TEXAS EASTERN TRANSMISSION, LP (SPECTRA ENERGY PARTNERS, LP) — Notice of Probable Violation

220051004_final order_04132006_text.pdf, page 1Official PDFU 5 Department of transportation tsipellne and Hazardous Materials Safety Administration 400 Sevenar Street S W Washington O C 20500 APR 1 3 2GG6 Mr Gregory P Bilinslu Vice President, Transmission Texas Eastern Transmission, L P 5400 Westhetmer Court Houston, TX 77056-5310 Re CPF No 2-2005-1004 Dear Mr Bthnskt Enclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in the above-referenced case It withdraws one of the allegations of violation, makes a finding of violation, and assesses a civil penalty of $20, 000 The penalty payment terms are set forth in the Final Order This enforcement action closes automatically upon payment Your receipt of the Final Order constitutes service of that document under 49 C F R ts 190 5 Sincerely, James Reynolds Pipeline Compliance Registry Office of Pipeline Safety cc Ms Ltnda Daugherty Director, Southern Region, OPS Enclosure CERTIFIED MAIL - RETURN RECEIPT RE VESTED#

220051004_final order_04132006_text.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D. C. 20590 In the Matter of ) Texas Eastern Transmission, L. P, ) ) ) Respondent. ) CPF No 2-2005-1004 FINAL ORDER Between May 17 and August 27, 2004, pursuant to 49 U S C l'I 60117, representatives of the Pipeline and Hazardous Materials Safety Admmistration (PHMSA) conducted an on-site pipelme safety inspection of Respondent's facilities and records in Mississippi, Arkansas, Alabama, and Tennessee As a result of the mspection, the Director, Southern Region, PHMSA, issued to Respondent, by letter dated March 17, 2005, a Notice of Probable Violation and Proposed Civil Penalty (Notice) In accordance with 49 C F R t't 190 207, the Notice proposed finding that Respondent had committed violations of 49 C F R Part 192 and proposed assessing a civil penalty of $35, 000 for the alleged violations Respondent responded to the Notice by letter dated Apnl 14, 2005 (Response) Respondent stated that it intended to contest two of the allegations and requested a heanng The heanng was held on July 14, 2005 in Atlanta, Georgia After this heanng, Respondent provided additional information for the record on August 31, 2005 FINDING OF VIOLATION Item I m the Notice alleged that Respondent violated 49 C F R lI 192 605 by fiulmg to demonstrate that it followed the abnormal operating procedures for correcting the condition(s) that resulted in the pipehne's maximum allowable operatmg pressure (MAOP) being exceeded on four specified occasions In its August 31, 2005 letter, Respondent withdrew its contest of Item I, but provided additional information regarding this item and requested that PHMSA consider reducing or eliminating the civil penalty proposed in the Notice for this item Accordmgly, I find that Respondent violated tl 192 605 by failmg to demonstrate that it followed the abnormal operating procedures for correcting the condition(s) that resulted in the pipeline's maximum allowable operating pressure (MAOP) being exceeded on four occasions#

220051004_final order_04132006_text.pdf, page 3This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent WITHDRAWAL OF ALLEGATION Item 3 in the Notice alleged that Respondent violated 49 C F R 5 192 705 by failing to patrol the pipeline nght-of-way in the vicimty of Mile Post 110 by a method that allowed the surface conditions to be observed In its response and at the hearing, Respondent submitted information demonstratmg that at least some of the patrols it had conducted dunng the relevant calendar year were performed in a manner that allowed the surface conditions to be observed to the extent required in a Class I area Based on this information demonstrating comphance with the regulation, I am withdrawing this allegation of violation ASSESSMENT OF PENALTY Under 49 U S C g 60122, Respondent is sublect to a mvil penalty not to exceed $100, 000 per violation for each day of the violation up to a maximum of $1, 000, 000 for any related series of violations 49 U S C t'I 60122 and 49 C F R 5190225 reqmre that, in determining the amountof the civil penalty, I consider the following cnteria nature, circumstances, and gravity of the violation, degree of Respondent's culpability, history of Respondent's prior offenses, Respondent's abihty to pay the penalty, good faith by Respondent in attempting to achieve compliance, the effect on Respondent's abihty to continue in business, and such other matters as lusnce may require With respect to Item I, the Notice proposed a civil penalty of $20, 000 for Respondent*s failure to demonstrate that it followed the abnormal operating procedures for correcting the condition(s) that resulted in the pipeline's MAOP being exceeded on four occasions Responding to and promptly correcting abnormal operating conditions is an important part of pipeline safety Over-pressure events in particular must be fully addressed because they have the potential to damage the pipehne and increase the nsk of future fiulures In its response and at the heanng, Respondent acknowledged that it could have better documented its response to these events, but contended that its decision not to take any corrective action was Iustified because it beheved the cause of some of these incidents was related to equipment fiulure According to the record, however, there is reason to beheve that decisions made by gas control contributed to the MAOP being exceeded on most if not all of the specified occasions Respondent failed to demonstrate that any staffing dynamics or control training issues have been identified and addressed or other follow-up actions were taken to ensure that over-pressure events would not continue to reoccur Respondent has presented no information that would warrant a reduction in the civil penalty amount proposed in the Notice for this violation Accordingly, having reviewed the record and considered the assessment critena, I assess Respondent a civil penalty of $20, 000 for violating 49 C F R tl 192 605#

220051004_final order_04132006_text.pdf, page 4With respect to Item 3, the Notice proposed a civil penalty of $15, 000 Since this item was withdrawn, the proposed civil penalty for this item is not assessed Accordingly, having reviewed the record and considered the assessment cnteria, I assess Respondent a total civil penalty of $20, 000 Payment of the civil penalty must be made within 20 days of service Federal regulations (49 C F R tt 89 21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U S Treasury Detailed instructions are contiuned in the enclosure Questions concerning wire transfers should be directed to Financial Operations Division (AMZ-300), Federal Aviation Admmistration, Mike Monroney Aeronautical Center, P 0 Box 25082, Oklahoma City, OK 73125, (405) 954-8893 Failure to pay the $20, 000 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 US C 113717, 31 C FR I'1 901 9 and49 C F R ll 8923 Pursuant to those same authonties, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropnate action in a United States Distnct Court WARNING ITEM The Notice did not propose a civil penalty or corrective action for Item 2 in the Notice, Respondent's fiulure to maintain visible pipeline markers at three specified locations in accordance with 1'I 192 707 Therefore, this is considered to be a warning item Respondent is warned that if it does not take appropnate action to correct this item, enforcement action will be taken if a subsequent inspection reveals a violation Under 49 C F R ts 190 215, Respondent has a nght to subinit a petition for reconsideration of this Final Order Should Respondent elect to do so, the petition must be received within 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s) The fihng of a petition automatically stays the payment of any civil penalty assessed However if Respondent submits payment for the civil penalty, the Final Order becomes the final administrative decision and the nght to petition for reconsideration is waived The terms and conditions of this Final Order are effective on receipt APR 1 3 200o Date Issued St cey e d As iat Administrator for Pipeline Safety#