TAMPA BAY PIPELINE CO. — Notice of Probable Violation

220126008_closure Letter_09162014_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED September 16, 2014 Mr. Robert L. Rose President Tampa Bay Pipeline Company P.O. Box 35236 Sarasota, FL 34242 CPF 2-2012-6008 Dear Mr. Rose: On September 14, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) issued Tampa Bay Pipeline Company (TBPL) a Final Order with an attached Compliance Order in the above-referenced case. The Compliance Order required TBPL to undertake certain actions to ensure compliance with the federal pipeline safety regulations. Subsequent to the Final Order, TBPL took certain actions to comply with the requirements in the Compliance Order and provided the OPS Southern Region with documentation of those actions. Based on our review of the actions taken by TBPL and the supporting documentation, we have determined that TBPL has completed its actions with regards to the Compliance Order and the Final Order. This case is now closed and no further action is necessary with respect to the matters involved in this case. Please be advised that this letter refers only to the above referenced order (CPF 2-2012-6008) and not to any other PHMSA cases, if any. Sincerely, Wayne T. Lemoi Director, Office of Pipeline Safety PHMSA Southern Region#

220126008_NOPV PCP PCO_05092012_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL – RETURN RECEIPT REQUESTED May 9, 2012 Mr. Robert L. Rose President Tampa Bay Pipeline Company P.O. Box 35236 Sarasota, FL 34242 CPF 2-2012-6008 Dear Mr. Rose: From September 12-16, 2011, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Southern Region, inspected the Tampa Bay Pipeline Company (TBPL) Pipeline Integrity Management Plan (IMP) in Tampa, Florida, pursuant to Chapter 601 of 49 United States Code. As a result of the inspection, it appears that TBPL has committed probable violations of the Pipeline Safety Regulations codified in Title 49 of the Code of Federal Regulations. The items inspected and the probable violations are as follows: 1. §195.452 Pipeline integrity management in high consequence areas. .... (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. The methods an operator selects to assess low frequency electric resistance welded pipe or lap welded pipe susceptible to longitudinal seam failure must be capable of assessing seam integrity and of detecting corrosion and deformation anomalies. .... (C) Other technology that the operator demonstrates can provide an equivalent understanding of the condition of the line pipe. An operator choosing this option must notify the Office of Pipeline Safety (OPS) 90 days before conducting the#

220126008_NOPV PCP PCO_05092012_text.pdf, page 2assessment, by sending a notice to the address or facsimile number specified in paragraph (m) of this section.1 TBPL did not properly perform the integrity assessment of its line pipe using External Corrosion Direct Assessment (ECDA), the pipeline integrity assessment method TBPL selected for its baseline assessment plan. That is, because TBPL did not account for all above ground pipe and all pipe in vaults, it did not properly perform the ECDA Pre- Assessment Step, which included the (1) ECDA Feasibility Assessment, (2) Selection of Indirect Inspection Tools, and (3) Identification of ECDA Regions. In a letter dated July 20, 2005, TBPL notified the PHMSA Southern Region Director that it would use ECDA to complete its pipeline integrity assessment in accordance with paragraph §195.452(c)(1)(i)(C). Prior to November 25, 2005, ECDA was considered “other technology,” which required a pipeline operator to give the Office of Pipeline Safety (OPS) [i.e. PHMSA] 90 days notice before conducting the assessment. In its notification letter, TBPL stated that its “assessment technology as a minimum follows ASME B31.8S Managing System Integrity of Gas Pipelines and the NACE RP 0502, standard Recommended Practices for External Corrosion Direct Assessment.” The NACE 0502 edition in place at that time was the 2002 edition, which was not incorporated by reference into the federal pipeline safety regulations in Part 195 at that time. Notwithstanding TBPL’s statements in its July 20, 2005, letter, TBPL had above ground pipe and pipe in vaults, which were not properly addressed in the ECDA Pre-Assessment Step completed before November 25, 2005, in accordance with NACE 0502 as follows: (1) ECDA Feasibility Assessment: NACE RP0502-2002 sub-section 3.3.1 required the operator to determine whether there were conditions where indirect inspection tools could not be used and sub-section 3.3.2 allowed the operator to use ECDA if the operator used other methods of assessing the integrity of the line pipe. Indirect inspection tools cannot assess above ground pipe or pipe in vaults. (2) Selection of Indirect Inspection Tools: NACE RP0502-2002 sub-section 3.4.1 required the operator to select at least two indirect inspection tools for all locations where ECDA was applied, based on the ability of the tools to assess the pipe conditions, while allowing the substitution of 100% direct examination. Indirect inspection tools cannot assess above ground pipe or pipe in vaults. (3) Identification of ECDA Regions: NACE RP0502-2002 sub-section 3.5.1 required the operator to identify ECDA regions based on having similar physical characteristics and using the same indirect inspection tools. In performing the ECDA Pre-Assessment TBPL determined that ECDA was feasible using two indirect inspection tools over the pipeline segments, except for pipe in casings which were included in separate ECDA regions. TBPL did not identify the above ground pipe and pipe in vaults as locations where ECDA indirect inspection tools could not be applied. These locations should have been identified as separate ECDA regions. 1 §195.452(c)(1)(i)(C) as stated above reflects the code language in place prior to November 25, 2005, at the time TBPL undertook its baseline assessment using ECDA. The code has been amended several times since then. ECDA was considered “Other Technology” prior to November 25, 2005. Page 2 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 32. §195.452 Pipeline integrity management in high consequence areas. .... (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. The methods an operator selects to assess low frequency electric resistance welded pipe or lap welded pipe susceptible to longitudinal seam failure must be capable of assessing seam integrity and of detecting corrosion and deformation anomalies. .... (D) Other technology that the operator demonstrates can provide an equivalent understanding of the condition of the line pipe. An operator choosing this option must notify the Office of Pipeline Safety (OPS) 90 days before conducting the assessment, by sending a notice to the address or facsimile number specified in paragraph (m) of this section.2 TBPL did not properly perform the integrity assessment of line pipe in casings using Guided Wave Ultrasonic Testing (GWUT), the pipeline integrity assessment method TBPL selected for pipe in casings. Specifically, TBPL did not assess all of its line pipe in several casings assessed with GWUT because the inspection range of the GWUT was less than the total length of the pipe in the casings. TBPL’s IMP Section 6.0 Direct Assessment Plan required multiple GWUT “shots” if the inspection range was less than the total length of the pipe inside the casing. For the casings listed below, the GWUT inspection range was less than the total length of the pipe inside the casings but TBPL completed only one GWUT “shot” which resulted in pipe within the casing not being assessed by the GWUT. Casing Location Length of Pipe in Casing GWUT Inspection Range 2-5 South side of 22nd St - ½ mile W. Sagasta 40-feet 36-feet 6-10 Keysville Rd @ CR 640 68-feet 53-feet 6-11 Bypass across CR 640 @ County Line Rd 72-feet 42-feet 7-20 Retaining Pond on Fishhawk Blvd 1st casing W of CR 640 50-feet 27-feet 9-2 Nichols Rd & Anderson Rd 65-feet 43-feet 3. §195.452 Pipeline integrity management in high consequence areas. .... (d) When must operators complete baseline assessments? Operators must complete baseline assessments as follows: (1) Time periods. Complete assessments before the following deadlines: If the pipeline is: Then complete baseline assessments not later than the following date according to a schedule that prioritizes assessments: And assess at least 50 percent of the line pipe on an expedited basis. Beginning with the highest risk pipe, not later than: 2 §195.452(c)(1)(i)(D) as stated here reflects the code language in place after November 25, 2005, during which time TBPL undertook casing assessments using GWUT. Page 3 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 4If the pipeline is: Then complete baseline assessments not later than the following date according to a schedule that prioritizes assessments: And assess at least 50 percent of the line pipe on an expedited basis. Beginning with the highest risk pipe, not later than: Category 1 Category 2 Category 3 March 31, 2008 February 17, 2009 Date the pipeline begins operation September 30, 2004 August 16, 2005 Not applicable TBPL failed to complete the baseline assessments before the required deadline. That is, failed to complete the baseline assessment of all line pipe in HCAs by February 17, 2009. TBPL is a Category 2 pipeline per §195.452(a). The regulations required operators of Category 2 pipelines to complete the baseline assessment of all line pipe in HCAs not later than February 17, 2009. It should be noted that TBPL classified all its pipeline segments as HCAs in August 2005 as stated in Section 4.0 of its IMP dated October 2005. TBPL did not complete the entire baseline assessment of all of its line pipe within HCAs by the required deadline; i.e. February 17, 2009. While TBPL used ECDA, GWUT, and pressure testing to assess its line pipe in HCAs, it did not assess all of the line pipe in HCAs because it did not assess all of the line pipe in vaults, all above ground line pipe, and all line pipe in casings. Prior to February 17, 2009, TBPL assessed the line pipe in some of its casings by GWUT. However, it did not fully assess the line pipe in casings labeled 2-5, 6-10, 6-11, 7-20, and 9-2. That is, due to the limitations of GWUT the entire length of the pipes within the casings was not assessed. The GWUT tool was run from only one end of the casings, which resulted in only a partial assessment of the pipe in the casings. After the February 17, 2009 deadline, TBPL continued to assess the pipe in casings that had not been assessed by either pressure testing or GWUT by using procedures based on PHMSA’s March 1, 2010 “Guidelines for Integrity Assessment of Cased Pipe Using ECDA.” TBPL used this process in CY 2010 and CY 2011 to assess line pipe in casings labeled 2-6, 2-7, 2-8, 3-1, 3-2, 3-4. 4-1, 4-2, 4-3, 6-1, 6-3, 6-4, 6-5, 6-7, 6-8, 6-9, 6-12, 6-13, 6-15, 6-16, 6-17, 7-1, 7-27-4, 7-6, 7-10, 7-11, 7-13, 7-28, and 11-2. At the time of the PHMSA inspection, the casings inspected in CY 2010 and 2011 did not include the five casings previously inspected by GWUT, which were incomplete because all the pipe in the casings was not assessed. Additionally, TBPL did not properly follow its procedures to identify and assess line pipe in vaults and above ground line pipe. 4. §195.452 Pipeline integrity management in high consequence areas. .... (k) What methods to measure program effectiveness must be used? An operator's program must include methods to measure whether the program is effective in assessing and evaluating the integrity of each pipeline segment and in protecting the high consequence areas. See Appendix C of this part for guidance on methods that can be used to evaluate a program's effectiveness. TBPL’s IMP did not include appropriate methods to measure whether the program was effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas; and, TBPL failed to perform annual IMP effectiveness reviews in 2008, 2009, and 2010 as required by its written IMP procedures. Page 4 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 5PHMSA regulations require TBPL to have methods to measure the effectiveness of its IMP in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas. TBPL’s IMP Section 12.0 Program Evaluation did not include appropriate methods to accomplish this task. Instead, it restated the guidance from PHMSA Protocol # 8.01 Program Evaluation: Process Approach, Protocol # 8.02 Program Evaluation: Performance Measures, and Protocol # 8.03 Program Evaluation: Communication of Evaluation Results; and, it required TBPL to complete an annual IMP evaluation using an outside consultant “ ... to adequately assess the integrity of the pipeline segments.” That is not the intent of the code, which is to evaluate the effectiveness of the program in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas. The IMP itself is what assesses and evaluates the integrity of each pipeline segment. Also, TBPL’s IMP Section 12.0 Program Evaluation stated that an audit was conducted on June 12 and 13, 2007, but there were no records or other evidence to show that a program effectiveness evaluation had been completed in subsequent years. 5. §195.452 Pipeline integrity management in high consequence areas. .... (l) What records must be kept? (1) An operator must maintain for review during an inspection: .... (ii) Documents to support the decisions and analyses, including any modifications, justifications, variances, deviations and determinations made, and actions taken, to implement and evaluate each element of the integrity management program listed in paragraph (f) of this section. TBPL did not properly document the decisions, analyses, and actions taken to implement and evaluate each element of its IMP. Specifically, TBPL failed to adequately document the analyses and decisions in the evaluations of: 1) TBPL’s leak detection capability, 2) if Emergency Flow Restricting Devices (EFRD) were needed on a pipeline segment to protect an HCA in the event of a hazardous liquid pipeline release, and 3) the selection of indirect inspection tools. TBPL’s IMP Section 10 states that TBPL conducted evaluations of its leak detection system and if EFRDs were needed on a pipeline segment, then briefly described what TBPL accomplished but the records were not adequate. But, the evaluation documentation did not reflect the analyses, decisions, and actions of TBPL in conducting the evaluations and acting on the decisions as were discussed with TBPL personnel during the inspection. Also, TBPL did not properly document the decisions, analyses, and actions taken to implement and evaluate each element of the integrity management program. Specifically, TBPL failed to adequately document analyses and decisions in the selection of indirect inspection tools during the ECDA Pre-Assessment. TBPL documented the selected indirect inspection tools for each ECDA segment on a Form D; Indirect Inspection Tool Selection. The form for each ECDA segment identifies the indirect inspection tools selected, but the analyses and decision basis is not documented. Page 5 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 6Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violations and has recommended that you be preliminarily assessed a civil penalty of $66,100 as follows: Item number PENALTY 1 $18,700 2 $18,700 3 $28,700 Proposed Compliance Order With respect to items 1, 2, 3, 4, and 5 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Tampa Bay Pipeline Co. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance 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). 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 a Final Order. In your correspondence on this matter, please refer to CPF 2-2012-6008 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Wayne T. Lemoi Director, Office of Pipeline Safety PHMSA Southern Region Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings Page 6 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 7PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to the Tampa Bay Pipeline Company (TBPL) a Compliance Order incorporating the following remedial requirements to ensure the compliance of Tampa Bay Pipeline Company. 1. In regard to Item Number 1 of the Notice pertaining to the failure of TBPL to properly account for its above ground pipe and pipe in vaults during the External Corrosion Direct Assessment (ECDA), TBPL must perform the appropriate ECDA steps per its procedures to identify the pipe and assign it to appropriate ECDA Region(s). 2. In regard to Item Number 2 of the Notice pertaining to the failure of TBPL to assess all the line pipe in casings 2-5, 6-10, 6-11, 7-20, and 9-2, TBPL must assess all the line pipe in the casings. 3. In regard to Item Number 3 of the Notice pertaining to the failure of TBPL to assess 100% of its line pipe in High Consequence Areas (HCA) by the required deadline, TBPL must identify and assess all the line pipe in HCAs not previously assessed that was required to have been assessed by February 17, 2009. 4. In regard to Item Number 4 of the Notice pertaining to the failure of TBPL to include appropriate methods to measure whether its Integrity Management Program was effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas and perform the review, TBPL must develop appropriate measures to evaluate the effectiveness of its Integrity Management Program and perform the effectiveness review. The effectiveness review must be performed by an independent third party, qualified by education and experience, in integrity management and ECDA. 5. In regard to Item Number 5 of the Notice pertaining to the failure of TBPL to adequately document the analyses and decisions in the evaluations of: 1) TBPL’s leak detection capability, and 2) if Emergency Flow Restricting Devices (EFRD) are needed on a pipeline segment to protect an HCA in the event of a hazardous liquid pipeline release, TBPL must prepare adequate documentation of the analyses and decisions in TBPLs’ evaluations of: 1) TBPL’s leak detection capability, and 2) if Emergency Flow Restricting Devices (EFRD) are needed on a pipeline segment to protect an HCA in the event of a hazardous liquid pipeline release. 6. In regards to Compliance Order Items 1 & 5, TBPL must complete these items within 30 days following receipt of the Final Order and must provide to the Director, Office of Pipeline Safety, PHMSA Southern Region, within 45 days following receipt of the Final Order, written documentation confirming the items have been completed. 7. In regards to Compliance Order Items 2, 3 & 4, TBPL should complete these items within 30 days following receipt of the Final Order and provide to the Director, Office of Pipeline Safety, PHMSA Southern Region, within 45 days following receipt of the Final Order, written documentation confirming the items have been completed. Or, Page 7 of 8#

220126008_NOPV PCP PCO_05092012_text.pdf, page 8In regards to Compliance Order Items 2, 3 & 4, if TBPL is unable to complete these items within 30 days following receipt of the Final Order then a. Within 30 days following receipt of the Final Order, TBPL must provide the Director, Office of Pipeline Safety, PHMSA Southern Region a written, fact based, explanation as to why these items could not be completed within 30 days. b. Within 30 days following receipt of the Final Order, TBPL must provide the Director, Office of Pipeline Safety, PHMSA Southern Region a written plan to accomplish Compliance Order Items 2, 3 & 4 in accordance with the time frames listed below. The written plan must include the assessment method or methods TBPL will use to assess the line pipe and the method and measures TBPL will use to measure whether its Integrity Management Program is effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas, c. Within 120 days following receipt of the Final Order, TBPL must have an independent third party, qualified by education and experience in integrity management and ECDA, complete the effectiveness review required by Compliance Order Item 4 above. d. Within 150 days following receipt of the Final Order, TBPL must complete the assessment of the line pipe required by Compliance Order Items 2 and 3 above. e. Within 170 days following receipt of the Final Order, TBPL must provide to the Director, Office of Pipeline Safety, PHMSA Southern Region written documentation confirming that Compliance Order Items 2, 3 & 4 have been completed. f. Within 170 days following receipt of the Final Order, TBPL must make the records and documentation showing the completion of Compliance Order Items 2, 3 and 4 available for inspection by PHMSA representatives. 8. It is requested (not mandated) that TBPL maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director, Office of Pipeline Safety, PHMSA Southern Region. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. Page 8 of 8#

220126008_Final Order_09142012_text.pdf, page 1Official PDFSEPTEMBER 14, 2012 Mr. Robert L. Rose President Tampa Bay Pipeline Company 5802 Hartford Street Tampa, FL 33619 Re: CPF No. 2-2012-6008 Dear Mr. Rose: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $66,100, and specifies actions that need to be taken by Tampa Bay Pipeline Company to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the compliance order completed, as determined by the Director, Southern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Wayne T. Lemoi, Director Southern Region, PHMSA Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

220126008_Final Order_09142012_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 ) Tampa Bay Pipeline Company, ) CPF No. 2-2012-6008 ) ) ) Respondent. ) ____________________________________) FINAL ORDER On September 12-16, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the Integrity Management Plan (IMP) of Tampa Bay Pipeline Company (TBPL or Respondent) in Tampa, Florida. Respondent operates approximately 100 miles of pipeline transporting anhydrous ammonia, a highly volatile liquid (HVL), and approximately 10 miles of hazardous liquid pipeline transporting refined petroleum products, all within the State of Florida.1 As a result of the inspection, the Director, Southern Region, OPS (Director), issued to Respondent, by letter dated May 9, 2012, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that TBPL had violated 49 C.F.R. §§ 195.452(c)(1)(i)(C), 195.452(c)(1)(i)(D), 195.452(d)(1), 195.452(k), and 195.452(l)(1)(ii), and proposed assessing a civil penalty of $66,100 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. Respondent failed to respond within 30 days of receipt of service of the Notice. Under 49 C.F.R. § 190.209(c), such failure to respond constitutes a waiver of TBPL’s right to contest the allegations in the Notice and authorizes the Associate Administrator, without further notice, to find facts as alleged in the Notice and to issue this Final Order under § 190.213. In this case, the Notice was mailed to Respondent by certified mail (USPS Article No. 7008 1830 0003 0751 0494) on May 9, 2012 and was received by Respondent on May 11, 2012, as shown by the return 1 According to Articles of Merger filed with the Secretary of State of the State of Florida, Tampa Pipeline Limited Partnership merged with Tampa Pipeline Corporation on or around September 30, 2001. Tampa Pipeline Corporation and its related companies operate pipelines providing jet fuel to various airports: St. Louis Pipeline Corporation (St. Louis Pipeline); Illinois Petroleum Supply Corporation (Illinois Petroleum Supply); Illinois Pipeline Corporation (Illinois Pipeline); Idaho Pipeline Corporation (Idaho Pipeline); Tampa Airport Corporation (Tampa Airport Pipeline); San Antonio Pipeline Corporation (San Antonio Pipeline); and Pipelines of Puerto Rico, Inc. (San Juan Pipeline). http://www.sunbiz.org/corioff html (last accessed 7/24/2012)#

220126008_Final Order_09142012_text.pdf, page 32 receipt on file with PHMSA. Furthermore, on June 19, 2012, representatives from Tampa Pipeline Corporation, parent company of TBPL met with staff engineers in the Southern Region, OPS, discussed the Notice and reminded Respondent of its right to submit a written response to the Notice.2 Later, the Southern Region, OPS contacted TBPL by telephone to remind the Respondent of its right to respond. To date, Respondent has not responded to the Notice. Under such circumstances, I find it reasonable and appropriate to enter this Final Order without further proceedings.3 FINDINGS OF VIOLATION TBPL did not contest the allegations in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(C), which states: § 195.452 Pipeline integrity management in high consequence areas. (a) … (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. The methods an operator selects to assess low frequency electric resistance welded pipe or lap welded pipe susceptible to longitudinal seam failure must be capable of assessing seam integrity and of detecting corrosion and deformation anomalies. (A) … (C) Other technology that the operator demonstrates can provide an equivalent understanding of the condition of the line pipe. An operator choosing this option must notify the Office of Pipeline Safety (OPS) 90 days before conducting the assessment, by sending a notice to the address or facsimile number specified in paragraph (m) of this section. 4 The Notice alleged that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(C) by failing to properly assess the integrity of its line pipe using other technology, External Corrosion Direct Assessment (ECDA) to perform its baseline assessment. Specifically, the Notice alleged that, 2 49 C.F.R.§ 190.209, Response options. 3 In the Matter of Tampa Pipeline Corporation, Final Order (CPF No. 2-2008-6002) (April 26, 2010), 2010 WL 6531627, (D.O.T.), August 27, 2010; See also, In the Matter of Tampa Bay Pipeline Corporation, Final Order (CPF No. 2-2005-6012 (Dec. 1, 2006), 2008 WL 902910 (D.O.T.), March 31, 2008. PHMSA final orders are generally accessible on the agency’s website, available at http://primis.phmsa.dot.gov/comm/reports/enforce/Actions. 4 49 C.F.R. § 195.452(C) (as revised in 67 Fed. Reg. 1660, 1661 (Jan. 14, 2002)), reflects the code language in effect when EDCA was considered “Other Technology” and at the time TBPL initiated its baseline assessment using ECDA.#

220126008_Final Order_09142012_text.pdf, page 43 after Respondent notified PHMSA of its intent to use other technology5 , TBPL failed to properly assess the integrity of all above ground pipe and all pipe in vaults by not performing each step of the ECDA Pre-Assessment, which included the ECDA Feasibility Assessment, Selection of Indirect Inspection Tools, and Identification of ECDA Regions.6 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(C) by failing to properly assess the integrity of its above ground pipe and pipe in vaults. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(D), which states in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (a) ... (c) What must be in the baseline assessment plan? (1) An operator must include each of the following elements in its written baseline assessment plan: (i) The methods selected to assess the integrity of the line pipe. An operator must assess the integrity of the line pipe by any of the following methods. The methods an operator selects to assess low frequency electric resistance welded pipe or lap welded pipe susceptible to longitudinal seam failure must be capable of assessing seam integrity and of detecting corrosion and deformation anomalies. (A) ... (D) Other technology that the operator demonstrates can provide an equivalent understanding of the condition of the line pipe. An operator choosing this option must notify the Office of Pipeline Safety (OPS) 90 days before conducting the assessment, by sending a notice to the address or facsimile number specified in paragraph (m) of this section.7 The Notice alleged that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(D) by failing to properly assess the integrity of its line pipe in casings using, other technology, Guided Wave Ultrasonic Testing (GWUT) to perform its baseline assessment. Specifically, the Notice alleged that TBPL did not assess its entire line pipe in several casings because the inspection range of the 5 Respondent notified the agency, by fax received on July 25, 2005, of its intent to use other assessment technology that at a minimum followed American Society of Mechanical Engineers (ASME), ASME B31.8S-2004, “Managing System Integrity of Gas Pipelines” and the National Association of Corrosion Engineers (NACE), NACE International Standard Practice, SP0502-2002, External Corrosion Direct Assessment. See Pipeline Safety Violation Report (Violation Report) dated May 9, 2012 at 44, Exhibit B. 6 Violation Report at 3 and Exhibits A and B. 7 §195.452(c)(l )(i)(D) (as revised in 70 Fed. Reg. 61576 (Oct. 25, 2005) designating paragraph (c)(1)(i)(C) as (c)(1)(i)(D)). This is also the code language in effect at the time TBPL undertook casing assessments using GWUT.#

220126008_Final Order_09142012_text.pdf, page 54 GWUT was less than the total length of the pipe in the casings, as indicated in the chart below: 2-5 South side of 22nd St. - ½ mile W. Sagasta 40-feet 36-feet Casing Location Length of Pipe in Casing GWUT Inspection Range Retaining Pond on Fishhawk Blvd. 1st casing W of CR 640 6-10 Keysville Rd @ CR 640 68-feet 53-feet 6-11 Bypass across CR 640@ County Line Rd 72-feet 42-feet 7-20 50-feet 27-feet 9-2 Nichols Rd & Anderson Rd 65-feet 43-feet Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(c)(1)(i)(D) by failing to properly assess the integrity of its line pipe in several casings. Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(d)(1), which states in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (a) ... (d) When must operators complete baseline assessments? Operators must complete baseline assessments as follows: (1) Time periods. Complete assessments before the following deadlines: If the pipeline is: Then complete baseline assessments not later than the following date according to a schedule that prioritizes assessments: And assess at least 50 percent of the line pipe on an expedited basis, beginning with the highest risk pipe, not later than: Category 1……... March 31, 2008……………………………… September 30, 2004. Category 2……... February 17, 2009…………………………… August 16, 2005. Category 3……... Date the pipeline begins operation…………... Not applicable. The Notice alleged that Respondent violated 49 C.F.R. § 195.452(d)(1) by failing to complete its baseline assessment of all line pipe in HCAs by the February 17, 2009 deadline. Specifically, the Notice alleged that TBPL identified its entire pipeline as being in an HCA8 and used ECDA, 8 An HCA is defined as: (1) a commercially navigable waterway, which means a waterway where a substantial likelihood of commercial navigation exists; (2) a high population area, which means an urbanized area, as defined and delineated by the Census Bureau, that contains 50,000 or more people and has a population density of at least 1,000 people per square mile; (3) an other populated area, which means a place, as defined and delineated by the Census Bureau, that contains a concentrated population, such as an incorporated or unincorporated city, town, village, or other designated residential or commercial area; and (4) an unusually sensitive area, as defined in § 195.6. 49 C.F.R. § 195.450.#

220126008_Final Order_09142012_text.pdf, page 65 GWUT, and pressure testing to assess the integrity of its line pipe but failed to complete its assessment by the February 17, 2009 deadline. While Respondent used EDCA, GWUT and pressure testing to assess its line, TBPL failed to assess all of the line pipe in vaults, above ground line pipe, and line pipe in casings. As of the date of the inspection, TBPL exceeded the deadline to assess the integrity of its line by 986 days.9 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(d)(1) by failing to complete its baseline assessment of all line pipe in HCAs by the February 17, 2009 deadline. Item 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(k), which states: § 195.452 Pipeline integrity management in high consequence areas. (k) What methods to measure program effectiveness must be used? An operator’s program must include methods to measure whether the program is effective in assessing and evaluating the integrity of each pipeline segment and in protecting the high consequence areas. See Appendix C of this part for guidance on methods that can be used to evaluate a program’s effectiveness. The Notice alleged that Respondent violated 49 C.F.R. § 195.452(k) by failing to have in its IMP methods to measure whether the program was effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas (HCAs). Specifically, the Notice alleged that TBPL failed to include in its IMP, Section 2.0, Program Evaluation, methods to measure whether the program was effective in assessing and evaluating the integrity of each pipeline segment and in protecting HCAs. PHMSA asserted that, in the absence of methods to measure the effectiveness of its program, Respondent’s IMP required a third party to perform an annual IMP evaluation and restated PHMSA’s Protocol# 8.01 Program Evaluation: Process Approach; Protocol# 8.02 Program Evaluation: Performance Measures; and Protocol # 8.03 Program Evaluation: Communication of Evaluation Results. During PHMSA’s inspection, TBPL did not demonstrate that it had performed an effectiveness evaluation of its IMP program. Respondent did not contest this allegation of violation. TBPL’s reliance on a third party to perform an effectiveness evaluation of its IMP program does not negate its responsibility to have an IMP that assesses and evaluates the integrity of each pipeline segment. To find otherwise would permit pipeline operators to shield themselves from their obligation to comply with the Pipeline Safety Laws simply by contracting out their functions. Mimicking or simply repeating PHMSA’s guidance does not demonstrate compliance, as it does not take into account the unique circumstances of TBPL’s particular system. There is no evidence that the company had performed an effectiveness evaluation of its IMP program. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(k) by failing to include 9 Violation Report at 17 and Exhibits A, B, and C.#

220126008_Final Order_09142012_text.pdf, page 76 in its IMP program methods to measure whether the program was effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii), which states in relevant part: § 195.452 Pipeline integrity management in high consequence areas. (l) What records must be kept? (1) An operator must maintain for review during an inspection: (i) ... (ii) Documents to support the decisions and analyses, including any modifications, justifications, variances, deviations and determinations made, and actions taken, to implement and evaluate each element of the integrity management program listed in paragraph (f) of this section. The Notice alleged that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii) by failing to maintain proper documentation of the decisions and analyses, including any modifications, justifications, variances, deviations and determinations made, and actions taken, to implement and evaluate each element of its IMP. Specifically, the Notice alleged that TBPL failed to properly document its analyses and decisions in the evaluation of its leak detection capability, need for Emergency Flow Restricting Devices (EFRD), and selection of indirect inspection tools during its ECDA Pre-Assessment, as required by TBPL’s IMP, Section 10. 10 During its inspection, PHMSA found that the Indirect Inspection Tool-Form D documents provided by Respondent showed the tools it selected; however, none of the documents explained or supported the basis for TBPL’s decisions, analyses, and actions. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(l)(1)(ii) by failing to maintain for review documents supporting the decisions, analyses, and actions taken in evaluation of its leak detection capability, need for Emergency Flow Restricting Devices on a pipeline segment in a HCA, and selection of indirect inspection tools. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil 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. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the ASSESSMENT OF PENALTY 10 Violation Report at Exhibit A.#

220126008_Final Order_09142012_text.pdf, page 87 degree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $66,100 for the violations cited above. Item 1: The Notice proposed a civil penalty of $18,700 for Respondent’s violation of 49 C.F.R. § 195.452(c)(1)(i)(C), for failing to properly assess the integrity of its above ground pipe and pipe in vaults using External Corrosion Direct Assessment to perform its baseline assessment. TBPL failed to properly assess the integrity of all above ground pipe and all pipe in vaults by not performing each step of the ECDA Pre-Assessment, which included the ECDA Feasibility Assessment, Selection of Indirect Inspection Tools, and Identification of ECDA Regions. TBPL neither contested the allegation nor presented any evidence or argument justifying a reduction or elimination of the proposed penalty. In terms of culpability, Respondent’s senior management knew or should have known of its responsibility to meet the various requirements of its own IMP. Accordingly, havingreviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $18,700 for violation of 49 C.F.R. § 195.452(c)(1)(i)(C). Item 2: The Notice proposed a civil penalty of $18,700 for Respondent’s violation of 49 C.F.R. § 195.452(c)(1)(i)(D), for failing to properly assess the integrity of its line pipe in several casings using Guided Wave Ultrasonic Testing (GWUT), as the inspection range of GWUT was less than the total length of the pipe in the casings. Although the company’s IMP required multiple GWUT “shots” if the inspection range was less than the total length of the pipe inside the casing, Respondent failed to do so. TBPL neither contested the allegation nor presented any evidence or argument justifying a reduction or elimination of the proposed penalty. Under § 195.452(c), an operator must assess its pipeline by one of several methods specified in the regulation. An operator’s failure to sufficiently assess the integrity of its process and to analyze the potential effects of pipeline failures on HCAs leaves it unprepared to address the severity and extent of the consequences that ensue following a failure. A release or failure under such circumstances increases the risk of harm to the public and the environment. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $18,700 for violation of 49 C.F.R. § 195.452(c)(1)(i)(D). Item 3: The Notice proposed a civil penalty of $28,700 for Respondent’s violation of 49 C.F.R. § 195.452(d)(1), for failing to complete its baseline assessment of all line pipe in HCAs by the February 17, 2009 deadline. TBPL neither contested the allegation nor presented any evidence or argument justifying a reduction or elimination of the proposed penalty. Failure to identify when a pipeline is subject to the integrity management program rules presents a risk to the safety of the public and environment in the most critical areas, because the operator may not adhere to the more stringent standards imposed by the integrity management regulations for that pipeline. Operators were required, under §195.452, to complete baseline assessments for Category 2 pipelines by February 17, 2009. Respondent is fully culpable. More than two years after this date, when OPS conducted its inspection, TBPL still had not completed this basic task. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $28,700 for violation of 49 C.F.R. § 195.452(d)(1).#

220126008_Final Order_09142012_text.pdf, page 98 In summary, having reviewed the record and considered the assessment criteria for each of the Items cited above, I assess Respondent a total civil penalty of $66,100. Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893. Failure to pay the $66,100 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those same authorities, 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 appropriate action in a district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1, 2, 3, 4 and 5 in the Notice for violations of 49 C.F.R. §§ 195.452(c)(1)(i)(C), 195.452(c)(1)(i)(D), 195.452(d)(1), 195.452(k), and 195.452(l)(1)(ii), respectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.452(c)(1)(i)(C), (Item 1), Respondent must properly assess its above ground pipe and pipe in vaults during the External Corrosion Direct Assessment, perform the appropriate ECDA steps, in accordance with TBPL’s procedures, and identify the pipe and assign it to appropriate ECDA Region(s). 2. With respect to the violation of § 195.452(c)(1)(i)(D), (Item 2), Respondent must assess all the line pipe in the casings. 3. With respect to the violation of § 195.452(d)(1), (Item 3), Respondent must identify and assess all the line pipe in HCAs not previously assessed and that was required to have been assessed by February 17, 2009. 4. With respect to the violation of § 195.452(k), (Item 4), Respondent must develop appropriate measures to evaluate the effectiveness of its Integrity Management Program and perform the effectiveness review. The effectiveness review must be#

220126008_Final Order_09142012_text.pdf, page 109 performed by an independent third party, qualified by education and experience, in integrity management and ECDA. 5. With respect to the violation of § 195.452(l)(1)(ii), (Item 5), Respondent must prepare adequate documentation of the analyses and decisions in TBPLs’ evaluations of: 1) TBPL’s leak detection capability, and 2) if Emergency Flow Restricting Devices are needed on a pipeline segment to protect an HCA in the event of a hazardous liquid pipeline release. 6. TBPL must complete all of the items within 30 days following receipt of the Final Order and must provide to the Director, Office of Pipeline Safety, PHMSA Southern Region, within 45 days following receipt of the Final Order, written documentation confirming the items have been completed. 7. Alternatively, if TBPL is unable to complete these items within 30 days following receipt of the Final Order, Respondent must: a. Within 30 days following receipt of this Final Order, provide the Director, Office of Pipeline Safety, PHMSA Southern Region a written, fact based, explanation why these items could not be completed within 30 days; b. Develop and submit a written plan to the Director that specifies the actions Respondent will take to complete Items 2, 3, and 4, including the assessment method or methods TBPL will use to assess the line pipe. The plan must also include the method and measures TBPL will use to determine whether its Integrity Management Program is effective in assessing and evaluating the integrity of each pipeline segment and in protecting high consequence areas. The written plan must be submitted within 30 days following receipt of this Final Order. c. Engage an independent third party, qualified by education and experience in integrity management and ECDA, to perform and complete the effectiveness review in accordance with Item 4 above. The effectiveness review must be completed within120 days following receipt of this Final Order. d. Complete the assessment of TBPL’s line pipe, in accordance with compliance Items 2 and 3. The assessment must be completed within 150 days following receipt of this Final Order. e. Submit written documentation confirming completion of Items 2-4 to the Director, Office of Pipeline Safety, PHMSA Southern Region, within 170 days following receipt of this Final Order. f. Make available for PHMSA’s inspection all records and documentation showing completion of Items 2-4, within 170 days following receipt of this Final Order.#

220126008_Final Order_09142012_text.pdf, page 1110 8. It is requested (not mandated) that TBPL maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director, Office of Pipeline Safety, PHMSA Southern Region. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 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 $100,000 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. § 190.215, Respondent has a right to submit a Petition for Reconsideration of this Final Order. The petition must be sent to: 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. PHMSA will accept petitions received no later than 20 days after receipt of service of this Final Order by the Respondent, provided they contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all other terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#