{"operation":"document","citation":"CPF 32022040NOPV","title":"ROCKIES EXPRESS PIPELINE LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-02-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.611(a)(1)(i).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022040nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022040nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022040nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32022040NOPV","body":"Notice of Probable Violation involving ROCKIES EXPRESS PIPELINE LLC. PHMSA's enforcement data identifies the cited regulation as 192.611(a)(1)(i). The case was opened on 2022-02-17 and is reported as closed as of 2023-12-15. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32022040NOPV_Closure Letter_12152023_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Closure%20Letter_12152023_(20-179276).pdf\n\n32022040NOPV_Closure Letter_12152023_(20-179276)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Closure%20Letter_12152023_(20-179276)_text.pdf\n\n32022040NOPV_Consent Agreement and Order_09122022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Consent%20Agreement%20and%20Order_09122022_(20-179276).pdf\n\n32022040NOPV_Consent Agreement and Order_09122022_(20-179276)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Consent%20Agreement%20and%20Order_09122022_(20-179276)_text.pdf\n\n32022040NOPV_Op Resp to Notice and Req for Hrng and Stmnt of Issues (Part 1)_03182022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Op%20Resp%20to%20Notice%20and%20Req%20for%20Hrng%20and%20Stmnt%20of%20Issues%20(Part%201)_03182022_(20-179276).pdf\n\n32022040NOPV_Op Resp to Notice and Req for Hrng and Stmnt of Issues (Part 2)_03182022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Op%20Resp%20to%20Notice%20and%20Req%20for%20Hrng%20and%20Stmnt%20of%20Issues%20(Part%202)_03182022_(20-179276).pdf\n\n32022040NOPV_Operator Withdrawal of RfH_09132022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_Operator%20Withdrawal%20of%20RfH_09132022_(20-179276).pdf\n\n32022040NOPV_PCO_02172022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PCO_02172022_(20-179276).pdf\n\n32022040NOPV_PCO_02172022_(20-179276)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PCO_02172022_(20-179276)_text.pdf\n\n32022040NOPV_PHC Hearing Rescheduled_09012022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PHC%20Hearing%20Rescheduled_09012022_(20-179276).pdf\n\n32022040NOPV_PHC Hearing Rescheduled_09012022_(20-179276)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PHC%20Hearing%20Rescheduled_09012022_(20-179276)_text.pdf\n\n32022040NOPV_PHC Hearing Scheduled_06172022_(20-179276).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PHC%20Hearing%20Scheduled_06172022_(20-179276).pdf\n\n32022040NOPV_PHC Hearing Scheduled_06172022_(20-179276)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022040NOPV/32022040NOPV_PHC%20Hearing%20Scheduled_06172022_(20-179276)_text.pdf\n\n32022040NOPV_PHC Hearing Rescheduled_09012022_(20-179276)_text.pdf\n\nDate: September 1, 2022\nFrom: Larry White\nTo: File\nRe: Continuance of Hearing, Tallgrass Energy, LP\nCPF No. 3-2022-040-NOPV\nBy electronic mail dated August 12, 2022, Catherine Little, Counsel for Tallgrass Energy, LP and\nJoseph Hainline, Counsel for OPS Central Region, submitted a joint request for a continuance of the\nhearing previously scheduled for August 31, 2022. The request explained that the parties were\nmoving forward with negotiation of a consent agreement to resolve the case which would make a\nhearing unnecessary and the additional time was needed to conclude the negotiations.\nI granted the request for a continuance until September 14, 2022 which will be the new hearing date\nif resolution by consent agreement is not completed by that time.\n\n32022040NOPV_PHC Hearing Scheduled_06172022_(20-179276)_text.pdf\n\nJune 17, 2022\nVIA ELECTRONIC MAIL TO: catherine.little@troutman.com and gregory.ochs@dot.gov\nMs. Catherine D. Little, Esq.\nCounsel for Tallgrass Energy, LP\nTroutman Pepper, LLP\n600 Peachtree Street, NE, Suite 3000\nAtlanta, GA 30308\nMr. Gregory Ochs\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n901 Locust Street, Suite 480\nKansas City, MO 64106-2641\nRe: Notice of Hearing, Tallgrass Energy, LP\nCPF No. 3-2022-040-NOPV\nDear Ms. Little and Mr. Ochs:\nIn accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued by the Pipeline\nand Hazardous Materials Safety Administration in the above-referenced case. The hearing will take\nplace on August 31, 2022, beginning at 8:30 a.m. Central Time.\nThe hearing will be held via videoconference. I will provide the videoconference information prior\nto the hearing. At least 10 calendar days prior to the hearing (or by August 22, 2022), both parties\nmust submit and exchange any additional written materials they intend to present at the hearing and\nthe name and email address of each attendee. This information should be provided electronically.\nMaterials not submitted by this date may be excluded.\nIf you have any questions, please do not hesitate to contact me.\nSincerely,\nLarry White\nPresiding Official\n\n\n\ncc: CPF No. 3-2022-040-NOPV\nPage 2\nMr. William Moler, President and Chief Executive Officer, Tallgrass Interstate Gas\nTransmission, LLC, bill.moler@tallgrassenergylp.com\nMs. Jennifer Eckels, Manager – Compliance, Tallgrass Energy, LP,\njennifer.eckels@tallgrassenergylp.com\nMr. Joseph Hainline, Counsel, Central Region, Office of Pipeline Safety, PHMSA,\njoseph.hainline@dot.gov\n\n32022040NOPV_Closure Letter_12152023_(20-179276)_text.pdf\n\nVIA ELECTRONIC MAIL TO: crystal.heter@tallgrassenergylp.com;\nkale.stanton@tallgrass.com;\nDecember 15, 2023\nCrystal Heter\nChief Operating Officer\nTallgrass Energy, LP\n370 Van Gordon Street\nLakewood, CO 80228\nRE: CPF 3-2022-040-NOPV\nDear Ms. Heter:\nOn September 12, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued a Consent Order incorporating the terms of the Consent Agreement between PHMSA and\nTallgrass Energy, LP (Tallgrass) in the above-referenced case. This Order included a\nCompliance Order requirement for Tallgrass to take certain corrective actions on its pipeline.\nPer the terms of the Consent Agreement, the Consent Agreement would terminate if Tallgrass’\nSpecial Permit application, requested March 11, 2022, was approved. On October 3, 2023,\nPHMSA approved and issued the Special Permit, PHMSA Docket Number 2022-0044.\nAccordingly, the Consent Agreement is terminated, and this case is now closed. Thank you for\nyour cooperation in this matter.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\ncc: Kale Stanton (kale.stanton@tallgrass.com\n\n32022040NOPV_Operator Withdrawal of RfH_09132022_(20-179276).pdf\n\nBefore the\nU.S. Department of Transportation\nPipeline and Hazardous Materials Safety Administration\nOffice of Pipeline Safety\nWashington, D.C.\nIn the Matter of )\n) CPF No. 3-2022-040-NOPV\nTallgrass Energy, L.P. ) Notice of Probable Violation\nRespondent. )\n)\n)\n)\nNOTICE OF WITHDRAWAL OF REQUEST FOR HEARING\nThis notice is to advise that Tallgrass Energy, LP (Tallgrass) and the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA) Central Region have reached an agreement that\nresolves the above-referenced Notice of Probable Violation (NOPV). As a result, and as set forth\nin the Consent Order and Agreement issued by PHMSA on September 12, 2022, Tallgrass is,\nwithout admission, withdrawing its request for hearing.\nPHMSA issued the NOPV to Tallgrass on February 17, 2022, alleging a single violation relating\nto class location changes under 49 C.F.R. § 192.611 from Class 1 to Class 2. The NOPV included\na Proposed Compliance Order (PCO) requirement that sought to require Tallgrass to prepare a\nwork plan to lower the pressure of the Rockies Express Pipeline (REX) to ensure that the\ncorresponding hoop stress did not exceed 72% of the specified minimum yield strength (SMYS)\nin Class 2 locations. Tallgrass contested the alleged violation and requested a hearing, which was\nscheduled for September 14, 2022.\nThe NOPV relates to a special permit issued in 2006 that authorized portions of REX to operate at\n80% specified minimum yield strength (SMYS). Pipeline Safety: Grant of Waiver; Rockies\nExpress Pipeline, 71 Fed. Reg. 39141 (Jul. 11, 2006). As provided in its initial Response and\nRequest for Hearing, Tallgrass maintains that it properly operated the REX pipeline, including\nClass 1 locations which became Class 2 locations due to population changes over the past fourteen\nyears, at 80% SMYS pursuant to the terms of the 2006 special permit, and the “one-class bump”\nprovision under the federal pipeline safety regulations, 49 C.F.R. § 192.611. Throughout the\noperation of REX, both Tallgrass and the prior operator of REX expressly and consistently notified\nPHMSA that portions of the pipeline located in Class 2 locations operated up to 80% SMYS.\nTallgrass believes that PHMSA had acknowledged and approved Tallgrass’s operational practices\nand that these communications and the course of dealings, taken together, evidenced PHMSA’s\napproval of the Company’s operation of Class 2 locations pursuant to the “one-class bump”\nprovision.\nIn addition to its communications and course of dealings with Tallgrass, PHMSA has indicated\nthat it “was likely an oversight” that the 2006 REX special permit did not address instances where\nClass 1 locations changed to Class 2 locations and that “[s]ubsequent special permits (to other\n\n\n\nentities) now address this issue.” Letter to Tallgrass Energy, LP, from PHMSA (Sept. 24, 2021).\nWhen promulgating Alternative Maximum Allowable Operating Pressure (MAOP) regulations in\n2008, PHMSA initially failed to address the use of Alternative MAOP in the context of class\nlocation changes and commenters “noted that without addressing operation at alternative MAOP\nin [§ 192.611], the regulations would effectively rescind the authorization provided by this rule to\noperate at higher pressure whenever there was a change in class location.” Final Rule, Pipeline\nSafety: Standards for Increasing the Maximum Allowable Operating Pressure for Gas\nTransmission Pipelines, 73 Fed. Reg. 62148, 62169 (Oct. 17, 2008). In the Final Rule, PHMSA\nresponded by expressly reaffirming the use of the “one-class bump” allowance at 49 C.F.R. §§\n192.611 and 192.620(c)(8).\nTallgrass believes that it has operated Class 2 locations on the REX pipeline consistent with its\n2006 special permit and the “one-class bump” provision as recognized by PHMSA and the federal\npipeline safety regulations. In the spirit of cooperation and consistent with its commitment to\npipeline safety, Tallgrass nevertheless sought to resolve this action through informal settlement in\ncoordination with the PHMSA Central Region. Pursuant to those discussions, Tallgrass, without\nadmission and for purposes of settlement only, entered into a Consent Agreement with PHMSA to\nresolve this matter. As a result, and as required by the terms of the Consent Order and Agreement\nissued by PHMSA, the Company is hereby withdrawing its request for hearing.\nRespectfully submitted,\nBracewell, LLP\nCatherine Little, Esq.\nAnnie Cook, Esq.\n2001 M Street NW, Suite 900\nWashington, D.C.\n20036-3310\n(202) 828-5800\nCatherine.Little@Bracewell.com\nAnnie.Cook@Bracewell.com\nTallgrass Energy, LP\nNicole Longwell, Esq.\nAssociate General Counsel\n(303) 763-3401\nNicole.Longwell@Tallgrass.com\nDate: September 13, 2022\n2\n\n32022040NOPV_Op Resp to Notice and Req for Hrng and Stmnt of Issues (Part 2)_03182022_(20-179276).pdf\n\nBefore the U.S. Department of Transportation\nPipeline and Hazardous Materials Safety Administration\nOffice of Pipeline Safety\nWashington, D.C.\nIn the Matter of )\n) CPF No. 3-2022-040-NOPV\nTallgrass Energy, LP ) Notice of Probable Violation\n)\n)\nRespondent. )\n____________________________________)\nRequest for Hearing, Statement of Issues, and Response to NOPV\nI. Introduction\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) issued a\nNotice of Probable Violation (NOPV) and proposed compliance order (PCO) to Tallgrass Energy,\nLP (Tallgrass or the Company) on February 17, 2022. The NOPV alleged a single violation of 49\nC.F.R. § 192.611 related to class location changes and included a PCO, which would require\nTallgrass to prepare a work plan and schedule to lower the pressure of its Rockies Express Pipeline\n(REX) to ensure that the corresponding hoop stress does not exceed 72 percent of the specified\nminimum yield strength (SMYS) in Class 2 locations. As provided by 49 C.F.R. § 190.208,\nTallgrass has 30 days to respond to the allegations in the NOPV and, therefore, this response is\ntimely.\nThe NOPV was issued as a result of an inspection initiated in March 2020 by the PHMSA Central\nRegion. The allegations relate to a history of authorizations, exchanges, and coordination with\nPHMSA going back 16 years in connection with the operation of the REX pipeline and a special\npermit issued to REX by PHMSA in July 2006. Tallgrass is committed to maintaining the safe\noperation of its pipeline assets in compliance with the federal pipeline safety regulations, including\n49 C.F.R. § 192.611, and pursuant to the terms of the special permit issued in July 2006, as\naffirmed by PHMSA and in reliance upon those clarifications. For this reason, Tallgrass is\ncontesting the allegations in the NOPV and the PCO.\nAt the same time, and in coordination with PHMSA and without admission, Tallgrass has a\nsupplemental special permit application pending with PHMSA which would address the issue\nraised in the NOPV and more explicitly provide for the operation of the REX pipeline in Class 2\nlocations. Tallgrass took this step after lengthy discussions with PHMSA personnel over the past\nyear in an effort to resolve the class location change issue to PHMSA’s satisfaction.\nPursuant to 49 C.F.R. § 190.211, Tallgrass is filing this response to request an in-person hearing\nto address the factual and legal issues in the NOPV under 49 C.F.R. § 192.611 and the PCO. At a\n\n\n\nhearing, Tallgrass will be represented by in-house counsel as well as outside counsel with\nTroutman Pepper.\nII. Background\nREX is one of the largest natural gas pipelines in the U.S., stretching 1,700 miles between\nnorthwestern Colorado, Wyoming, and eastern Ohio. REX transports critical east-west bi-\ndirectional supply between the Rocky Mountain and Appalachian regions to serve energy markets\nacross the United States. As such, REX provides access to abundant natural gas sources in both\nbasins, increasing the reliability, security, and supply to many high demand centers and large end-\nusers with direct connections to power plants, local distribution companies, and industrial\nfacilities. Derating the REX pipeline, as proposed in the PCO, would have a direct negative impact\non critical natural gas supplies, reliability and energy security for major demand centers across the\ncountry.\nTallgrass is committed to the safe operation of the REX pipeline in compliance with the federal\npipeline safety regulations and the conditions in the special permit issued by PHMSA in July\n2006.1 The special permit was issued prior to construction of the REX pipeline and authorizes its\noperation at hoop stresses up to 80% SMYS in Class 1 locations and at a maximum allowable\noperating pressure (MAOP) of 1,480 psig. The special permit imposes a variety of integrity\nmeasures that exceed the federal pipeline safety standards, including increased construction and\ndesign measures, hydrostatic pressure testing, and increased integrity management requirements.\nThe special permit was the first issued by PHMSA of a series of special permits authorizing certain\npipelines to operate at 80% SMYS. These special permits were the basis for a rule change in 2008,\nallowing pipelines that comply with certain design, construction and operational requirements to\noperate at an alternate MAOP up to 80% SMYS.\nSince issuance of the special permit, approximately 3.52 miles of the REX pipeline (across various\nshort segments) have changed from Class 1 to Class 2 locations. Although the special permit does\nnot address class change locations specifically, the prior operator of the REX pipeline implemented\nthe “one class bump” provision as provided by 49 C.F.R. §§ 192.611(a) and 192.620(c)(8) to\ncontinue operating the Class 2 locations pursuant to the terms of the special permit and with\naffirmation from PHMSA in 2009. Both Tallgrass and the prior operator of the REX pipeline also\nprovided notice of this practice to PHMSA yearly through two separate annual reporting\nobligations (specified by the special permit and by the 49 C.F.R. Part 191 regulations) and in\ncorrespondence in 2014. Further, PHMSA has consistently recognized the use of the “one class\nbump” provision in its regulatory approach with respect to other existing special permits and its\npromulgation of the alternate MAOP regulations in 2008.\nIt was not until over a decade after PHMSA affirmed the practice in writing, that representatives\nof the Central Region assumed oversight of REX in January 2020 and inquired about Tallgrass’s\nreliance on the “one class bump” provision. Since that time, Tallgrass has been actively working\nwith PHMSA to provide more information about the operation of its pipeline under the special\npermit. To address the Agency’s concern and in coordination with PHMSA, Tallgrass has been,\n1 Pipeline Safety: Grant of Waiver; Rockies Express Pipeline, 71 Fed. Reg. 39,141 (Jul. 11, 2006).\n-2-\n\n\n\nwithout admission, working since March 2021 to prepare a supplemental special permit to more\nexpressly authorize the continued operation of applicable Class 2 locations on the REX pipeline at\n80% SMYS and an MAOP of 1,480 psig. The supplemental special permit application is pending\nas of the time of this filing.\nIII. Response to NOPV Item 1 (49 C.F.R. § 192.611) and PCO\nA. PHMSA NOPV Allegation\n§ 192.611 Change in class location: Confirmation or revision of maximum\nallowable operating pressure.\n(a) If the hoop stress corresponding to the established maximum\nallowable operating pressure of a segment of pipeline is not\ncommensurate with the present class location, and the segment is in\nsatisfactory physical condition, the maximum allowable operating\npressure of that segment of pipeline must be confirmed or revised\naccording to one of the following requirements:\n(1) If the segment involved has been previously tested in place for a\nperiod of not less than 8 hours:\n(i) The maximum allowable operating pressure is 0.8 times the test\npressure in Class 2 locations, 0.667 times the test pressure in Class 3\nlocations, or 0.555 times the test pressure in Class 4 locations. The\ncorresponding hoop stress may not exceed 72 percent of the SMYS of\nthe pipeline in Class 2 locations, 60 percent of SMYS in Class 3\nlocations, or 50 percent of SMYS in Class 4 locations.\nThe REX Pipeline has operated at a pressure that exceeds the maximum pressure allowed\nin a Class 2 location. The REX Pipeline is a 42-inch diameter pipeline that was permitted\nto operate up to 80 percent of SMYS in Class 1 locations only pursuant to a Special\nPermit. The maximum allowable operating pressure (MAOP) of the REX Pipeline in\nClass 1 locations is 1480 psig, which produces a potential impact radius (PIR) of at least\n1115 feet. REX failed to confirm or revise the MAOP for segments of the REX Pipeline\nin Class 2 locations to ensure that they were commensurate with the present class location.\nSpecifically, REX failed to ensure the corresponding hoop stress did not exceed 72\npercent of the specified minimum yield strength (SMYS) of the REX Pipeline in Class 2\nlocations. PHMSA reviewed the REX 2017-2019 Change Studies per §§ 192.609 and\n192.611, and SCADA alarm records. The records confirmed that the REX pipeline had\nbeen operating at above 72 percent SMYS in Class 2 locations. All of the pipeline\nsegments located in Class 2 locations that were operating at above 72 percent of SMYS\nwere previously tested in place for a period of not less than 8 hours. REX was not\noperating with an alternative MAOP under § 192.620 such that § 192.611(a)(ii) could\napply. As such, REX was required to limit its MAOP so that the corresponding hoop\nstress would not exceed 72 percent of SMYS of the pipe in Class 2 locations. The\n-3-\n\n\n\nfollowing 46 Class 2 locations were operated above 72 percent SMYS, in violation of the\nregulations, as identified in 2021:\n[. . .]\nAdditional segments may currently be operating in non-compliance, which must be\naddressed by Tallgrass or they could be the subject of a future enforcement action.\nB. Tallgrass Response\nTallgrass requests that NOPV Item 1 be withdrawn as a matter of fact and law. Tallgrass has and\ncontinues to operate the REX pipeline consistent with the terms of its special permit and the federal\npipeline safety regulations, as affirmed by PHMSA. Given that the special permit is silent\nregarding class location changes, and pursuant to prior direction and affirmation from PHMSA,\nboth the prior operator and Tallgrass provided notice to PHMSA of their reliance on the “one class\nbump” provision as provided in 49 C.F.R. §§ 192.611 and 192.620 to continue operating portions\nof the REX pipeline that changed to Class 2 locations pursuant to the terms of its special permit.\nIn addition, the prior operator and Tallgrass regularly notified the Agency of the operation of the\nREX line in Class 2 locations in accordance with the special permit through its special permit and\n49 C.F.R. Part 191 annual reporting obligations and expressly referred to this practice in a 2014\nletter to the Agency. In response and for over a decade, PHMSA acknowledged and authorized\nTallgrass’s operational practices in previous communications. Tallgrass has in good faith relied\non PHMSA’s prior representations and has operated the REX pipeline in accordance with those\nrepresentations. Moreover, Tallgrass’s application of the “one class bump” provision is consistent\nwith PHMSA’s representations and filings related to other similar special permits and PHMSA’s\npromulgation of the alternate MAOP regulations at 49 C.F.R. §§ 192.611 and 192.620.\nAs proposed, the PCO would require Tallgrass to lower the pressure of the REX pipeline in Class\n2 locations, without providing any other options for compliance, and would directly and negatively\nimpact commerce by reducing the availability, reliability, and security of supply to critical demand\ncenters across the country.\nFor these reasons, Tallgrass requests that the PCO be withdrawn because PHMSA cannot establish\nthat the Company committed a violation of 49 C.F.R. § 192.611.\nIV. Preliminary Statement of Issues\nA. Whether PHMSA is precluded from seeking this enforcement based on the\napplicable statute of limitations.\nB. Whether PHMSA should be equitably estopped from seeking enforcement against\nTallgrass, where the Agency previously approved of Tallgrass’s operation of\nsegments in Class 2 locations in compliance with its special permit and in\naccordance with the “one class bump” provision and Tallgrass’s operation of the\nClass 2 segments was consistent with PHMSA’s established regulatory practice.\n-4-\n\n\n\nC. D. E. F. G. H. Whether PHMSA is precluded from seeking this enforcement based on the\nequitable doctrines of laches or waiver, where the Agency previously approved of\nTallgrass’s operation of segments in Class 2 locations in compliance with the\nspecial permit and in accordance with the “one class bump” provision and\nTallgrass’s operation of the Class 2 segments was consistent with PHMSA’s\nestablished regulatory practice.\nWhether PHMSA has met its burden to prove by a preponderance of the evidence\nthat Tallgrass did not comply with requirements 49 C.F.R. §§ 192.611,\n192.620(c)(8) or the conditions of its existing special permit, as clarified by\nPHMSA’s representations.\nWhether PHMSA’s allegation of noncompliance is arbitrary and capricious, an\nabuse of discretion, or otherwise not in accordance with law in violation of the\nAdministrative Procedure Act, 5 U.S.C. § 706(2), constitutes disparate treatment of\nsimilarly situated parties without reasoned explanation and substantial evidence in\nthe record, and/or violates requirements of due process and fair notice.\nWhether the PCO associated with NOPV Item 1 should be withdrawn because there\nis no violation and/or in light of the pending supplemental special permit\napplication; or, in the alternative, whether the PCO should be modified to provide\nfor alternative means of compliance with the federal pipeline safety regulations.\nWhether PHMSA PCO would unduly burden interstate commerce or unreasonably\nimpact Tallgrass’s ability to comply with its contractual obligations related to\nprovision of gas.\nWhether the NOPV and PCO are consistent with PHMSA’s Pipeline Safety\nEnforcement Procedures policy manual with respect to fair, consistent, and timely\nenforcement.\nTallgrass reserves the right to supplement this statement of issues in response to any additional\nevidence and argument provided by PHMSA.\nV. Summary and Request for Relief\nFor all of the reasons identified above, and in consideration of other matters as justice may require,\nTallgrass respectfully requests that NOPV Item 1 and the PCO be withdrawn. In advance of the\nrequested hearing, and pursuant to 49 C.F.R. § 190.209, Tallgrass requests a copy of the complete\ncase file in this matter, beyond the Pipeline Safety Violation Report and its exhibits which have\nalready been provided.\nRespectfully submitted,\nTroutman Pepper, LLP\nCatherine D. Little, Esq.\n-5-\n\n\n\nAnnie M. Cook, Esq.\n600 Peachtree Street NE, Suite 3000\nAtlanta, GA 30308\n(404) 885-3000\nCatherine.Little@troutman.com\nAnnie.Cook@troutman.com\nTallgrass Energy, LP\nAssistant General Counsel\nNicole Longwell, Esq.\n(303) 763 3401\nNicole.longwell@tallgrassenergylp.com\nDate: March 18, 2022\n-6-\n\n32022040NOPV_Consent Agreement and Order_09122022_(20-179276)_text.pdf\n\nSeptember 12, 2022\nVIA ELECTRONIC MAIL TO: bill.moler@tallgrassenergylp.com\nWilliam Moler\nPresident and Chief Executive Officer\nTallgrass Energy, LP\n2400 W. 115th Street, Suite 350\nLeawood, KS 66211\nCPF 3-2022-040-NOPV\nDear Mr. Moler:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement\nbetween the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Rockies\nExpress Pipeline, LLC, a subsidiary of Tallgrass Energy, LP, which was executed on September\n8, 2022. Service of the Consent Order and Consent Agreement by electronic mail is deemed\neffective upon the date of transmission and acknowledgement of receipt, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nSincerely,\nAlan K Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosures: Consent Agreement and Consent Order\nCc: Mr. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Catherine Little, outside counsel for Tallgrass, catherine.little@troutman.com\nMs. Jennifer Eckels, Compliance Manager, Tallgrass, jennifer.eckels@tallgrass.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nRockies Express Pipeline, LLC, ) CPF No. 3-2022-040-NOPV\na subsidiary of Tallgrass Energy, LP, )\n)\nRespondent. )\n____________________________________)\nCONSENT ORDER\nBy letter dated February 17, 2022, the Pipeline and Hazardous Materials Safety Administration,\nOffice of Pipeline Safety (PHMSA), issued a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice) to Rockies Express Pipeline, LLC, a\nsubsidiary of Tallgrass Energy, LP (Respondent).\nIn response to the Notice, Respondent contested the allegation of violation and associated\nproposed compliance order for Item 1 and requested a hearing (Response). Respondent also\nasked for the opportunity to meet informally with PHMSA to discuss the issues it raised in its\nResponse. Respondent and PHMSA (the Parties) subsequently met on several occasions. As a\nresult of those discussions the Respondent agreed to a finding of violation, without admission to\nthe underlying facts, and to take certain corrective actions as detailed in the accompanying\nConsent Agreement.\nAccordingly, the Consent Agreement is hereby approved and incorporated by reference into this\nOrder. Tallgrass is hereby ordered to comply with the terms of the Consent Agreement, effective\nimmediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties as set forth in 49 C.F.R. § 190.223.\nThe terms and conditions of this Consent Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nSeptember 12, 2022\n_________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nRockies Express Pipeline, LLC )\na subsidiary of Tallgrass Energy, LP ) CPF No. 3-2022-040-NOPV\n)\nRespondent. )\n____________________________________)\nCONSENT AGREEMENT\nFrom March 2 through March 6, 2020, a representative of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code (U.S.C.), inspected the records of Rockies Express Pipeline, LLC (REX or\nRespondent), a subsidiary of Tallgrass Energy, LP, in Lakewood, Colorado. PHMSA also\nreviewed additional information provided by Respondent after March 6, 2020, as part of this\ninspection.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent\nby letter dated February 17, 2022, a Notice of Probable Violation and Proposed Compliance\nOrder (Notice). In accordance with 49 C.F.R. § 190.207, the Notice alleged that Respondent\ncommitted a probable violation of 49 C.F.R. part 192 and proposed ordering Respondent to take\ncertain measures to correct the alleged violation.\nIn response to the Notice, Respondent contested the allegation of violation, requested a hearing,\nand asked for the opportunity to meet informally with PHMSA to discuss the alleged violation\n(Response). The allegation relates to operation of certain pipeline segments on REX covered by\na special permit issued by PHMSA in 2006 and the course of dealing and exchange of\ninformation between PHMSA and REX (the Parties) under that special permit.\nThe Parties subsequently met to discuss the allegation of violation. As a result of those\ndiscussions and as explained in more detail below, PHMSA has agreed to certain factual\nclarifications associated with the allegation of violation and Respondent, without admission, has\nagreed to withdraw its hearing request and accept the finding of violation as alleged in the\nNotice, subject to the clarifications as set forth below, and to undertake certain corrective\nmeasures.\nHaving agreed that settlement of this enforcement action will avoid further administrative\nproceedings or litigation and will serve the public interest by promoting safety and protection of\n\n\n\nthe environment, pursuant to 49 C.F.R. part 190, and upon consent and agreement of Respondent\nand PHMSA, the Parties hereby agree as follows:\nI. General Provisions\n1. Respondent acknowledges that as the operator of the pipeline facilities subject to\nthe Notice, Respondent and its referenced gas pipeline facilities are subject to the jurisdiction of\nthe Federal pipeline safety laws, 49 U.S.C. § 60101, et seq., and the regulations and\nadministrative orders issued thereunder. For purposes of this Agreement, Respondent\nacknowledges that it received proper notice of PHMSA’s action in this proceeding and that the\nNotice states claims upon which relief may be granted pursuant to 49 U.S.C. § 60101, et seq.,\nand the regulations and orders issued thereunder.\n2. After Respondent returns this signed Agreement to PHMSA, the Agency’s\nrepresentative will present it to the Associate Administrator for Pipeline Safety, recommending\nthat the Associate Administrator adopt the terms of this Agreement by issuing an administrative\norder (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement\nconstitute an offer of settlement until accepted by the Associate Administrator. Once accepted,\nthe Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.\n3. Respondent consents to the issuance of the Consent Order, and hereby waives\nany further procedural requirements with respect to its issuance. Respondent waives all rights\nto contest the adequacy of notice, or the validity of the Consent Order or this Agreement,\nincluding all rights to administrative or judicial hearings or appeals, except as set forth herein.\n4. This Agreement shall apply to and be binding upon PHMSA and Respondent, its\nofficers, directors, and employees, and its successors, assigns, or other entities or persons otherwise\nbound by law. Respondent agrees to provide a copy of this Agreement and any incorporated work\nplans and schedules to all of Respondent’s officers, employees, and agents whose duties might\nreasonably include compliance with this Agreement.\n5. This Agreement constitutes the final, complete and exclusive agreement and\nunderstanding between the Parties with respect to the settlement embodied in this Agreement.\nThe Parties acknowledge that there are no representations, agreements or understandings\nrelating to settlement other than those expressly contained in this Agreement, except that the\nterms of this Agreement may be construed by reference to the Notice.\n6. Nothing in this Agreement affects or relieves Respondent of its responsibility to\ncomply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,\net seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters\nPHMSA’s right of access, entry, inspection, and information gathering or PHMSA’s authority to\nbring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the\nregulations and orders issued thereunder, or any other provision of Federal or State law.\n7. For all transfers of ownership or operating responsibility of Respondent’s pipeline\nsystem referenced herein, Respondent will provide a copy of this Agreement to the prospective\n\n\n\ntransferee at least 30 days prior to such transfer. Respondent will provide written notice of the\ntransfer to the PHMSA Central Regional Director no later than 60 days after the transfer occurs.\n8. This Agreement does not waive or modify any Federal, State, or local laws or\nregulations that are applicable to Respondent’s pipeline systems. This Agreement is not a\npermit, or a modification of any permit, under any Federal, State, or local laws or regulations.\nRespondent remains responsible for achieving and maintaining compliance with all applicable\nFederal, State, and local laws, regulations and permits.\n9. This Agreement does not create rights in, or grant any cause of action to, any\nthird party not party to this Agreement. The U.S. Department of Transportation is not liable for\nany injuries or damages to persons or property arising from acts or omissions of Respondent or\nits officers, employees, or agents carrying out the work required by this Agreement.\nRespondent agrees to hold harmless the U.S. Department of Transportation, its officers,\nemployees, agents, and representatives from any and all causes of action arising from any acts\nor omissions of Respondent or its contractors in carrying out any work required by this\nAgreement.\n10. Respondent neither admits nor denies any allegation or conclusion in the Notice\nor this Agreement but agrees for purposes of this Agreement to comply with the terms of this\nAgreement.\n11. Upon issuance of the Consent Order, the Parties agree to the following terms.\nII. Finding of Violation\n12. Item 1: 49 C.F.R. § 192.611(a)(1)(i): The Notice alleged Respondent failed to\nconfirm or revise the maximum allowable operating pressure (MAOP) for segments of REX in\ncertain Class 2 locations to ensure that they were commensurate with the present class location.\nSpecifically, the Notice alleged that Respondent failed to ensure the corresponding hoop stress\ndid not exceed 72 percent of the specified minimum yield strength (SMYS) of REX in certain\nClass 2 locations. In its Response, Respondent contested the allegation of violation in its\nentirety. Respondent holds an existing special permit that was issued by PHMSA in 2006\nwhich, in relevant part, authorizes REX to operate up to 80% SMYS in Class 1 locations. The\nspecial permit does not address changes in class location. Since placing the pipeline into\nservice, the prior operator of REX and Respondent provided periodic updates to PHMSA with\nupdates regarding class location changes and operating pressure. Respondent maintains that\ncommunications and course of dealings between Respondent and PHMSA about operation of\ncertain segments of REX at 80% SMYS in Class 2 locations, which are subject to the special\npermit conditions, evidenced approval of such operating conditions. PHMSA maintains that it\nnever approved operation of the special permit segments above 72% SMYS in areas other than\nClass 1 locations as set forth in the special permit conditions. Upon further discussions between\nthe Parties, Respondent, without admission and for purposes of settlement, has agreed to accept\na finding of violation and withdraw its hearing request upon execution of this Agreement. As\nsuch, PHMSA finds a violation of 49 C.F.R. § 192.611(a)(1)(i).\n\n\n\n13. Item 1 will be considered by PHMSA as a prior offense in any future PHMSA\nenforcement action taken against Respondent for the 5-year period following the Effective Date\nof this Agreement.\nIII. Special Permit Application and Limitations\n14. The Notice proposed certain compliance order actions to address the non-\ncompliance alleged in Item 1. As a result of the Parties’ informal discussions, the Parties have\nagreed to the following:\nA. Respondent has, without admission, applied for a supplemental class location special\npermit (Special Permit application) under 49 C.F.R. § 190.341 for certain pipeline\nsegments in Class 2 locations to allow for continued operation above 72% SMYS,\nincluding the very same segments in the Notice. The public comment period for this\nSpecial Permit application ended on June 27, 2022. See 87 Fed. Reg. 32233 (May 27,\n2022); PHMSA Docket No. 2022-0044.\nB. If approved, the proposed Special Permit conditions shall apply, and this Agreement\nwill terminate.\nC. Unless or until the Special Permit application is approved by PHMSA, Respondent\nwill proceed to comply with the obligations set forth below in Paragraph 15, except\nfor Paragraph 15.B. If the Special Permit application is denied by PHMSA or\nwithdrawn by Respondent, Respondent shall also proceed with the obligations\nspecified in Paragraph 15.B.\nD. Respondent reserves the right to seek additional special permits or pursue conversion\nto alternative MAOP per 49 C.F.R. § 192.620.\nIV. Compliance Plan\n15. In regard to Item 1 of the Notice, Respondent shall perform the following\nactions, subject to the limitations set forth in Paragraph 14, applicable to the areas identified in\nthe Notice operating above 72% SMYS in Class 2 locations:\nA. Intermediate Actions Until the Grant or Denial of the Special Permit.\ni. Work Plan. Within 45 days of the Effective Date of this Agreement,\nRespondent will prepare and submit for Director approval a Work Pla","truncated":true,"body_characters":53398}