{"operation":"document","citation":"CPF 12023063WL","title":"SOUTHERN INDIANA GAS & ELECTRIC CO — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-11-14","effective_on":null,"summary":"CLOSED warning letter citing 192.12(b)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023063wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023063wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12023063wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12023063WL","body":"Warning Letter involving SOUTHERN INDIANA GAS & ELECTRIC CO. PHMSA's enforcement data identifies the cited regulation as 192.12(b)(2). The case was opened on 2023-11-14 and is reported as closed as of 2023-11-14. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12023063WL_Warning Letter_11142023_(22-251757).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023063WL/12023063WL_Warning%20Letter_11142023_(22-251757).pdf\n\n12023063WL_Warning Letter_11142023_(22-251757)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12023063WL/12023063WL_Warning%20Letter_11142023_(22-251757)_text.pdf\n\n12023063WL_Warning Letter_11142023_(22-251757)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nNovember 14, 2023\nMr. Darin Carroll\nPresident and Chief Executive Officer\nSouthern Indiana Gas & Electric Co\n1111 Louisiana Street\nHouston, Texas 77002\nCPF 1-2023-063-WL\nDear Mr. Carroll:\nFrom October 18 to 21, 2022, in an onsite inspection, the Indiana Department of Natural Resources\n(IDNR) acting as a representative of the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected Southern Indiana\nGas & Electric Co’s (Southern Indiana) Monroe, Midway, and Oliver storage facilities in Knox,\nSpencer, and Posey Counties, Indiana.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. § 192.12 Underground natural gas storage facilities.\n(a) . . .\n(b) Depleted hydrocarbon and aquifer reservoir UNGSFs.\n(1) . . .\n(2) Each UNGSF that uses a depleted hydrocarbon reservoir or an\naquifer reservoir for natural gas storage and was constructed on or\nbefore July 18, 2017, must meet the provisions of API RP 1171\n(incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\n\n\n\nSouthern Indiana failed to meet the provisions of API RP 1171, Section 9.3.1. Specifically,\nSouthern Indiana failed to demonstrate that third party mechanical well integrity was evaluated for\n313 wells in multiple UNGSFs.\nAPI RP 1171, Section 9.3.1 Well Integrity Evaluation states:\nThe operator shall evaluate the mechanical integrity of each active well, including\neach third-party well, that penetrates the storage reservoir and buffer zone or areas\ninfluenced by storage operations.\nWell integrity evaluation methods typically used by operators include but are not\nlimited to review of design, completion, and well work records, wellhead and\ndownhole inspection, well pressure monitoring and testing, and gas sampling.\nThe operator shall request well integrity evaluation data from third-party well\nowner/operators following the frequency established using conclusions from the\nrisk assessment.\nActive well mechanical integrity evaluations shall include initial and subsequent\nevaluations as determined using the risk assessment and the information derived\nfrom the initial evaluation.\nDuring the inspection, Southern Indiana was unable to provide documentation where it had\nevaluated the mechanical integrity of any of the third-party wells within its storage facilities.\nTherefore, Southern Indiana failed to meet the provisions of API RP 1171, Section 9.3.1 by failing\nto demonstrate that it implemented a process to evaluate mechanical integrity of third-party wells.\n2. § 192.12 Underground natural gas storage facilities.\n(a) . . .\n(b) Depleted hydrocarbon and aquifer reservoir UNGSFs.\n(1) . . .\n(2) Each UNGSF that uses a depleted hydrocarbon reservoir or an\naquifer reservoir for natural gas storage and was constructed on or\nbefore July 18, 2017, must meet the provisions of API RP 1171\n(incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\nSouthern Indiana failed to meet the provisions of API RP 1171, Section 9.3.2. Specifically,\nSouthern Indiana failed to test the master valves for proper function and the ability to isolate for\n81 wells in the Oliver and Midway storage fields.\nAPI RP 1171, Section 9.3.2 Well Integrity Monitoring states in part: “The operator shall test the\noperation of the master valve and wellhead pipeline isolation valve at least annually for proper\nfunction and ability to isolate the well. The valves shall be maintained, repaired, or replaced in\naccordance with the operator’s valve maintenance program for isolation valves.”\n\n\n\nDuring the inspection, Southern Indiana was unable to provide documentation that the master\nvalves were tested for operation and isolation for 81 wells in its Oliver and Midway storage fields.\nSouthern Indiana indicated that these 81 wells have velocity strings that prevent full operation of\nthe master valves.\nTherefore, Southern Indiana failed meet the provisions of API RP 1171 Section 9.3.2 by failing to\ntest its well master valves.\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$257,664 per violation per day the violation persists, up to a maximum of $2,576,627 for a related\nseries of violations. For violation occurring on or after March 21, 2022, and before January 6,\n2023, the maximum penalty may not exceed $239,142 per violation per day the violation persists,\nup to a maximum of $2,391,142 for a related series of violations. For violation occurring on or\nafter May 3, 2021, and before March 21, 2022, the maximum penalty may not exceed $225,134\nper violation per day the violation persists, up to a maximum of $2,251,334 for a related series of\nviolations. For violation occurring on or after January 11, 2021, and before May 3, 2021, the\nmaximum penalty may not exceed $222,504 per violation per day the violation persists, up to a\nmaximum of $2,225,034 for a related series of violations. For violation occurring on or after July\n31, 2019, and before January 11, 2021, the maximum penalty may not exceed $218,647 per\nviolation per day the violation persists, up to a maximum of $2,186,465 for a related series of\nviolations. For violation occurring on or after November 27, 2018, and before July 31, 2019, the\nmaximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to\nexceed $2,132,679. For violation occurring on or after November 2, 2015, and before November\n27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum\npenalty not to exceed $2,090,022.\nWe have reviewed the circumstances and supporting documents involved in this case, and have\ndecided not to conduct additional enforcement action or penalty assessment proceedings at this\ntime. We advise you to correct the items identified in this letter. Failure to do so will result in\nSouthern Indiana Gas & Electric Co being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 1-2023-063-WL. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. § 552(b), along with the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. § 552(b).\nSincerely,\nRobert Burrough\nDirector, Eastern Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":7906}