CCPS TRANSPORTATION, LLC — Notice of Probable Violation

party submissionOfficial PDF420175037_Operator Response to Notice and Request for Hearing and Case Files_12082017.pdf#

420175037_Withdrawal of Notice Letter_07122018_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED July 12, 2018 Mr. Terry McGill President CCPS Transportation, LLC 1100 Louisiana Street Suite 3300 Houston, TX 77002 CPF 4-2017-5037 Dear Mr. McGill: On November 7, 2017, CCPS Transportation, LLC (“Enbridge”) was issued a Notice of Probable Violation for the case number referenced above. This Notice cited Enbridge for failure to comply with the terms of the Compliance Order issued on October 8, 2015 in CPF 4-2014-5005. Upon further deliberation, PHMSA has decided to provide Enbridge with the opportunity to provide more information relating to its compliance actions. This letter is to inform you that PHMSA hereby withdraws the Notice without prejudice and that the case is now closed. PHMSA retains its authority to review Enbridge’s actions relating to the Compliance Order as issued in CPF 4-2014-5005, and reserves its right to seek enforcement if necessary. Sincerely, Mary L. McDaniel, P.E. Director, Southwest Region Pipeline and Hazardous Materials Safety Administration cc: Mr. Darren J. Hunter, Rooney Rippie & Ratnaswamy LLP, Kingsbury Center, Ste. 600, 350 W Hubbard St., Chicago, IL 60654 Mr. Mark A. Maki, President, Enbridge Energy Partners LP, 1100 Louisiana St., Ste. 3300, Houston, TX 77002#

420175037_NOPV PCP PCO_11072017.pdf, page 1Official PDFU.S. Department 8701 S. Gessner, Suite 630 of Transportation Houston, TX 77074 Pipeline and Hazardous Materials Safety Administration NOTICE OF PROBABLE VIOLATION, PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED November 7, 2017 Mr. Terry Mc Gill President, CCPS Transportation, LLC 1100 Louisiana Suite 3300 Houston, TX 77002 CPF 4-2017-5037 Dear Mr. McGill: On October 8, 2015, pursuant to 49 U.S.C. § 60118(b) and 49 CFR § 190.213, the Associate Administrator for Pipeline Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), issued a Final Order to CCPS Transportation, LLC (CCPS, the Operator, Enbridge), a subsidiary of Enbridge Energy Company, Inc. The Final Order (CPF 4-2014-5005) found that CCPS committed violations of the pipeline safety regulations, 49 CFR § 195.202 and ordered CCPS perform certain specified actions to ensure compliance with the pipeline safety regulations applicable to its' operators. Specifically, the Compliance Order required CCPS to perform the following items: 1. a. In regard to Item Number one of the Notice pertaining to issuance of waivers modifying the company Specifications or Standards for the manufacture of steel pipe for pipeline projects, Enbridge must provide technical justification for the waivers granted on the project and show that the waivers did not result in the pipeline being constructed with pipe that would pose a integrity threat to the public or the environment. b. This action, for item 1, should be completed within 30 days of issuance of the Final Order.#

420175037_NOPV PCP PCO_11072017.pdf, page 2As a result of a review of this matter, it appears that Enbridge has committed a probable violation of 49 CFR § 190.213 regarding the above-referenced Final Order. Specifically, Enbridge has failed to comply with Item 1 of the Compliance Order issued with the Final Order. The deadline for completion of the items in the Compliance Order was November 7, 2015. To date, PHMSA has not received adequate technical justification for the waivers granted on the project. In the previous enforcement case (CPF 4-2014-5005), Enbridge specified enhanced pipe manufacturing specifications as part of an overall effort to improve the integrity of their pipelines. This came in the wake of two accidents resulting in significant releases, specifically a 24,000 bbl of crude oil release into the Kalamazoo River in MI in July 2010 and a 1,200 bbl of crude oil release in Adams County, Wisconsin in July 2012. Following the Wisconsin release PHMSA issued a CAO and Enbridge responded (August 2012) by submitting the "Lakehead Plan" which included actions Enbridge committed to take and included more stringent specifications for the manufacture of steel pipe for pipeline construction projects. However, Enbridge failed to follow their own pipe manufacturing specifications for the CCPS Flanagan South pipeline. In fact CCPS waived many of their enhanced specifications for the manufacture of the pipe. As a result, PHMSA issued a NOPV with a Compliance Order requiring Enbridge to provide engineering justification for the waivers. The Final Order on this case was issued on October 8, 2015 and it found that CCPS failed to provide technical justification for the waivers and required the operator to justify not following their pipe manufacturing specifications. In the December 1, 2015 CCS response to the Final Order, the operator stated that "Enbridge believes that the previously submitted technical justification is adequate". However, the Final Order had already determined that the operators' previous responses were inadequate. As a result, CCPS failed to meet the requirements of the Compliance Order. Proposed Civil Penalty As of April 27, 2017, under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $209,002 per violation per day the violation persists up to a maximum of $2,090,022 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 $ 50,100 as follows: Item number PENALTY 1 $ 50,100#

420175037_NOPV PCP PCO_11072017.pdf, page 3Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b): 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 4-2017-5037 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Frank Causey Frank Causey Acting Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#

420175037_NOPV PCP PCO_11072017.pdf, page 4COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49 CFR § 195.202. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 CFR § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.202 (Item 1), Respondent must: a. Provide complete technical justification, required by the Final Order for case CPF-4-2014-5005, for the waivers granted for the manufacture of their pipe used to construct the Flanagan South pipeline. Submitting the same information that was determined to be inadequate by the Final Order in case CPF 4-2014-5005 is not acceptable. b. Provide all information that was used by the Enbridge Technical Standards Deviation Request (TSDR) process including but not limited to notes, analysis reports, specifications and standards that were used to evaluate each wavier and a complete explanation how the information was used to conclude that it was not necessary, to manufacture the pipe to the written Enbridge pipe specifications (Submerged-Arc-Welded Steel Pipe Specification Supplementary to API 5L, EE103-(2010)). C. If Enbridge cannot provide PHMSA adequate technical justification as determined by the PHMSA SW Region Director for each wavier, the operator must perform integrity assessments on the pipeline every 3 years using tools and methods appropriate to detect potential integrity issues including but not limited to in-line inspections capable of detecting weld seam defects, cracking in the pipe body and corrosion damage. d. This action for Item 1 should be completed within 30 days of issuance of the Final Order. The integrity assessments must begin no later than 6 months after the Final Order is issued. e. Itisrequested (not mandated) that CCPS maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Terri Binns, Acting Director, Southwest, Pipeline and Hazardous Materials Safety Administration. Itis requested that these costs be reported in two categories: 1) total cost associated with preparation/revision ofplans, procedures, studies and analyses; and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure.#

420175037_PHC Hearing Scheduled_05302018_text.pdf, page 1Official PDFMay 30, 2018 VIA CERTIFIED MAIL AND EMAIL TO: darren.hunter@r3law@.com and mary.mcdaniel@dot.gov Mr. Darren J. Hunter, Esq. Counsel for CCPS Transportation, LLC Rooney, Rippie & Ratnaswamy LLP Kingsbury Center, Suite 600 350 W. Hubbard Street Chicago, IL 60554 Ms. Mary McDaniel Director, Southwest Region Pipeline and Hazardous Materials Safety Administration 8701 South Gessner, Suite 630 Houston, TX 77074 Re: Notice of Hearing, CCPS Transportation, LLC CPF No. 4-2017-5037 Dear Mr. Hunter and Ms. McDaniel: In accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order issued to CCPS Transportation, LLC by the Office of Pipeline Safety in the above-referenced case. The hearing will take place on August 8, 2018, beginning at 8:30 a.m. Central Time. The hearing will be at the PHMSA Southwest Region office, 8701 South Gessner, Suite 630, Houston, TX 77074. Upon arrival at the building, attendees will be required to present photo identification to security personnel. A contact phone number for the day of the hearing is (713) 272-2859. At least 10 calendar days prior to the hearing (or by July 30, 2018), both parties must submit and exchange any additional written materials they intend to present at the hearing and a list of attendees. This information should be provided electronically. Materials not submitted by this date may be excluded. If you have any questions, please do not hesitate to call me at (202) 366-9093.#

420175037_PHC Hearing Scheduled_05302018_text.pdf, page 2CPF No. 4-2017-5037 Page 2 Sincerely, Larry White Presiding Official cc: Mr. Terry McGill, President, CCPS Transportation, LLC, 1100 Louisiana, Suite 3300, Houston, TX 77002 Mr. Adam Phillips, Counsel, Southwest Region, OPS Ms. Lauren Clegg, Counsel, Southwest Region, OPS#

420175037_ NOPV PCP PCO_11072017_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION, PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL ‐ RETURN RECEIPT REQUESTED November 7, 2017 Mr. Terry Mc Gill President, CCPS Transportation, LLC 1100 Louisiana Suite 3300 Houston, TX 77002 CPF 4-2017-5037 Dear Mr. McGill: On October 8, 2015, pursuant to 49 U.S.C. § 60118(b) and 49 CFR § 190.213, the Associate Administrator for Pipeline Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), issued a Final Order to CCPS Transportation, LLC (CCPS, the Operator, Enbridge), a subsidiary of Enbridge Energy Company, Inc. The Final Order (CPF 4-2014-5005) found that CCPS committed violations of the pipeline safety regulations, 49 CFR § 195.202 and ordered CCPS perform certain specified actions to ensure compliance with the pipeline safety regulations applicable to its’ operators. Specifically, the Compliance Order required CCPS to perform the following items: 1. a. In regard to Item Number one of the Notice pertaining to issuance of waivers modifying the company Specifications or Standards for the manufacture of steel pipe for pipeline projects, Enbridge must provide technical justification for the waivers granted on the project and show that the waivers did not result in the pipeline being constructed with pipe that would pose a integrity threat to the public or the environment. b. This action, for item 1, should be completed within 30 days of issuance of the Final Order.#

420175037_ NOPV PCP PCO_11072017_text.pdf, page 2As a result of a review of this matter, it appears that Enbridge has committed a probable violation of 49 CFR § 190.213 regarding the above-referenced Final Order. Specifically, Enbridge has failed to comply with Item 1 of the Compliance Order issued with the Final Order. The deadline for completion of the items in the Compliance Order was November 7, 2015. To date, PHMSA has not received adequate technical justification for the waivers granted on the project. In the previous enforcement case (CPF 4-2014-5005), Enbridge specified enhanced pipe manufacturing specifications as part of an overall effort to improve the integrity of their pipelines. This came in the wake of two accidents resulting in significant releases, specifically a 24,000 bbl of crude oil release into the Kalamazoo River in MI in July 2010 and a 1,200 bbl of crude oil release in Adams County, Wisconsin in July 2012. Following the Wisconsin release PHMSA issued a CAO and Enbridge responded (August 2012) by submitting the “Lakehead Plan” which included actions Enbridge committed to take and included more stringent specifications for the manufacture of steel pipe for pipeline construction projects. However, Enbridge failed to follow their own pipe manufacturing specifications for the CCPS Flanagan South pipeline. In fact CCPS waived many of their enhanced specifications for the manufacture of the pipe. As a result, PHMSA issued a NOPV with a Compliance Order requiring Enbridge to provide engineering justification for the waivers. The Final Order on this case was issued on October 8, 2015 and it found that CCPS failed to provide technical justification for the waivers and required the operator to justify not following their pipe manufacturing specifications. In the December 1, 2015 CCPS response to the Final Order, the operator stated that “Enbridge believes that the previously submitted technical justification is adequate”. However, the Final Order had already determined that the operators’ previous responses were inadequate. As a result, CCPS failed to meet the requirements of the Compliance Order. Proposed Civil Penalty As of April 27, 2017, under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $209,002 per violation per day the violation persists up to a maximum of $2,090,022 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 $ 50,100 as follows: Item number PENALTY 1 $ 50,100#

420175037_ NOPV PCP PCO_11072017_text.pdf, page 3Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). 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 4-2017-5037 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Frank Causey Acting Director, Southwest Region Pipeline and Hazardous Materials Safety Administration#

420175037_ NOPV PCP PCO_11072017_text.pdf, page 4COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item l in the Notice for violation of 49 CFR § 195.202. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 CFR § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 195.202 (Item 1), Respondent must: a. Provide complete technical justification, required by the Final Order for case CPF-4-2014-5005, for the waivers granted for the manufacture of their pipe used to construct the Flanagan South pipeline. Submitting the same information that was determined to be inadequate by the Final Order in case CPF 4-2014-5005 is not acceptable. b. Provide all information that was used by the Enbridge Technical Standards Deviation Request (TSDR) process including but not limited to notes, analysis reports, specifications and standards that were used to evaluate each wavier and a complete explanation how the information was used to conclude that it was not necessary, to manufacture the pipe to the written Enbridge pipe specifications (Submerged-Arc-Welded Steel Pipe Specification Supplementary to API 5L, EE103-(2010)). c. If Enbridge cannot provide PHMSA adequate technical justification as determined by the PHMSA SW Region Director for each wavier, the operator must perform integrity assessments on the pipeline every 3 years using tools and methods appropriate to detect potential integrity issues including but not limited to in-line inspections capable of detecting weld seam defects, cracking in the pipe body and corrosion damage. d. This action for Item 1 should be completed within 30 days of issuance of the Final Order. The integrity assessments must begin no later than 6 months after the Final Order is issued. e. It is requested (not mandated) that CCPS maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Terri Binns, Acting Director, Southwest, 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.#