CITIZENS GAS & COKE UTILITY — Warning Letter

12023014WL_Warning Letter_02232023_(22-244908)_text.pdf, page 1Official PDFWARNING LETTER OVERNIGHT EXPRESS DELIVERY February 23, 2023 Mr. Christopher Braun Vice President Energy Operations Citizens Gas & Coke Utility 2150 Dr. MLK Jr. Street Indianapolis, Indiana 46202 CPF 1-2023-014-WL Dear Mr. Braun: From November 1, 2022, through November 3, 2022, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected Citizens Gas & Coke Utility’s (CGCU) Dixon, Switz City and Worthington Storage Facilities in Greene County, Indiana. As a result of the inspection, it is alleged that you have committed probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violations are: 1. § 192.12 Underground natural gas storage facilities. (a) … (b) Depleted hydrocarbon and aquifer reservoir UNGSFs. (1) … (2) Each UNGSF that uses a depleted hydrocarbon reservoir or an aquifer reservoir for natural gas storage and was constructed on or before July 18, 2017, must meet the provisions of API RP 1171 (incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and paragraph (c) of this section, by January 18, 2018, and must meet all provisions of paragraph (d) of this section by March 13, 2021. CGCU failed to meet the provisions of API RP 1171, Section 9. Specifically, CGCU failed to test the operation of the master valve and wellhead pipeline isolation valve at least annually for proper#

12023014WL_Warning Letter_02232023_(22-244908)_text.pdf, page 2function and ability to isolate the well in accordance with API RP 1171, Section 9.3.2 (Section 9.3.2). Section 9.3.2 states in part, “The operator shall test the operation of the master valve and wellhead pipeline isolation valve at least annually for proper function and ability to isolate the well.” During the inspection, CGCU provided test records of the operation of the wellhead master valves and wellhead pipeline isolation valves for 2018 and 2022 but was not able to provide records for 2019, 2020 and 2021. Therefore, CGCU failed to meet the provisions of Section 9.3.2. 2. § 192.12 Underground natural gas storage facilities. (a) … (b) Depleted hydrocarbon and aquifer reservoir UNGSFs. (1) … (2) Each UNGSF that uses a depleted hydrocarbon reservoir or an aquifer reservoir for natural gas storage and was constructed on or before July 18, 2017, must meet the provisions of API RP 1171 (incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and paragraph (c) of this section, by January 18, 2018, and must meet all provisions of paragraph (d) of this section by March 13, 2021. CGCU failed to meet the provisions of API RP 1171, Section 9. Specifically, CGCU failed to perform annual visual wellhead assembly inspections for leaks in accordance with API RP 1171, Section 9.3.2 (Section 9.3.2). Section 9.3.2 states in part, “The operator shall visually inspect each wellhead assembly at least annually for leaks.” During the inspection, CGCU provided records of field notes from 2018 through 2021 that stated that “all wells in the 3 fields were checked” but the notes did not include information that the wells were visually inspected for leaks. Therefore, CGCU failed to meet the provisions of Section 9.3.2. Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $257,664 per violation per day the violation persists, up to a maximum of $2,576,627 for a related series of violations. For violation occurring on or after March 21, 2022, and before January 6, 2023, the maximum penalty may not exceed $239,142 per violation per day the violation persists, up to a maximum of $2,391,142 for a related series of violations. For violation occurring on or after May 3, 2021, and before March 21, 2022, the maximum penalty may not exceed $225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a related series of violations. For violation occurring on or after January 11, 2021, and before May 3, 2021, the maximum penalty may not exceed $222,504 per violation per day the violation persists, up to a maximum of $2,225,034 for a related series of violations. For violation occurring on or after July#

12023014WL_Warning Letter_02232023_(22-244908)_text.pdf, page 331, 2019, and before January 11, 2021, the maximum penalty may not exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. For violation occurring on or after November 27, 2018, and before July 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015, and before November 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum penalty not to exceed $2,090,022. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the items identified in this letter. Failure to do so will result in Citizens Gas & Coke Utility being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 1-2023-014-WL. 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). Sincerely, Robert Burrough Director, Eastern Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration#