# FLORIDA GAS TRANSMISSION CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420131019
- **title:** FLORIDA GAS TRANSMISSION CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2013-11-21
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 191.5(a), 192.463(a), 192.469.
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-420131019.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420131019
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420131019
**body:**

Notice of Probable Violation involving FLORIDA GAS TRANSMISSION CO. PHMSA's enforcement data identifies the cited regulations as 191.5(a),  192.463(a),  192.469. The case was opened on 2013-11-21 and is reported as closed as of 2016-08-17. Proposed civil penalty: $197,200. Assessed civil penalty: $197,200. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420131019_Closure Letter_08172016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_Closure%20Letter_08172016.pdf

420131019_Closure Letter_08172016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_Closure%20Letter_08172016_text.pdf

420131019_Final Order_12142015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_Final%20Order_12142015.pdf

420131019_Final Order_12142015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_Final%20Order_12142015_text.pdf

420131019_NOPV PCP PCO_11212013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_NOPV%20PCP%20PCO_11212013.pdf

420131019_NOPV PCP PCO_11212013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_NOPV%20PCP%20PCO_11212013_text.pdf

420131019_Operator Response to Notice_12202013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420131019/420131019_Operator%20Response%20to%20Notice_12202013.pdf

420131019_NOPV PCP PCO_11212013_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
November 21, 2013
Mr. Ryan Coffey
Executive Vice President, Operations
Florida Gas Transmission Company, LLC
800 Sonterra Blvd., #400
San Antonio, TX 78258
CPF 4-2013-1019
Dear Mr. Coffey:
On February 13 - 14, 2012, 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 conducted an incident investigation for the rupture that occurred on the
Florida Gas Transmission (FGT) 30” LAMEB-8 natural gas pipeline in East Baton Rouge,
Louisiana.
As a result of the inspection, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the
probable violation(s) are:
1. § 191.5 Immediate notice of certain incidents.
(a) At the earliest practicable moment following discovery, each operator shall give
notice in accordance with paragraph (b) of this section of each incident as defined in
191.3.



Florida Gas failed to make notice to the National Response Center (NRC) at the earliest
practical moment following discovery of their February 13, 2012, rupture in East Baton
Rouge, Louisiana.
Alarms were received in the control room at 2:26 am, and FGT indicated on their
PHMSA Form 7100.2, Part A, 19a, that the local time operator identified the incident was
2:30 am. The operator did not make a call to the NRC until 5:14 am on February 13,
2012, which is 2 hours and 48 minutes after the rupture occurred at 2:26 am.
2. § 192.463 External corrosion control: Cathodic protection
(a) Each cathodic protection system required by this subpart must provide a level of
cathodic protection that complies with one or more of the applicable criteria
contained in appendix D of this part. If none of these criteria is applicable, the
cathodic protection system must provide a level of cathodic protection at least equal
to that provided by compliance with one of more of these criteria.
FGT did not have adequate cathodic protection on the LAMEB-8 30” pipeline in the area
downstream of the Zachary Compressor Station (Station 8). On February 13, 2012, at
2:26 am, Florida Gas Transmission experienced a rupture caused by external corrosion of
their pipeline in East Baton Rouge, LA.
FGT close interval survey (CIS) results for the section of pipeline downstream of the
Zachary Compressor station indicated inadequate levels of cathodic protection. In
addition, FGT’s quarterly reports submitted in response to a Safety Order issued as a
result of this incident (4-2012-1001S) also concluded “Analysis of the integrity sheets
identified areas of deficient CP.”
From the close interval survey data (labeled Station 8 to Amite River), the CIS
downstream of the Deerford Tap test station (168+52) indicated cathodic protection
levels below -850 mV and upstream and downstream of the Big Mac Rectifier test station
(370+87) a large area of potentials below -600 mV.
3. § 192.469 External corrosion control: Test Stations
Each pipeline under cathodic protection required by this subpart must have
sufficient test stations or other contact points for electrical measurement to
determine the adequacy of cathodic protection.
2



Florida Gas did not have sufficient test stations to measure the adequacy of cathodic
protection on the LAMEB-8 30” pipeline. FGT cathodic protection annual survey results
for both 2010 and 2011 indicate adequate levels of cathodic protection recorded as the
designated test stations; however, the close interval survey results for that same area
identified cathodic protection levels below the -850 mV criteria selected. The lack of test
stations prevented FGT from identifying areas of low potential during their annual
cathodic protection monitoring.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000
per violation per day the violation persists up to a maximum of $2,000,000 for a related series of
violations. For violations occurring prior to January 4, 2012, the maximum penalty may not
exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 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 $197,200 as follows:
Item number PENALTY
Item 2 $158,400
Item 3 $ 38,800
Warning Items
With respect to Item 1, 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 item(s). Failure to do so may
result in additional enforcement action.
Proposed Compliance Order
With respect to Item 3 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to Florida 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. 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
3



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 4-2013-1019 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
4



PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Florida Gas Transmission Company, LLC a
Compliance Order incorporating the following remedial requirements to ensure the compliance
of Florida Gas Transmission Company, LLC with the pipeline safety regulations:
1. 2. 3. In regard to Item Number 3 of the Notice pertaining to cathodic protection test
stations, FGT shall review the existing test stations on the LAMEB-8 30” pipeline
and install additional test stations to adequately determine the effectiveness of
cathodic protection on the pipeline.
FGT shall conduct the review of the existing test stations and install new stations
within 6 months of this Order.
It is requested (not mandated) that FGT 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. 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.
5

420131019_Final Order_12142015_text.pdf

December 14, 2015
Mr. Luke Fletcher
Chief Executive Officer & President
Florida Gas Transmission Company, LLC
800 E Sonterra Blvd
San Antonio, TX 78258
Re: CPF No. 4-2013-1019
Dear Mr. Fletcher:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $197,200, and modifies actions that need to be taken by
Florida Gas Transmission Company, LLC 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, Southwest Region,
this enforcement action will be closed. Service of this Final Order is made pursuant to 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. Rod Seeley, Director, Southwest Region, PHMSA
Mr. Bob Hogfoss and Ms. Catherine Little, Hunton & Williams LLP,
Bank of America Plaza, Suite 4100, 600 Peachtree Street, N.E., Atlanta, GA 30308
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
_________________________________________
In the Matter of )
Florida Gas Transmission Company, LLC, ) CPF No. 4-2013-1019
)
)
)
Respondent. )
_________________________________________ )
FINAL ORDER
On February 13-14, 2012, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and
Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
conducted an investigation of a rupture that occurred on a gas pipeline operated by Florida Gas
Transmission Company, LLC (FGT or Respondent) in East Baton Rouge, Louisiana.1
As a result of the investigation, the Director, Southwest Region, OPS (Director), issued a Notice
of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice) to
Respondent on November 21, 2013. In accordance with 49 C.F.R. § 190.207, the Notice alleged
that FGT committed two violations of the natural gas pipeline safety regulations, proposed a civil
penalty of $197,200, and proposed certain corrective action. The Notice also contained one
warning item under 49 C.F.R. § 190.205.
FGT responded to the Notice on December 20, 2013, contested the alleged violations and
requested a hearing. Additional written materials were submitted by Respondent on June 13,
2014. In accordance with 49 C.F.R. § 190.211, a hearing was held on June 25, 2014, in Houston,
Texas, before a Presiding Official from the Office of Chief Counsel, PHMSA. Respondent
submitted a post-hearing brief and additional materials on August 8, 2014. The Director
submitted a written evaluation of Respondent’s response material on January 7, 2015.
1 FGT operates approximately 5,400 miles of natural gas pipelines from Texas to Florida, as reported by
FGT for the 2014 calendar year pursuant to 49 C.F.R. § 191.17. FGT is a subsidiary of Energy Transfer
Partners, L.P. (ETP). Other subsidiaries of ETP include Panhandle Eastern Pipe Line Co., Sunoco
Pipeline L.P., Mid-Valley Pipeline Co., West Texas Gulf Pipe Line Co., and Trunkline Gas Co.



CPF No. 4-2013-1019
Page 2
BACKGROUND
On February 13, 2012, at 2:26 a.m., a rupture occurred on the FGT LAMEB-8 natural gas
pipeline in East Baton Rouge, Louisiana, downstream of the Zachary Compressor Station.2 FGT
Gas Control contacted the Zachary Station at 2:30 a.m. to report that one of the station’s
compressor engines had gone offline.3 During the conversation, two more compressors went
offline and a pressure drop was noted. The pressure drop resulted in the automatic closure of the
mainline valve.
The Zachary Station Operations Manager arrived at the site of the failure and confirmed a
rupture had occurred. Local fire departments were already onsite when the Operations Manager
arrived. Persons within a half-mile of the area were evacuated.4
As a result of the incident, the Director issued a Notice of Proposed Safety Order to FGT on
February 24, 2012. PHMSA and FGT executed a Consent Agreement to resolve that matter on
May 1, 2012.5 The Consent Agreement required FGT to arrange for metallurgical examination
of the failed pipe, to perform additional corrosion control evaluations, and to take other actions.
The results of the metallurgical examination determined the “failure occurred as a result of wall
section thinning and subsequent tensile overload due to external corrosion.”6
The incident caused estimated property damage of $13,000.7 As of April 30, 2013, the total
estimated cost associated with the incident, including cost of performing actions under the
Consent Agreement was $2.32 million.8 The terms of the Consent Agreement were satisfied and
that matter was closed by the Director on December 19, 2013.9 A few weeks before closing the
Consent Agreement, the Director issued the Notice in this case, alleging two violations of the
safety regulations related to corrosion control.
FINDINGS OF VIOLATION
Item 2 and Item 3 of the Notice alleged that Respondent committed violations of 49 C.F.R.
§§ 192.463(a) and 192.469, respectively. The alleged violations were as follows:
2 OPS Pipeline Safety Violation Report at 11 (Nov. 25, 2013).
3 Violation Report, Exhibit A(2) – FGT Incident Report PHMSA Form 7100.2 at 13 (rev. Jul. 3, 2013).
4 FGT Prehearing Submission at 4 (Jun. 13, 2014).
5 Florida Gas Transmission Co., CPF No. 4-2012-1001S, 2012 WL 3144498 (May 25, 2012).
6 Violation Report, Exhibit A(3) – FGT Fifth Quarterly Report at 3 (Apr. 30, 2013).
7 FGT Incident Report PHMSA Form 7100.2 at 3. In its Prehearing Submission at 2, however,
Respondent contended there was no property damage associated with the incident.
8 FGT Fifth Quarterly Report at 5.
9 Prehearing Submission at 3.



CPF No. 4-2013-1019
Page 3
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.463(a), which states:
§ 192.463 External corrosion control: Cathodic protection.
(a) Each cathodic protection system required by this subpart must
provide a level of cathodic protection that complies with one or more of
the applicable criteria contained in appendix D of this part. If none of
these criteria is applicable, the cathodic protection system must provide a
level of cathodic protection at least equal to that provided by compliance
with one or more of these criteria.
The Notice alleged Respondent violated § 192.463(a) by failing to provide an adequate level of
cathodic protection on the pipeline. Specifically, the Notice alleged that Respondent performed
a close interval survey (CIS) of the LAMEB-8 pipeline in 2012 following the rupture. Data from
the CIS indicated there were areas on the pipeline that did not have cathodic protection that met
the applicable -850mV criteria.
Respondent contested the allegation and explained that cathodic protection surveys performed
for two consecutive years prior to the incident indicated the pipeline had adequate cathodic
protection. Following the post-incident CIS in which deficiencies were identified, Respondent
installed new groundbeds and rectifiers to increase the level of cathodic protection and remediate
the deficiencies. Respondent argued no violation occurred because the Company promptly
responded to the CIS by taking corrective action. Respondent also argued the proposed penalty
should be lower in light of the good faith corrective action taken prior to receiving the Notice.
Applicable Safety Standards
Buried steel pipelines that transports gas must have cathodic protection to protect against the
risks of external corrosion.
10 Criteria for determining the adequacy of cathodic protection are
listed in Appendix D of 49 C.F.R. Part 192.11 One of the criteria is a measured potential
of -850mV with reference to a saturated copper-copper sulfate half-cell with the protective
current applied, known as the -850mV criteria.12
Operators must monitor their cathodic protection systems to ensure the protection meets the
applicable criteria. Monitoring is conducted through regular tests or surveys of the cathodic
protection system.
13 If a survey identifies potentials that do not meet applicable criteria, an
operator must take “prompt remedial action” to correct the deficiency.
14 In most instances,
10 §§ 192.455 and 192.457.
11 § 192.463.
12 49 C.F.R. Part 192, Appendix D, paragraph (I)(A)(1).
13 § 192.465(a).
14 § 192.465(d).



CPF No. 4-2013-1019
Page 4
“prompt remedial action” means the deficiency must be corrected before the next regular
inspection cycle of the cathodic protection.15
Discussion
PHMSA reviews the record to determine whether the cathodic protection on Respondent’s
pipeline was adequate under the regulation. Results from the CIS performed in 2012 indicated
that protection levels did not meet the -850mV criteria in the area of the failure. Quarterly
reports filed by FGT under the Consent Agreement also noted areas of deficient cathodic
protection.
16 This evidence shows the pipeline did not have adequate cathodic protection.
While Respondent argued that it promptly corrected the deficiencies identified by the 2012 CIS,
evidence shows the deficiencies were actually known for several years. In a document referred
to as the “Root Cause Failure Analysis Report” (RCFA), FGT provided factual information in
response to questions related to the failure that occurred February 13, 2012.17 The RCFA
documented that low potentials were identified in 2009 during an earlier CIS.
18 The RCFA also
documented that not all of the low potentials were remediated.
For example, Question 26 of the RCFA asks if all low potentials from the 2009 CIS were
addressed. FGT answered that they were not, and that the most severe deficiency at a line
crossing had its budget for remediation turned down three straight years.19 Likewise, FGT
answered Question 31 stating the pipeline failure occurred at a low potential area that was
documented in two previous surveys “but was not investigated or remediated.”20 This evidence
demonstrates Respondent’s pipeline had inadequate cathodic protection leading up to the failure
that were not promptly remediated.
Accordingly, having reviewed the record, I find Respondent violated § 192.463(a) by failing to
provide a level of cathodic protection on its pipeline that complied with applicable criteria. FGT
has already taken corrective action to address these low potential areas.
15 See, e.g., CenterPoint Energy Gas Transmission Co., CPF No. 4-2005-1008, Item 1, 2008 WL 565345,
at *1 (Feb. 11, 2008) (stating “PHMSA considers remedial action to be prompt if . . . all necessary
remedial actions have been completed by the next scheduled monitoring”).
16 FGT Fifth Quarterly Report at 3.
17 Violation Report at 26; Exhibit A(5) – FGT Root Cause Failure Analysis (RCFA) Report.
18 RCFA Report at 1-2.
19 Violation Report at 12; RCFA Report at 2.
20 Violation Report at 12; RCFA Report at 2.



CPF No. 4-2013-1019
Page 5
Item 3. The Notice alleged Respondent violated 49 C.F.R. § 192.469, which states:
§ 192.469 External corrosion control: Test stations.
Each pipeline under cathodic protection required by this subpart must
have sufficient test stations or other contact points for electrical
measurement to determine the adequacy of cathodic protection.
The Notice alleged that Respondent violated § 192.469 by failing to have sufficient test stations
to determine the adequacy of cathodic protection on its pipeline. Specifically, the Notice alleged
that cathodic protection surveys using test stations in 2010 and 2011 indicated there was
adequate cathodic protection, even though there were areas that did not have adequate protection
as documented in a CIS.
Respondent argued that the pipeline has sufficient test stations to determine the adequacy of
cathodic protection. The test stations, Respondent explained, are spaced at distances consistent
with industry practice. In the judgment of FGT’s corrosion control personnel, they are sufficient
to ensure there is adequate cathodic protection. Respondent noted the regulation does not
specify a uniform distance between stations and PHMSA guidance recognizes spacing may vary
widely depending upon local conditions.21
Applicable Safety Standards
Operators of gas pipelines that have cathodic protection must test the cathodic protection at
regular intervals to ensure it meets applicable requirements for corrosion control.22 Test stations
are the locations on a pipeline designated by the operator where cathodic protection readings are
taken.23 Periodic surveys typically involve taking readings at those test stations. Operators may
also perform CIS, which tests the cathodic protection at much shorter distances. For example,
CIS may test the protection every two to three feet along the pipeline, whereas survey test
stations may be much farther apart.24
Pipelines must have a “sufficient” number of test stations so that when performing a survey, the
operator can determine if cathodic protection is adequate.25 The regulation does not establish a
specific number of test stations or specific distance between test stations, but does establish a
performance-based minimum level of safety that must be achieved.26 Rather than establishing a
21 Prehearing Submission at 2, citing PHMSA’s Corrosion Enforcement Guidance for Part 192. A copy
of the guidance was not included in the record, but the latest revision is available on the PHMSA website
at: http://www.phmsa.dot.gov/foia/e-reading-room (accessed Nov. 19, 2015).
22 § 192.465(a).
23 PHMSA Part 192 Corrosion Enforcement Guidance at 94, § 192.469 (rev. Dec. 9, 2014).
24 See PHMSA Stakeholder Awareness and Outreach Pipeline Glossary on the PHMSA website at:
http://primis.phmsa.dot.gov/comm/glossary (link to “Close Interval Survey”) (accessed Nov. 19, 2015).
25 § 192.469.
26 Tennessee Gas Pipeline Co., CPF No. 4-2012-1020, at 3, 2013 WL 8284480, at *2 (Dec. 26, 2013).



CPF No. 4-2013-1019
Page 6
uniform distance for test stations, the rule provides operators flexibility to achieve compliance in
a manner appropriate for their pipeline system, as long as the minimum level of safety is being
achieved.27 In this case, test stations on Respondent’s pipeline must be sufficient to enable FGT
to determine if the protection is adequate and if there are any deficiencies.
Discussion
PHMSA reviews the record to determine whether test stations on Respondent’s pipeline were
sufficient to assess the adequacy of cathodic protection. As noted above, Respondent performed
a CIS in 2009 that identified areas with inadequate cathodic protection. Upgrades were made to
address some of the deficiencies, including increasing rectifiers, but not all deficiencies were
remediated.
28 When Respondent conducted surveys using test stations in 2010 and 2011, the
surveys found no deficiencies in the cathodic protection. The 2012 CIS confirmed, however,
that deficiencies still existed on the line. These deficiencies were not identified by the test
stations in 2010 and 2011.
The facts presented in this case are similar to a prior enforcement action involving another
operator.29 In that case, the operator performed a CIS in 2008 that identified cathodic protection
deficiencies. The company took remedial measures and installed additional test stations. The
next year, it conducted a survey using test stations and found no deficiencies. When the
company performed another CIS in 2010, numerous locations were identified that still had
inadequate cathodic protection from 2008. PHMSA concluded that the operator had failed to
comply with the requirement in § 192.469 to have sufficient test stations, noting the company
should have done more to determine if the test stations added in 2008 were adequate.
While FGT argued that its test stations were appropriately spaced, the evidence demonstrates
Respondent’s pipeline did not have sufficient test stations to determine the adequacy of cathodic
protection. The surveys conducted by Respondent at test stations in 2010 and 2011 did not
detect inadequate cathodic protection areas that were detected by CIS in 2009 and 2012.
Accordingly, having reviewed the record, I find Respondent violated § 192.469 by failing to
have sufficient test stations to determine the adequacy of cathodic protection.
The findings of violation in this Order will be considered prior offenses in any subsequent
enforcement action taken against Respondent.
27 See, e.g., Magellan Pipeline Co., CPF No. 4-2012-5010, at 9, 2014 WL 5431188, at *8 (Sept. 2, 2014)
(discussing performance-based line marker requirements).
28 RCFA Report at 1-2.
29 Spectra Energy Trans., LLC, CPF No. 3-2013-1005, at 2, 2015 WL 1885172, at *1 (Mar. 11, 2015).



CPF No. 4-2013-1019
Page 7
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. The Notice proposed a civil penalty of $197,200 for the violations
cited above.
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225,
PHMSA 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; the good faith of Respondent in attempting to comply
with the pipeline safety regulations; and the effect on Respondent’s ability to continue in
business. In addition, PHMSA may consider economic benefit gained from the violation without
any reduction because of subsequent damages, and such other matters as justice may require.
Item 2: The Notice proposed a civil penalty of $158,400 for Respondent’s failure to provide an
adequate level of cathodic protection on its pipeline in violation of § 192.463(a).
The proposed penalty amount was based on factual assertions in the Violation Report relevant to
each of the penalty assessment criteria in § 190.225. With regard to the nature and
circumstances of the violation, the Report noted that the violation was a result of conduct by
FGT and that it was discovered by PHMSA. With regard to gravity, the Report noted the
violation was a causal factor in a pipeline incident, as defined in § 191.3, and that low cathodic
protection levels contributed to corrosion of the pipe that ruptured. The pipeline incident caused
evacuations and property damage.
With regard to the degree of Respondent’s culpability and good faith, the Violation Report
suggested that no reduction to the penalty was appropriate under these factors because FGT
failed to take appropriate action to comply with a requirement that was clearly applicable. The
Violation Report also noted a history of five offenses in the five-year period prior to issuance of
the Notice.
Respondent argued the proposed penalty should be reduced to reflect proactive and good faith
efforts by FGT to remediate deficiencies prior to issuance of the Notice. Respondent installed
new groundbeds and rectifiers after the 2012 CIS to improve cathodic protection. FGT also
implemented extensive corrective measures under the Consent Agreement. Respondent noted
that a subsequent CIS performed in 2013 demonstrated all low potentials have been remediated.
When considering good faith of a respondent under the assessment criteria, PHMSA looks at the
actions the operator was taking in attempting to comply with the regulation when the violation
occurred.30 A respondent’s actions after a violation was discovered to remediate the violation
generally do not warrant reducing a penalty because the operator already has an affirmative duty
to correct known compliance issues.31
30 City of Richmond, Virginia, CPF No. 1-2013-0001, 2014 WL 2875598 (May 2, 2014).
31 § 192.603(a).



CPF No. 4-2013-1019
Page 8
PHMSA acknowledges the measures taken by FGT to remediate the cathodic protection
deficiencies that were discovered. These actions, however, do not warrant reducing the penalty
because they were taken after the incident had occurred, when Respondent was under a
regulatory obligation to correct the deficiencies.32 For the same reason, Respondent’s efforts to
comply with the Consent Agreement do not justify reducing the penalty.
Based on a review of the record, PHMSA finds the proposed civil penalty is supported by the
evidence and is appropriate under the applicable assessment criteria. Respondent is assessed a
civil penalty of $158,400 for the violation of § 192.463(a).
Item 3: The Notice proposed a civil penalty of $38,800 for Respondent’s failure to have
sufficient test stations to determine the adequacy of cathodic protection in violation of § 192.469.
With regard to the nature and circumstances of the violation, the Violation Report noted the
violation was a result of equipment not being installed and this was discovered by PHMSA.
With regard to gravity, the Report suggested that pipeline safety had been “significantly
compromised” due to the inability of Respondent to determine the adequacy of cathodic
protection during annual surveys, which led to a pipeline failure.
With regard to the degree of Respondent’s culpability and good faith, the Violation Report
suggested that no reduction was appropriate, because FGT had failed to take appropriate action
to comply with a requirement that was clearly applicable. The Violation Report likewise noted
five prior offenses.
Respondent argued the penalties for Item 2 and Item 3 should be reduced or withdrawn because
both of the violations rely on circumstances of low cathodic protection potentials. Respondent
cited a prior PHMSA order to support this position.33
In the prior final order cited by Respondent, PHMSA found certain violations of the same
regulation were sufficiently similar that their combined penalties should be below the maximum
amount permissible for a single violation. Specifically, PHMSA found the operator’s alleged
failure to evaluate line marking jobs performed by a line locator (Item 6) was essentially the
same as the failure to conduct adequate oversight of the line locator (Item 4). Both allegations
involved the same regulatory requirement and the same evidentiary basis, namely, the conduct of
the manager responsible for overseeing the line locator.
The Agency also found the operator’s alleged failure to follow procedures for correcting
repeated encroachments (Item 8) was essentially the same as the failure to take appropriate
action to address repeated encroachments (Item 7). Even though these two items cited separate
regulatory requirements, they essentially involved the same requirement and they involved the
32 § 192.465(d).
33 Prehearing Submission at 6, citing Colorado Interstate Gas Co., CPF No. 5-2008-1005, at 12, 2009 WL
5538649 (Nov. 23, 2009).



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same evidentiary basis: the actions taken or not taken to address repeated encroachments.
PHMSA found each pair were related for purpose of the civil penalty cap that applies to a single
related series of violations.
There have been other enforcement cases in which an operator has argued multiple violations
were the same, but PHMSA found they were actually separate and distinct violations. This is
particularly the case where the violations involve separate regulatory requirements or required
proof of different facts. For example, an operator’s failure to perform a risk analysis to consider
the threat of flooding was found to be a separate violation from the operator’s failure to have
procedures for responding to flooding and other natural disasters.34 Although the violations both
related to an accident caused by flooding, they each involved a separate regulatory requirement
and separate evidence.
In the present matter, Item 2 concerns the requirement to have adequate cathodic protection, and
Item 3 concerns the requirement to have test stations to enable the monitoring of cathodic
protection. These are separate regulatory requirements. In addition, Item 3 requires proof that
Respondent failed to have a sufficient number of test stations, whereas the sufficiency of test
stations is not an issue in Item 2. Even though evidence of low cathodic protection readings is
relevant to both violations, overlap of some evidence is not a sufficient basis by itself to render
the violations a single offense. PHMSA finds Item 2 and Item 3 are separate and distinct
violations.
Based on a review of the record, the proposed civil penalty is supported by the evidence and is
appropriate under the applicable assessment criteria. Respondent is assessed a civil penalty of
$38,800 for the violation of § 192.469.
In summary, Respondent is assessed a total civil penalty of $197,200 for the violations cited
above.
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal
Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed
instructions are contained in the enclosure. Questions concerning wire transfers should be
directed to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.
The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $197,200 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
34 ExxonMobil Pipeline Co., CPF No. 5-2013-5007, 2015 WL 780721, at *22 (Jan. 23, 2015). See also,
Enbridge Energy Partners, L.P., CPF No. 3-2008-5011, 2010 WL 6531629 (Aug. 17, 2010) (evaluating
multiple violations and finding none were so related they constituted a single offense).



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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 the violation of § 192.469 (Item 3).
Under 49 U.S.C. § 60118(a), each person who owns or operates a natural gas pipeline facility is
required to comply with the applicable safety standards established under chapter 601, including
those established in 49 C.F.R. Part 192.
Respondent requested that the proposed compliance order be withdrawn because the Company
has already taken actions to satisfy the requirements.35 FGT noted that it has addressed localized
areas of low potentials by performing CIS in 2012 and 2013, increasing output of existing
rectifiers, testing cathodic protection at foreign line crossings, installing additional negative
leads, completing additional test readings, installing new ground beds and rectifiers, and
recoating portions of the pipeline.36
PHMSA recognizes efforts taken by FGT to address deficiencies in cathodic protection. With
respect to the proposed compliance order, however, the efforts do not appear to address the
actions that were proposed to demonstrate compliance with § 192.469. For example, Respondent
did not produce documentation demonstrating it has completed a review of existing test stations.
Since FGT did not satisfy the requirements of the proposed compliance order, the terms are not
withdrawn.
Respondent also requested that the terms of the proposed compliance order be modified to reflect
the flexibility permitted by the regulation that allows each operator to determine appropriate
means of complying with § 192.469, whether that be installing additional groundbeds, rectifiers,
or test stations.37
At the hearing, both parties acknowledged that compliance with § 192.469 may be possible
without installing additional test stations if other methods of compliance were available, such as
figuring out different protection levels at existing test stations to ensure adequate cathodic
protection along the pipeline. I agree with Respondent the compliance order should be modified.
The Company will be required to submit its plan for compliance to the Director for approval.
Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, FGT is ordered to
take the following actions to ensure compliance with the applicable pipeline safety regulations:
35 Prehearing Submission at 7.
36 FGT Post-hearing Brief at 3 (Aug. 8, 2014).
37 FGT Response at 3 (Dec. 20, 2013).



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1. 2. 3. 4. 5. With respect to the violation of § 192.469 (Item 3), FGT must conduct a documented
review and analysis of existing test stations and other contact points for electrical
measurement on the LAMEB-8 30” pipeline.
Based on the documented review and analysis performed under Paragraph 1, FGT must
identify additional actions that will ensure future monitoring is capable of determining
the adequacy of cathodic protection along the pipeline. Additional actions must include
those measures that are necessary to ensure compliance with § 192.469, such as
installation of additional test stations, changing of cathodic protection levels at existing
test stations, or other appropriate measures. Include a schedule for completing the
additional actions within six months of the date of this Order.
Submit the documented review and analysis prepared under Paragraph 1, and the
identification of additional actions and schedule prepared under Paragraph 2, to the
Director for prior approval within 45 days of the date of this Order.
Submit documentation demonstrating completion of the additional actions, as approved
by the Director under Paragraph 3, within six months of the date of this Order.
It is requested that FGT 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 replacement, additions or other changes to pipeline infrastructure.
The Director may grant an extension of time to comply with any of the requir
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