FERRELLGAS — Notice of Probable Violation

party submissionOfficial PDF320190001_Operator Response to Notice_07102019.pdf#

320190001_Closure Letter_10022020_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: JordanBurns@ferrellgas.com and rufusyoungblood@Ferrellgas.com October 2, 2020 Jordan Burns Vice President - Legal Ferrellgas One Liberty Plaza Liberty, MO 64068 RE: CPF 3-2019-0001 Dear Mr. Burns: On August 7-9, 2018, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected your liquid propane gas distribution facilities in northern Wisconsin. As a result of the inspection, the Director, Central Region, OPS issued a Notice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order on April 29, 2019. On April 6, 2020, PHMSA issued a Final Order which made findings of violation, assessed a civil penalty and ordered Ferrellgas to take certain compliance measures. The records show that Ferrellgas has paid the civil penalty, in addition to submitting records of determining the maximum allowable operating pressure of its systems and the relieving capacity of its relief devices or changing the overpressure protection to monitor regulators. My staff has reviewed these documents and determined that the terms of the Compliance Order have been met. The case is now closed. Thank you for your cooperation in this matter. Sincerely, Gregory A. Ochs Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration cc. Rufus Youngblood, Director Safety, Ferrellgas, rufusyoungblood@Ferrellgas.com#

320190001_NOPV PCP PCO_04292019_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED April 29, 2019 Jordan Burns Vice President - Legal Ferrellgas One Liberty Plaza Liberty, MO 64068 CPF 3-2019-0001 Dear Mr. Burns: On August 7-9, 2018, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected your liquid propane gas distribution facilities in northern Wisconsin. As a result of the inspection, it is alleged that you have committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected and the probable violation(s) are:#

320190001_NOPV PCP PCO_04292019_text.pdf, page 21. §192.285 Plastic pipe: Qualifying persons to make joints (a) No person may make a plastic pipe joint unless that person has been qualified under the applicable joining procedure by: (c) A person must be re-qualified under an applicable procedure once each calendar year at intervals not exceeding 15 months, or after any production joint is found unacceptable by testing under §192.513. Ferrellgas did not re-qualify one person in 2015 under the applicable plastic joint procedure once each calendar year at intervals not exceeding 15 months. The individual made pipe joints in 2015, but had not been qualified by making specimen joints for inspection and testing as required by the regulation and their procedures. 2. §192.513 Test requirements for plastic pipelines. (a) Each segment of a plastic pipeline must be tested in accordance with this section. (c) The test pressure must be at least 150 percent of the maximum operating pressure or 50 p.s.i. (345 kPa) gage, whichever is greater. However, the maximum test pressure may not be more than three times the pressure determined under §192.121, at a temperature not less than the pipe temperature during the test. Ferrillgas did not test its plastic pipelines to at least a pressure of 50 psig. Ferrellgas installed three (3) plastic service lines in 2017 and 2018 which were not pressure tested to at least 50 psig. The service locations, dates and pressures are: Address Date Test Pressure (psig) 7219 W. Courtland Circle, Egg Harbor, WI 5-5-2017 28 7192 Ida Red Rd., Egg Harbor, WI 7-19-2018 24 7300 McIntosh Way, Egg Harbor, WI 8-28-2017 24 3. §192.605 Procedural manual for operations, maintenance, and emergencies. (a) General. Each operator shall prepare and follow for each pipeline, a manual of written procedures for conducting operations and maintenance activities and for emergency response. For transmission lines, the manual must also include procedures for handling abnormal operations. This manual must be reviewed and updated by the operator at intervals not exceeding 15 months, but at least once 2#

320190001_NOPV PCP PCO_04292019_text.pdf, page 3each calendar year. This manual must be prepared before operations of a pipeline system commence. Appropriate parts of the manual must be kept at locations where operations and maintenance activities are conducted. Ferrellgas did not conduct annual reviews of its written procedures. Ferrellgas personnel informed PHMSA that it had not conducted annual reviews of its written procedures for the last two years. 4. §192.605 Procedural manual for operations, maintenance, and emergencies. (a) . . . . (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (8) Periodically reviewing the work done by operator personnel to determine the effectiveness, and adequacy of the procedures used in normal operation and maintenance and modifying the procedures when deficiencies are found. Ferrellgas did not periodically review the work done by operator personnel to determine the effectiveness and adequacy of the procedures in normal operations and maintenance. Ferrellgas informed PHMSA that these effectiveness reviews had not been conducted for the last two year. 5. §192.619 Maximum allowable operating pressure: Steel or plastic pipelines a) No person may operate a segment of steel or plastic pipeline at a pressure that exceeds a maximum allowable operating pressure determined under paragraph (c) or (d) of this section, or the lowest of the following: (1) The design pressure of the weakest element in the segment, determined in accordance with subparts C and D of this part. However, for steel pipe in pipelines being converted under §192.14 or uprated under subpart K of this part, if any variable necessary to determine the design pressure under the design formula (§192.105) is unknown, one of the following pressures is to be used as design pressure: Ferrellgas did not determine its maximum allowable operating pressure (MAOP) to be the design pressure of the weakest element of the segment. Ferrellgas stated that its MAOP in each system was 30 psig, but the PHMSA inspector found house service regulators having a maximum inlet pressure limit of 10 psig. This would restrict the MAOP to not be above 10 psig. 3#

320190001_NOPV PCP PCO_04292019_text.pdf, page 46. §192.603 General provisions. (a) . . . . (b) Each operator shall keep records necessary to administer the procedures established under §192.605. §192.605 Procedural manual for operations, maintenance, and emergencies. (a) . . . (b) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following, if applicable, to provide safety during maintenance and operations. (1) Operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and subpart M of this part. §192.741 Pressure limiting and regulating stations: Telemetering or recording gauges. (a) Each distribution system supplied by more than one district pressure regulating station must be equipped with telemetering or recording pressure gauges to indicate the gas pressure in the district. Ferrellgas did not keep records of recording pressure gauges for two multiple feed systems. The monthly pressure recording charts for the Horse Shoe Bay distribution system were not keep for August of 2016, October and February of 2017, and June of 2018. The same records for Heritage Lake distribution system were not kept for August and October of 2016, Febuary, April, May, and June of 2017, and March of 2018. 7. §192.743 Pressure limiting and regulating stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in §192.739(b), the capacity must be consistent with the pressure limits of §192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. (b) If review and calculations are used to determine if a device has sufficient capacity, the calculated capacity must be compared with the rated or experimentally determined relieving capacity of the device for the conditions under which it operates. After the initial calculations, subsequent calculations need not be made if the annual review documents that parameters have not changed to cause the rated or experimentally determined relieving capacity to be insufficient. 4#

320190001_NOPV PCP PCO_04292019_text.pdf, page 5Ferrellgas did not determine pressure relief capacity at intervals not exceeding 15 months, but at least each calendar year, by testing the devices in place or by review and calculations of the capacity of its regulator station relief devices. None of Ferrellgas’ nine (9) regulator stations had been tested in place or calculated capacities reviewed to determine if the relieving capacities were sufficient. Ferrellgas had no capacity design sheets for its regulator stations to even review. 8. §192.805 Qualification program. Each operator shall have and follow a written qualification program. The program shall include provisions to: (a) . . . . (b) Ensure through evaluation that individuals performing covered tasks are qualified; Ferrellgas did not ensure through evaluation that individuals performing covered tasks are qualified. The operator 2015 qualification records for one individual who performed 19 covered tasks had none of the proficiency (performance) evaluations completed, but all the written tests had been completed. The individual performed these tasks multiple times during the period from 2015 to 2018. His records for 2018 for all qualifications were complete. This individual was in charge of qualifying most of the staff. Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $213,268 per violation per day the violation persists, up to a maximum of $2,132,679 for a related series of violations. 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. For violations occurring prior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $19,600 as for Item 2. Warning Items With respect to item(s) 1, 3, 4, 6 and 8, 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 promptly correct these items. Failure to do so may result in additional enforcement action. 5#

320190001_NOPV PCP PCO_04292019_text.pdf, page 6Proposed Compliance Order With respect to item 5 and 7 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Ferrellgas. 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. All material you submit in response to this enforcement action may be 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). Following the receipt of this Notice, you have 30 days to submit written comments, or request a hearing under 49 CFR § 190.211. 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. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. This period may be extended by written request for good cause. In your correspondence on this matter, please refer to CPF 3-2019-0001 and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Allan C. Beshore Director, Central Region, OPS Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 6#

320190001_NOPV PCP PCO_04292019_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 FerrellGas a Compliance Order incorporating the following remedial requirements to ensure the compliance of Ferrellgas with the pipeline safety regulations: 1. 2. 3. 4. In regard to Item Number 5 of the Notice pertaining to determining pipeline maximum allowable operating pressure (MAOP), Ferrellgas must evaluate its pipelines and determine the MAOP according to §192.619 and document its findings for each of its systems. In regard to Item Number 7 of the Notice pertaining capacity of relief valves at regulator stations, Ferrellgas must determine if the reliefing capacity is sufficient by testing the devices in place or by capacity calculations of each station. Within 90 days after receipt of the Final Order FerrellGas must have completed Items 1 and 2 of the compliance order and sent the appropriate documentation to Allan Beshore, Director, Central Region, OPS. It is requested (not mandated) that Ferrellgas maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Allan C. Beshore, Director, Central Region, OPS, Pipeline and Hazardous Materials Safety Administration. 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. 7#

320190001_Final Order_04062020_text.pdf, page 1Official PDFVIA EMAIL TO: jamesferrell@ferrellgas.com, jordanburns@ferrellgas.com, and rufusyoungblood@ferrellgas.com Mr. James E. Ferrell Chairman, Interim Chief Executive Officer and President Ferrellgas Partners, LP One Liberty Plaza Liberty, Missouri 64068 Re: CPF No. 3-2019-0001 Dear Mr. Ferrell: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $19,600, and specifies actions that need to be taken by your subsidiary, Ferrellgas, LP, 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, Central Region, this enforcement action will be closed. Service of the Final Order by e-mail is effective upon the date of mailing as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Mr. Allan Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA Mr. Jordan Burns, Vice President and General Counsel, Ferrellgas Mr. Rufus Youngblood, Director Safety, Ferrellgas VIA EMAIL – CONFIRMATION OF RECEIPT REQUESTED#

320190001_Final Order_04062020_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 ) Ferrellgas, LP, ) CPF No. 3-2019-0001 a subsidiary of Ferrellgas Partners, LP, ) Respondent. ) ) ) ) ) FINAL ORDER From August 7, 2019, through August 9, 2019, 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 facilities and records of Ferrellgas, LP’s (Ferrellgas or Respondent) liquid propane distribution facilities in northern Wisconsin. Ferrellgas, a subsidiary of Ferrellgas Partners, LP,1 operates six small liquid propane distribution systems in Wisconsin.2 The systems are comprised of plastic mains, plastic services, and some copper lines supplied by underground and above-ground 1,000-gallon tanks.3 As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent, by letter dated April 29, 2019, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Ferrellgas had violated 49 C.F.R. §§ 192.513, 192.619, and 192.743, and proposed assessing a civil penalty of $19,600 for the alleged violation of § 192.513. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. The warning items required no further action, but warned the operator to correct the probable violations or face possible future enforcement action. Ferrellgas responded to the Notice by letter dated July 10, 2019 (Response). The company did not contest the allegations of violation of §§ 192.513 and 192.743 (Items 2 and 7, respectively), offered additional information in response to the allegation of violation of § 192.619 (Item 5), 1 Ferrellgas Partners, LP Form 10-K, available at https://ferrellgas.gcs-web.com/static-files/e9dc3d5d-7b17-4295- 9729-cc99c18488c4 (last accessed March 10, 2020). 2 Pipeline Safety Violation Report (Violation Report), (April 29, 2019) (on file with PHMSA), at 1 (on file with PHMSA). 3 Id.#

320190001_Final Order_04062020_text.pdf, page 3CPF 3-2019-0001 Page 2 and requested that the proposed civil penalty be reduced or eliminated for § 192.513 (Item 2). Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows: Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.513, which states, in relevant part: § 192.513 Test requirements for plastic pipelines. (a) Each segment of a plastic pipeline must be tested in accordance with this section. (b) …. (c) The test pressure must be at least 150 percent of the maximum operating pressure or 50 p.s.i. (345 kPa) gage, whichever is greater. However, the maximum test pressure may not be more than 3 times the pressure determined under § 192.121 at a temperature not less than the pipe temperature during the test. The Notice alleged that Respondent violated 49 C.F.R. § 192.513 by failing to test its plastic pipelines to a pressure of at least 50 psi. Specifically, the Notice alleged that Ferrellgas installed three plastic service lines in 2017 and 2018 that were not pressure tested to at least 50 psi. 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. § 192.513 by failing to test its plastic pipelines to a pressure of at least 50 psi. Item 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a), which states, in relevant part: § 192.619 Maximum allowable operating pressure: Steel or plastic pipelines. (a) No person may operate a segment of steel or plastic pipeline at a pressure that exceeds a maximum allowable operating pressure determined under paragraph (c) or (d) of this section, or the lowest of the following: (1) The design pressure of the weakest element in the segment, determined in accordance with subparts C and D of this part. However, for steel pipe in pipelines being converted under § 192.14 or uprated under subpart K of this part, if any variable necessary to determine the design pressure under the design formula (§ 192.105) is unknown, one of the following pressures is to be used as design pressure: …. The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1) by failing to determine its maximum allowable operating pressure (MAOP) in conformance with the design pressure of#

320190001_Final Order_04062020_text.pdf, page 4CPF 3-2019-0001 Page 3 the weakest element in the pipeline segment. Specifically, the Notice alleged that Ferrellgas’ procedures stated that its MAOP for each system was 30 psi, even though its house-service regulators have a maximum inlet pressure limit of 10 psi. Therefore, the Notice alleged that Ferrellgas’ MAOP should be not have exceeded 10 psi. In its Response, Ferrellgas stated that the MAOP in its Operations and Maintenance Manual (O&M Manual) is set at 30 psi because 30 psi is the limit for propane vapor in polyethylene (poly) pipe. Ferrellgas also stated that no further MAOP calculations were needed “because poly pipe used in the propane industry has a design pressure far above 30 psi.” Ferrellgas acknowledged nevertheless that the second-stage regulators used in its systems have a maximum inlet pressure of 10 psi.4 Section 192.619(a)(1) provides that no person may operate a segment of plastic pipeline at a pressure that exceeds the MAOP of the design pressure of the weakest element in the segment. Respondent’s second-stage regulators constitute a part of the pipeline segment and have a maximum inlet pressure of 10 psi. The design pressure of the poly pipe is therefore immaterial because the second-stage regulator is the weaker element on the pipeline segment. Consequently, the MAOP should not have exceeded 10 psi. Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R. § 192.619(a) by failing to determine its MAOP in conformance with the design pressure of the weakest element in the pipeline segment. Item 7: The Notice alleged that Respondent violated 49 C.F.R. § 192.743, which states, in relevant part: § 192.743 Pressure limiting and regulating stations: Capacity of relief devices. (a) Pressure relief devices at pressure limiting stations and pressure regulating stations must have sufficient capacity to protect the facilities to which they are connected. Except as provided in § 192.739(b), the capacity must be consistent with the pressure limits of § 192.201(a). This capacity must be determined at intervals not exceeding 15 months, but at least once each calendar year, by testing the devices in place or by review and calculations. (b) If review and calculations are used to determine if a device has sufficient capacity, the calculated capacity must be compared with the rated or experimentally determined relieving capacity of the device for the conditions under which it operates. After the initial calculations, subsequent calculations need not be made if the annual review documents that parameters have not changed to cause the rated or experimentally determined relieving capacity to be insufficient. . . . The Notice alleged that Respondent violated 49 C.F.R. § 192.743 by failing to determine the capacity of its regulator-station relief devices at intervals not exceeding 15 months, but at least 4 Response, at 4.#

320190001_Final Order_04062020_text.pdf, page 5CPF 3-2019-0001 Page 4 once each calendar year, by testing them in place or by review and calculations. Specifically, the Notice alleged that none of Ferrellgas’ nine regulator stations had been tested in place or by calculation to determine if the relieving capacities were sufficient. The Notice also alleged that Ferrellgas did not have any capacity-design sheets for its regulator stations available for the PHMSA inspector to review. 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. § 192.743 by failing to determine the capacity of its regulator-station relief devices at intervals not exceeding 15 months, but at least once each calendar year, by testing in place or by review and calculations. These findings of violation will be considered prior offenses]in any subsequent enforcement action taken against Respondent. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.5 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 degree of Respondent’s culpability; the history of Respondent’s prior offenses; 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 $19,600 for the violation of Item 2. Item 2: The Notice proposed a civil penalty of $19,600 for Respondent’s violation of 49 C.F.R. § 192.513, for failing to test its plastic pipelines to a pressure of 50 psi. In its Response, Ferrellgas explained that its employees had mistakenly tested the lines using the parameters found in NFPA 54 and 58, which have a lower minimum test pressure than those established in Part 192. Ferrellgas noted that it had re-tested all of the lines in accordance with its O&M Manual and that the new tests showed that the lines were safe and their integrity had not been compromised. In light of these mitigating factors, Ferrellgas requested that the proposed penalty be rescinded or reduced. While I acknowledge, and appreciate, Ferrellgas’ willingness to re-test its pipelines following the issuance of the Notice, I do not find that such corrective actions warrant the withdrawal or reduction of the civil penalty. Regarding the nature and circumstances of the violation, PHMSA noted in the Violation Report that the alleged violation related to a failure to perform a required activity and that the violation had been discovered by PHMSA or a State Partner. It is uncontested that Ferrellgas failed to test its plastic pipelines to a pressure of at least 50 psi and that PHMSA, rather than the company, had discovered the violation. 5 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.#

320190001_Final Order_04062020_text.pdf, page 6CPF 3-2019-0001 Page 5 Regarding gravity, PHMSA noted in the Violation Report that pipeline safety was minimally affected; therefore, the proposed civil penalty has already accounted for the fact that pipeline integrity was never compromised. Regarding culpability, Ferrellgas did not contest the violation and has thus acknowledged that it failed to comply with an applicable requirement of Part 192. Regarding good faith, Ferrellgas seeks a penalty reduction because its employees mistakenly used the wrong standard when testing the lines. Ferrellgas stated that in most other circumstances where these lines had been installed to serve a single customer from a stationary ASME tank, the test pressure used would have been acceptable under the codes that it uses for the safe installation and operation of propane systems. I am unconvinced that it would be appropriate to reduce a proposed penalty because an employee made a mistake or used the wrong standard while performing a safety task. On the contrary, pipeline operators are and should be expected to ensure that their personnel perform all safety- related tasks using the correct standards and procedures. As such, a reduction of the proposed civil penalty under the “good faith” standard is not warranted. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $19,600 for violation of 49 C.F.R. § 192.513. Failure to pay the $19,600 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 5 and 7 in the Notice for violations of 49 C.F.R. §§ 192.619 and 192.743, respectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas 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 § 192.619 (Item 5), Respondent must evaluate its pipelines and determine the MAOP according to § 192.619 and document its findings for each of its systems. 2. With respect to the violation of § 192.743 (Item 7), Respondent must determine if the relieving capacity of its regulator-station relief devices is sufficient by testing the devices in place or by capacity calculations of each station. 3. All documentation demonstrating compliance with items 1 and 2 of the#

320190001_Final Order_04062020_text.pdf, page 7CPF 3-2019-0001 Page 6 compliance order must be submitted to the Director, Central Region, Pipeline and Hazardous Safety Materials Administration, for review within 90 days of receipt of the Final Order. 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. It is requested (not mandated) that Respondent maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. 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. Failure to comply with this Order may result in the administrative assessment of civil penalties not to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), 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. WARNING ITEMS With respect to Items 1, 3, 4, 6 and 8, the Notice alleged probable violations of Part 192 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for the following: 49 C.F.R. § 192.285 (Item 1) ─ Respondent’s alleged failure to re-qualify a person under an applicable plastic joint procedure once each calendar year, with intervals not exceeding 15 months, in 2015. The individual made pipe joints in 2015, but had not been requalified by making specimen joints and testing them as required by the § 192.285 and Respondent’s own procedures. 49 C.F.R. § 192.605(a) (Item 3) ─ Respondent’s alleged failure to conduct an annual review of its written procedures. 49 C.F.R. § 192.605(b)(8) (Item 4) ─ Respondent’s alleged failure to periodically review the work done by its personnel to determine the effectiveness and adequacy of the procedures used in normal operations and maintenance. 49 C.F.R. § 192.603(b) (Item 6) ─ Respondent’s alleged failure to keep records of recording pressure gauges for two multiple feed systems. 49 C.F.R. § 192.805(b) (Item 8) ─ Respondent’s alleged failure to ensure through evaluation that individuals performing covered tasks were qualified.#

320190001_Final Order_04062020_text.pdf, page 8CPF 3-2019-0001 Page 7 Ferrellgas presented information in its Response showing that it had taken certain actions to address the cited items. If OPS finds a violation of any of these items in a subsequent inspection, Respondent may be subject to future enforcement action. Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final Order to the 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, no later than 20 days after receipt of service of this Final Order by Respondent. Any petition submitted must contain a statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty assessed. The other terms of the order, including corrective action, remain in effect unless the Associate Administrator, upon request, grants a stay. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. April 6, 2020 ___________________________________ __________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#