ENABLE GAS TRANSMISSION, LLC — Notice of Probable Violation

420091001_FinalOrder_11062009_text.pdf, page 1Official PDFNOV 6 2009 Mr. Walter Ferguson Senior Vice President of Operations and Engineering CenterPoint Energy Gas Transmission Company 1111 Louisiana, Suite 1100 Houston, TX 77002 Re: CPF 4-2009-1001 Dear Mr. Ferguson: Enclosed is the Final Order issued in the above-referenced case. It makes a finding of violation and assesses a civil penalty. I acknowledge receipt of and accept your wire transfer for $18,800 as payment in full of the civil penalty assessed in the Final Order. The Final Order also acknowledges your completion of the actions necessary to comply with the pipeline safety regulations. This case is now closed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. R. M. Seeley, Director, Southwest Region, PHMSA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2464 5676]#

420091001_FinalOrder_11062009_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 ) ) CenterPoint Energy Gas ) CPF No. 4-2009-1001 Transmission Company, ) ) Respondent. ) ____________________________________) FINAL ORDER During the months of January through December 2008, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) reviewed incident reports filed by CenterPoint Energy Gas Transmission Company (CenterPoint or Respondent) related to certain pipeline incidents, including an incident that occurred on December 28, 2007, near Mountainburg, Arkansas. As a result of that review, the Director, Southwest Region, OPS (Director), issued to Respondent, by letter dated January 26, 2009, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had violated 49 C.F.R. § 191.15 and proposed assessing a civil penalty of $18,800 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. CenterPoint operates over 6,000 miles of natural gas pipelines located primarily in Arkansas, Oklahoma, and Louisiana. The company responded to the Notice on March 10, 2009, by submitting a wire transfer in the amount of the proposed civil penalty ($18,800), waiving further right to respond and authorizing the entry of this Final Order. FINDING OF VIOLATION Item 1 in the Notice alleged that Respondent violated 49 C.F.R. § 191.15, which states: § 191.15 Transmission and gathering systems: Incident report. (a) Except as provided in paragraph (c) of this section, each operator of a transmission or a gathering pipeline system shall submit Department of Transportation Form RSPA F 7100.2 as soon as practicable but not more than 30 days after detection of an incident required to be reported under §191.5.#

420091001_FinalOrder_11062009_text.pdf, page 32 (b) Where additional related information is obtained after a report is submitted under paragraph (a) of this section, the operator shall make a supplemental report as soon as practicable with a clear reference by date and subject to the original report. (c) The incident report required by paragraph (a) of this section need not be submitted with respect to LNG facilities. The Notice alleged that Respondent violated § 191.15(b) by failing to make a supplemental report as soon as practicable after obtaining additional information related to a pipeline incident for which it had filed an incident report. Specifically, the Notice alleged that CenterPoint filed an incident report for the Mountainburg incident on January 28, 2008, listing the apparent cause of the failure as “Unknown” pending the results of a metallurgical analysis. PHMSA received a copy of the final metallurgical analysis in April 2008, and the Agency made several requests in May, June, and October 2008 that CenterPoint file a supplemental report. PHMSA also notified the company that it needed to update and finalize four other incident reports dating back to 2004. As of December 2008, Respondent had not submitted supplemental reports for these incidents. Accordingly, I find Respondent violated 49 C.F.R. § 191.15(b), by failing to make a supplemental report as soon as practicable after obtaining additional information related to a pipeline incident for which it had filed an incident report. This finding of violation will be considered a prior offense 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 $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations. 49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of the civil penalty, I 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; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. Having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $18,800, already paid by Respondent.#

420091001_FinalOrder_11062009_text.pdf, page 43 COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to the violation of 49 C.F.R. § 191.15. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a gas pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director has indicated that Respondent satisfactorily completed the actions specified in the Proposed Compliance Order by filing supplemental reports for the five incidents dating back to 2004, including the pipeline incident on December 28, 2007, near Mountainburg, Arkansas. Accordingly, since compliance has been achieved with respect to this violation, there is no need to include compliance terms in this Order. The terms and conditions of this Final Order shall be effective upon receipt. ______________________________ ___________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

420091001_NOPV PCP PCO_01262009_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED January 26, 2009 Mr. Walter Ferguson Senior Vice President and Chief Operations Officer Centerpoint Energy Gas Transmission 1111 Louisiana, Suite 1100 Houston, TX 77002 CPF 4-2009-1001 Dear Mr. Ferguson: A representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code has reviewed the Centerpoint Energy Gas Transmission (Centerpoint) 7100.2 report for the Mountainburg, AR incident originally filed on January 28, 2008. As a result of the review, it appears that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items reviewed and the probable violation are: 1. 191.15 Transmission and gathering systems: Incident report. (a) Except as provided in paragraph (c) of this section, each operator of a transmission or a gathering pipeline system shall submit Department of Transportation Form RSPA F 7100.2 as soon as practicable but not more than 30 days after detection of an incident required to be reported under §191.5.#

420091001_NOPV PCP PCO_01262009_text.pdf, page 2(b) Where additional related information is obtained after a report is submitted under paragraph (a) of this section, the operator shall make a supplemental report as soon as practicable with a clear reference by date and subject to the original report. Centerpoint failed to make a supplemental report for the Mountainburg, AR incident as soon as practicable after the final metallurgical report was obtained that provided information on the probable cause of failure. Centerpoint filed the original report for the Mountainburg, AR incident on January 28, 2008, and was assigned a report number of 20080008. The cause of the failure on the incident report was stated to be unknown pending the results of a metallurgical analysis. PHMSA requested and received a copy of the final metallurgical report for the failed pipe segment on April 15, 2008. On May 8, 2008 PHMSA requested Centerpoint update the RSPA 7100.2 Mountainburg, AR incident report to include the additional information contained in the final metallurgical analysis as required by §191.15. PHMSA placed a telephone call to Centerpoint on June 25, 2008, and left a message again requesting Centerpoint update the Mountainburg, AR incident report. PHMSA then issued a letter requesting Centerpoint update and finalize five incident reports dating back to 2004, including the Mountainburg, AR incident report number 20080008. The other incident reports included in this letter were report numbers 20040051, 20050080, 20050108, and 20080035. PHMSA then held a teleconference on October 14, 2008 with representatives of Centerpoint to discuss several recent incidents that had occurred in Arkansas and Texas. The Mountainburg, AR incident report was discussed in this meeting and PHMSA again requested the incident report be updated with the cause of failure. As of December 2, 2008, a supplemental report updating the cause of failure had still not been filed by Centerpoint despite the final metallurgical analysis being received by Centerpoint on April 15, 2008 and multiple requests by PHMSA for the operator to comply with the requirements of 49 CFR 191.15. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation(s) and has recommended that you be preliminarily assessed a civil penalty of $18,800 as follows: Item number PENALTY 1 $ 18,800 2#

420091001_NOPV PCP PCO_01262009_text.pdf, page 3Proposed Compliance Order With respect to item number 1 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Centerpoint Energy Gas Transmission. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 4-2009-1001 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, R. M. Seeley Director, Southwest Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 3#

420091001_NOPV PCP PCO_01262009_text.pdf, page 4PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Centerpoint Energy Gas Transmission a Compliance Order incorporating the following remedial requirements to ensure the compliance of Centerpoint Energy Gas Transmission with the pipeline safety regulations: 1. In regard to Item Number 1 of the Notice pertaining to failure to comply with the requirements of §191.15, Centerpoint must immediately file a supplemental RSPA 7100.2 report for number 20080008 specifying the cause of failure of the Mountainburg, AR incident and updating any other information obtained since the incident. If all of the information about the incident is known, this information must be included and the incident report filed as a final report. Centerpoint must also file supplemental reports for report numbers 20040051, 20050080, 20050108, and 20080035 where additional information has been acquired since the original report was made. If all of the information about these incidents is known, these reports must also be filed as final reports. 2. Centerpoint shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to R.M. Seeley, Director, Southwest Region, Pipeline and Hazardous Materials Safety Administration. Costs shall 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. 4#