UGI Energy Services 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, NJ 08628. In correspondence concerning this matter, please refer to CPF 1-2021-017-NOA and, for each document you submit, please provide a copy in electronic format whenever possible. Smaller files may be emailed to robert.burrough@dot.gov. Larger files should be sent on USB flash drive accompanied by the original paper copy to the Eastern Region Office. Sincerely, Robert Burrough Director, Eastern Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Enforcement Proceedings 12021017NOA_Notice of Amendment_04192021_(20-172065)_text Page 10 of 10#

12021017NOA_Closure Letter_05032022_(20-172065)_text.pdf, page 1Official PDFOVERNIGHT EXPRESS DELIVERY May 3, 2022 Mr. Dante D’ Alessandro Vice President – Engineering and Operations UGI Energy Services 1 Meridian Boulevard Wyomissing, PA 19610 CPF 1-2021-017-NOA Dear Mr. D’Alessandro: From November 9, 2020 to November 18, 2020, 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 UGI Energy Services’ (UGI) procedures for the Temple LNG Plant in Reading, Pennsylvania. As a result of the inspection, UGI was issued a Notice of Amendment (NOA) on April 19, 2021, which proposed amendment of your procedures. On August 6, 2021 UGI submitted its amended procedures for items 2 – 9, only. On March 11, 2022, PHMSA issued an Ordering Directing Amendment (Order) to UGI requiring UGI to amend certain portions of its procedures. On April 18, 2022 UGI provided its response to the Order. My staff reviewed the amended procedures, and it appears that the inadequacies outlined in this Order 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#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_text.pdf, page 1Official PDFMarch 11, 2022 VIA ELECTRONIC MAIL TO: ddalessandro@ugies.com Mr. Dante D’Alessandro Vice President – Engineering and Operations UGI Energy Services 1 Meridian Boulevard Wyomissing, Pennsylvania 19610 Re: CPF No. 1-2021-017-NOA Dear Mr. D’Alessandro: Enclosed please find the Order Directing Amendment issued in the above-referenced case to UGI Energy Services, LLC (UGIES). It makes findings of inadequate procedures, finds that certain amended procedures provided by UGIES are adequate, and requires UGIES to amend certain portions of its procedures for the Temple LNG Plant in Reading, Pennsylvania. When the amendment of procedures has been completed, as determined by the Director, Eastern Region, this enforcement action will be closed. Service of the Order by email is complete upon transmission and acknowledgement of receipt, 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. Jeremy Kuhn, Manager, Pipeline Engineering & Compliance, UGIES, jkuhn@ugies.com CONFIRMATION OF RECEIPT REQUESTED#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_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 ) UGI Energy Services, LLC, ) CPF No. 1-2021-017-NOA ) ) ) Respondent. ) ____________________________________) ORDER DIRECTING AMENDMENT From November 9, 2020 to November 18, 2020, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected UGI Energy Services, LLC’s (UGIES or Respondent) procedures and records for the Temple LNG Plant in Reading, Pennsylvania. As a result of the inspection, the Director, Eastern Region, OPS, issued to Respondent, by letter dated April 19, 2021, a Notice of Amendment (Notice). In accordance with 49 C.F.R. § 190.206, the Notice proposed finding that certain of UGIES’s plans and procedures were inadequate to assure safe operation and proposed that Respondent amend its procedures for operations, maintenance, and emergencies. UGIES responded to the Notice by letter dated May 19, 2021 (Response). In its Response, UGIES contested Item 1 of the Notice, but did not contest the remaining eight items. On August 6, 2021, UGIES provided amended procedures in response to Item 2 through 9 of the Notice for review and approval by the Director, Eastern Region. The company did not request a hearing and therefore waived its right to one. FINDING OF INADEQUATE PROCEDURES Item 1: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 193.2503(c), which states: § 193.2503 Operating procedures. Each operator shall follow one or more manuals of written procedures to provide safety in normal operation and in responding to an abnormal operation that would affect safety. The procedures must include provisions for: (a) . . . . (c) Recognizing abnormal operating conditions.#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_text.pdf, page 3CPF No. 1-2021-017-NOA Page 2 The Notice alleged that UGIES’s operating procedures were inadequate for recognizing and responding to abnormal operating conditions (AOCs) with regard to § 193.2503(c). Specifically, the Notice alleged the company’s procedures failed to provide adequate guidance on how UGIES personnel working outside of the control room were to recognize and respond to AOCs. In its Response, UGIES contested this allegation of inadequacy. Specifically, UGIES stated that its written alarm monitoring and response procedures discuss possible AOC scenarios for various associated systems as well as resolutions to the AOCs identified. Further, UGIES points to subsections in its alarm monitoring procedures that discuss how to handle AOCs when personnel are outside of the control room. Based on those references, UGIES argued that its procedures are adequate for safety and satisfy the applicable regulatory requirements. Having reviewed UGIES procedure titled “Remote Alarm Monitoring” (Procedure), I find that it lacks sufficient detail to assure safe operation with regard to § 193.2503(c). While the Procedure did include references to how personnel are to respond to certain alarms, it lacked adequate detail to clarify how operator personnel are to recognize and respond to all AOCs that would affect safety. Specifically, the Procedure failed to establish the specific types of alarms received by the remote alarm monitoring system (for example, does the remote alarm monitoring system receive all the alarms the control center receives or only certain ones), how the Gas Operations Supervisor (GSOS) conducting the monitoring should contact appropriate personnel if they are unable to contact the LNG Technician on-call, and how the remote alarm incidents are documented. Further, the Procedure did not specify under what alarm scenarios the LNG Technician should instruct the GSOS to conduct emergency shutdown (ESD). Additionally, the procedures fail to specify whether other measures must be in place to respond to the AOC when initiating ESD is not appropriate. Accordingly, based upon a review of all the evidence, I find that Respondent’s Procedure was inadequate, as alleged in the Notice, and revisions are required to include the additional information and clarifications referenced above in order to assure safety with regard to § 193.2503(c). Item 2: The Notice alleged that Respondent’s procedures were inadequate with regard to 49 C.F.R. § 193.2509(b)(3), which states: § 193.2509 Emergency procedures. (a) . . . . (b) To adequately handle each type of emergency identified under paragraph (a) of this section and each fire emergency, each operator must follow one or more manuals of written procedures. The procedures must provide for the following: (3) Coordinating with appropriate local officials in preparation of an emergency evacuation plan, which sets forth the steps required to protect the public in the event of an emergency, including catastrophic failure of an LNG storage tank. The Notice alleged that UGIES’s emergency procedures were inadequate with regard to#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_text.pdf, page 4CPF No. 1-2021-017-NOA Page 3 § 193.2509(b)(3).1 In its Response, UGIES provided its amendments. The Director, Eastern Region, reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary with regard to this Item. Item 3: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 193.2509(b)(4), which states: § 193.2509 Emergency procedures. (a) . . . . (b) To adequately handle each type of emergency identified under paragraph (a) of this section and each fire emergency, each operator must follow one or more manuals of written procedures. The procedures must provide for the following: (1) . . . . (4) Cooperating with appropriate local officials in evacuations and emergencies requiring mutual assistance and keeping those officials advised of: The Notice alleged that UGIES’s emergency procedures were inadequate with regard to § 193.2509(b)(4). In its Response, UGIES provided its amendments. The Director, Eastern Region, reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary with regard to this Item. Items 4 through 7: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 193.2605(b)(1), which states: § 193.2605 Maintenance procedures. (a) . . . . (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and The Notice alleged that UGIES’s emergency procedures were inadequate with regard to § 193.2605(b)(1). In its Response, UGIES provided its amendments. The Director, Eastern Region, reviewed the amended procedure and concluded that the inadequacies had been corrected. 1 It appears the Notice contained a typographical error and cited this regulation as § 193.2509(b)(1).#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_text.pdf, page 5CPF No. 1-2021-017-NOA Page 4 Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary with regard to these Items. Item 8: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 193.2605(b)(1), which states: § 193.2605 Maintenance procedures. (a) . . . . (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (1) The details of the inspections or tests determined under paragraph (a) of this section and their frequency of performance; and The Notice alleged that UGIES’s emergency procedures were inadequate with regard to § 193.2605(b)(1). In its Response, UGIES did not contest the allegation and provided its amendments. The Director, Eastern Region, reviewed the amended procedures and found certain inadequacies still remain. Although the amendments clarified the temperature monitoring system and added a visual inspection of the outer tank if an alarm sounds, they did not contain adequate detail regarding the visual inspection requirement. In particular, the amended procedures state that a visual inspection shall be performed if an alarm is received, but do not describe the process for conducting and documenting these inspections. The amended procedures also do not include a requirement that a visual inspection of the outer tank be conducted within a specified interval of time if an alarm is not received. The procedures did not include a process for responding to issues discovered during a visual inspection. In addition, the procedures did not include requirements that temperature transmitter calibration and testing be conducted at a specified frequency and documented. Accordingly, based upon a review of all the evidence, I find that Respondent’s emergency procedures were inadequate, as alleged in the Notice, and revisions are required to include the additional information and clarifications referenced above in order to assure safety with regard to § 193.2605(b)(1). Item 9: The Notice alleged that Respondent’s operations and maintenance procedures were inadequate with regard to 49 C.F.R. § 193.2605(b)(2), which states: § 193.2605 Maintenance procedures. (a) . . . . (b) Each operator shall follow one or more manuals of written procedures for the maintenance of each component, including any required corrosion control. The procedure must include: (2) A description of other actions necessary to maintain the LNG plant according to the requirements of this subpart. The Notice alleged that UGIES’s emergency procedures were inadequate with regard to#

12021017NOA_Order Directing Amendment_03112022_(20-172065)_text.pdf, page 6CPF No. 1-2021-017-NOA Page 5 § 193.2605(b)(2). In its Response, UGIES provided its amendments. The Director, Eastern Region, reviewed the amended procedure and concluded that the inadequacies had been corrected. Accordingly, based upon a review of all the evidence, I find that Respondent’s procedures were inadequate, as alleged in the Notice, but have subsequently been adequately modified. Therefore, no further action is necessary with regard to this Item. Pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206, UGIES is ordered to revise its procedures as specified in Items 1 and 8 above. Respondent must submit the amended procedures to the Director, Eastern Region, within 30 days following receipt of this Order. 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. 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. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Order Directing Amendment 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 this Order Directing Amendment 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 terms of the order, including required amendment to procedures, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Order Directing Amendment are effective upon service in accordance with 49 C.F.R. § 190.5. March 11, 2022 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#