VECTREN ENERGY DELIVERY OF OHIO — Notice of Amendment

party submissionOfficial PDF320075017M_Operator Response to notice letter_06152007.pdf#

320075017M_Notice of Amendment_05212007.pdf, page 1Official PDFp U.S. Deportrnent of Tronsportofion Pipelin€ ond Hozoldous llqteriols Sofety Adminislrqtlon 901 Locusl Street, Suite 462 Kansas City, MO 64106-2641 NOTICE OF AMENDMENT qERTIFIED MAIL. RETURN RECEIPT REOUESTED N.Ity21,2007 Mr. Rick Schach Vice President Vectren Energy Delivery 2l I NW Riv'erside Drive Evansville, IN 47711 cPF 3-2007-5017M Dear Mr. Schach: On January 29 through February 2,20OT,representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA) Central Region and the Public Utilities Commission of Ohio pursuant to Chapter 601 of 49 United States Code inspected the procedures for ernergency response, operation and maintenance, and operator qualification in Dayton, OH. On the basis of the inspection, PHMSA has identified apparent inadequacies found within Vectren's plans or procedures, as described below: 1. $f 95.402 Procedural manual for operations, mrintenance, and emergencies. $f 95.402(a) requires that each operator shall prepare and follow for each pipeline system a manual of written procedures for conducting normal operations and maintenance activities and handling abnormal operations and emergencies. $f95.402(c) indicates that the manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations:#

320075017M_Notice of Amendment_05212007.pdf, page 2(3) Operating maintaining and repairing the pipetine system in aecordance with each of the requirements of this subpart and subpart H of this part. Review of the Operation and Maintenance (O&M) procedures found that the following requirernenh were not adequately covered in the procedures or needed to be expanded to provide additional guidance to your personnel: a) $195.402(e)(2) - Procedural manual for operations, maintenance, and emergencies. Vectren's Emergency Response Plan does not adequately define a propane emergency. b) S195.402 (eX?) - Procedural manual for operationso maintenance, and emergencies. Vectren's Propane Facilities Standards Manual Section 3.03 Page 9 indicates that Vectren will coordinate with fire, police, and other appropriate public officials preplanned responses to emergencies but does not indicate how often these contacts will be made. c) $195.403(c) - Emergency Response Training. Vectren's Propane Facilities Standards Manual does not state how Vectren will verify supervisor knowledge of Emergency Procedures. d) $195.aa2(c)(ii) - Damage Prevention Program Vectren's Propane Facilities Standards Manual does not indicate a leak survey will be conducted after blasting. e) gf95.567(c) - Which pipelines must have test leads and what must I do to install and maintain the leads? Vectren's Procedures do not state defective cathodic protection test leads will be repaired by at least the next inspection cycle. $195.571 Whrt criteria must I use to determine the adequacy of cathodic protection? Vectren's Propane Facilities Standards Manual Section 3.03 Page 4 references NACE RPOl69 but does not specifically state that -0.850 v IR considered or 100 mv decay criteria will be used to determine the adequacy of cathodic protection.#

320075017M_Notice of Amendment_05212007.pdf, page 3g) h) j) $195.5?3(a)(2) - What must I do to monitor external corrosion control? Vectren's Propane Pipeline Procedures do not identiff the circumstances in which a close-interval survey or comparable technology is practicable and necessary to accomplish the objectives of paragraph 10.1.1.3 of NACE Standard RP0l69. $195.573 What must I do to monitor external corrosion control? Vectren's procedures do not indicate that cathodic protection deficiencies will be repaired by at least the next inspection cycle. $195.575(a) - Which facilities must I electrically isolate and what inspections' tests, and safeguards are required? Vectren's Operation and Maintenance Manual do not detail the casing cathodic protection examination and mitigation program. S195.583(c) - What must I do to monitor atmospheric corrosion control? Vectren's procedures do not indicate that atmospheric corrosion deficiencies will be repaired by at least the next inspection cycle. 2. $195.402(c) - Maintenance and normal operations - The manual required by paragraph (a) of this section must include procedures for operating maintaining, and repairing the pipeline system in accordance rvith each of the requirements of this subpart and subpart H of this part. Additionalty, $f95.422(b) requires that no operator may use any pipe, valve, or fitting for replacement in repairing pipeline facilitieso unless it is designed and constructed as required by this part Review of your O&M procedures found that the following procedures need to be added to the O&M manual to address repairs to your pipeline facilities. a) Sf 95.226 Welding: Arc burns. Vectren's Welding Procedure Manual does not indicate that all arc burns are unacceptable on propane piping and must be repaired or removed. b) S195.302 General requiremenh. Vectren's Propane Facilities Standards Manual Section 3.02 should be expanded to include the statement "tested without leakage".#

320075017M_Notice of Amendment_05212007.pdf, page 4c) $r95.310(b)(10) Records. Vectren's Propane Facilities Standards Manual did not specify how and where temperah.ue measurements are recorded during a hydro-test. 3. $f95.505 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) Identify covered tasks; (b) Ensure through evaluation that individuals performing covered tasks are qualified; Vectren's Operator Qualification Program did not ensure that personnel performing covered tasks on the propane pipeline are qualified. Vectren's program requires amendment to ensure that all covered tasks associated with the operation of a propane pipeline are included. Since Vectren is both a natural gas supplier and a propane pipeline operator, Vecffen has natural gas facilities and natural gas customers in the vicinity of the propane pipeline. As a result of responding to a public hydrocarbon odor complaint, Vectren may inadvertently utilize natural gas pipeline employees for leak response and investigations on the propane pipeline. The natural gas leak response employees are not operator qualified to recognize and respond to a propane emergency. Vectren has determined that all areas of the propane pipeline require an immediate response. Therefore, under Vecffen's present systern, Vectren could send an unqualified employee to a propane pipeline emergency' Response to this Notice This Notice is provided pursuant to 49 U.S.C. $ 60108(a) and49 C.F.R. $ 190.237. Enclosed as part of this Notice is a document entitled Resporne Optionsfor 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. 4#

320075017M_Notice of Amendment_05212007.pdf, page 5If, after opportunity for a hearing, your plans or procedures are found inadequate as alleged in this Noticg you may be ordered to amend your plans or procedures to correct the inadequaciei (+g C.F.n. g 190.237). If you are not contesting this Notice, we propose that yor.r rub-it your amended procedures to my office within 90 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. In correspondence concerning this matter, please refer to CPF 3-2007-501?M and, for each document you submit, please provide a copy in elecffonic format whenevsr possible- Sincerely, \'J,"*-' Ivan A. Huntoon Director, Central Region Pipeline and Hazardous Materials Safety Administration Enclosure: Response Options for Pipeline Operators in Compliance Proceedings#

320075017M_Notice of Amendment_05212007.pdf, page 6Response Options for Pipetine Operators in Compliance Proceedings The requirements of 49 C.F.R. Part 190, Subpart B ($$ 190.201-190.237) govern response to Notices issued by a Regional Director, Pipeline andHaratdous Materials Safefy Administration GHMSA). Be advised that all material submitted by a respondent in response to an enforcement action is subject to being made publicly available. If you believe that any portion of your responsive maierial qgalifies 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 quatifi for confidential treatment redacted and an explanation of why you believe the redacted information quatifies for confidential teatrnent under 5 U'S.C. 552(b)' L Within 30 days of receipt of a Notice of Probable Violation, the respondent shall respond to the Regional Director who issued the Notice in the following way: \1h@ the Notice contains a proposed CIVIL PENALTY* - t. Pay the proposed civil penalty and advise the Regional Director of the puyt]l"ol This authorizes PHMSA to make findings and to close the case with prejudice to the respondent. Payment terms are outlined below; 2. Submit written explanations, information, or other materials in response to the allegations antof seek elimination or mitigation of the proposed civil penalty- Refer to 49 c.F.R. $ 190.225 for assessment considerations, which include the respondent's ability to pay and the effect on the respondent's abil.ity to stay in business, uPotr which civil penalties are based; or 3. Request a hearing as described below to contest the allegations and/or proposed assessment of a civil penalty. WhentheNotice contains q.p{.oposqd COMTLIANCE ORDER* - 1. Notiry the Regional Director that you intend to take the steps in the proposed compliance order; Z. Submit written explanations, information, or other materials in answer to the allegations in the Notice and object to or seek clarification of the proposed compliance order items in whole or in part; or 3. Request a hearing as described below to contest the allegations and/or proposed compliance order items; I of5#

320075017M_Notice of Amendment_05212007.pdf, page 7c. No written response is required. The respondent is warned that if it does not take appropriate action to correct these items, enforcement action will be taken if a subsequent inspection reveals a violation' * Failure of the respondent to respond to the Notice within 30 days of receipt constitutes a waiver of the right to contest the allegations in the Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order. il. m. Within 30 days of receipt of a Notice of Amendment, the respondent shall respond to the Regional Director who issued the Notice in the following way: a. Notiff the Regional Director of yourplans to address the inadequacies identified in the Notice; b. Submit written explanations, information, or other materials in answer to the allegations in the Notice and/or object to or seek clarification of the proposed amendment items in whole or in part; or c. Request a hearing as described betow to contest the allegations in the Notice. * Failure of the respondent to respond to the Notice within 30 days of reoeipt constitutes a waivei of the right to contest the allegations in the Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in the Notice without further notice to the respondent and to issue a Final Order' Procedure for Requesting a Heflfins A request for a hearing must be in writing and accompanied by a statement of the issues that the respondent intends to raise at the hearing. The issues may relate to the allegations, new information, or to the proposed compliance order or proposed civil penalty amount. Refer to 49 C.F.R. $ f 90.225 for assessment considerations upon which "i"it pl"aties are based. A respondent's failure to speciff an issue may result in waiver of the rigbt to raise that issue af the hearing. The respondent's request must also indicate whether or not respondent will be represented by counsel at the hearing. Failure to request a hearing in writing within 30 days of receipt of a Notice waives the right to a hearing. In additioru if the anount of the proposed civil penalty or the proposed co.rectire action is less than $10,000, the hearing will be held by telephone, unless the respondent submits a unitten request for an in-person hearing. Complete hearing procedures can be found at 49 C-F.R- $ 190-211- 2of5#

320075017M_Notice of Amendment_05212007.pdf, page 8ru. ErtensioB,s of Time ffi to prepare an appropriate response to a Notice may be granted, at the agency's discretion, following submittal of a written request to the R'egional Director. The requist must indicate the amount of time needed and the reasons for the extension. The request must be submitted within 30 days of receipt of the Notice.' V. VI. Freedom.pf Infonnation Act SA, including the violation report, the Notice, and any order issued in ttris case, and any material provided to PHMSA by the respondent, may be considered public information and subject to disclosure under the Freedom of Information A;t (FOIA). If the infomration you provide is security sensitive, privileged, confidential or may carlse your company competitive disadvantages, please clearly identiff the material and provide jrxtification why the documents, or portions of a document, should not be released under FOIA. If we receive a request for your material, we will notis you if PHMSA, after reviewing the matedals and your provided justification, determines that withholding the materials does not meet any exemption irovided under the FOIA. You may appeal the agency's decision to release material under the FOIA at that time. Your appeal will stay the release of those materials until a final decision is made. Smrll Business Regulatory Enforcement FairnessJlct l+formaf io+ I Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about federal agency enforcement actions. The Ombudsman will annually evaluate the enforcernent urtiuiti*r and rate each agency's responsiveness to small business. If you wishto comment on the enforcernent actions of the Pipetine and Hazardous Materials Safety Administration, call I-888-REG-FAIR (1-888-734-3247) or go to http :1/www. sba. gov/ombudsman/dsp-faq.html - 3 of 5#

320075017M_Notice of Amendment_05212007.pdf, page 9VII. PAYMENT INSTRUCTIONS Civil Penatly Paymene of Less Than $10,000 Payment of a civil penalty of less than $10,000 proposed or assessed, under Subpart B of Part 190 of the Pipeline Safety Regulations can be made by certified check, money order or wire transfer. Payment by certified check or money order (containing the CPF Number for this case) should be made payable to the "Department of Transportation" and should be sent to: F ederal Aviation Administration Mike Monroney Aeronautical Center Financial Operations Division (AMZ-300) P.O' Box 25082 Oklahoma City, OK 73125-4915 Wire transfer payments of less than $10,000 may be made through the Federal Reserve Communications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions conceming wire transfer should be directed to the Financial Operations Division at (405) 954-8893, or at the above address. Civil Penalty Payments of $10,000 ot mrne Payment of a civil penalty of $10,000 or more proposed or assessed under Subpart B of Part 190 ofihe Pipeline Safity Regulations (nust be made wire transfer (49 C.F.R. $ 89.21(bX3)), through tlre nederal Reserve Communications System (Fedwire) to the account of the U.S. Treasury. Detailed instructions are provided below. Questions conceming wire transfers should be directed to the Financial Operations Division at (405) 954-8893, or at the above address' INSTRUCTIONS FOR ELECTRONIC FUND TRANSFERS (r) REQEI_VER ABA NO. 021030004 (2) TYPE/SUB-TYPE (Provided by sending bank) (3) SENpING BANK ABANO. @rovided by sending bank) (4) SENDING BANK REF NQ., (Provided by sending bank) (s) AMOT.JNT (6) SENDING BANK NAME (Provided by sending bank) (7) RECETVER NAME TREAS NYC (8) PRO_pUCT CODE (Normally CTR, or as provided by sending bank) (9) BENEFICIAL GliF) = AGENCY LOCATION CODE BNF: /ALC-69-14-0001 (10) REASONS I'pR PAYMENT Example: PHMSA - CPF # / Ticket Number/Pipeline Assessment nurnber 4 of 5#

320075017M_Notice of Amendment_05212007.pdf, page 10INSTRUCTIONS: You, as sender of the wire transfer, must provide the sending bank with the information for blocks (l), (5), (7), (9), and (10). The information provided in Blocks (1), (7)' and (9) are constant and remain th" same for all wire transfers to the Pipeline and Hazardous Materials Safety Administration, Department of Transportation. Block #l - RECETVER ABA NO. - "021030004". Ensure the sending bank enters this 9-digit identification number; it represents the routing symbol for the U.S. Treasury at the Federal Reserve Bank in New York. Block #5 - AMOTJNT - You as the sender provide the amount of the transfer. Please be sure the t*ttf* r-ount is punctuated with commas and a decimal point. EXAMPLE: $10.000.00 Block #7 - RECEIVERNAME - "TREAS NYC". Ensure the sending bank enters this ibbreviation. It must be used for all wire ffansfers to the Treasury Department. BlopF#9 - BENEFICIA.L - AGENCY LOCATION CODE - "BNF=/ALC-69-14-0001". Ensure frffi-dtg bank enters this information. This is the Agency Location Code forthe Pipeline and HazardouJMaterials Safety Administration, Department of Transportation. Block t!.0_- REASON FOR PAYMENT - *AC-payment for PHMSA Case # / To ensure your wire transf* is credited properly, enter the case numberhicket number or Pipeline Assessment number, and counfry." NOTE: A wire transfer must comply with the format and instructions or the Deparbnent cannot ilep-mr wire transfer. you as thi sender can assist this process by notiffing the Financial Opeiations Division (405) 954-3893 at the time you send the wire bansfer. February 2007 5 of 5#