FLORIDA CITY GAS — Notice of Probable Violation

party submissionOfficial PDF42026023NOPV_Operator Response to Notice_03132026_(25-329815).pdf#

case documentOfficial PDF42026023NOPV_PCO_02122026_(25-329815).pdf#

case documentOfficial PDF42026023NOPV_PCO_02122026_(25-329815)_text.pdf#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Avenue, SE Washington, DC 20590 March 26, 2026 VIA EMAIL TO: jhouseholder@chpk.com Jeffrey M. Householder President and Chief Executive Officer Chesapeake Utilities Corporation 500 Energy Lane Dover, Delaware 19901 Re: CPF No. 4-2026-023-NOPV Dear Mr. Householder: Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of violation and specifies actions that need to be taken to comply with the pipeline safety regulations. When the terms of the compliance order are completed, as determined by the Director, Southwest Region, this enforcement action will be closed. Service of the Final Order by e-mail is effective upon the date of transmission and acknowledgement of receipt as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Linda Daugherty Acting Associate Administrator for Pipeline Safety Enclosures (Final Order and NOPV) cc: Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA Mike McCarty, Manager, Operations Compliance, Florida Public Utilities/Florida City Gas, mmccarty@chpk.com CONFIRMATION OF RECEIPT REQUESTED#

42026023NOPV_Final Order_03262026_(25-329815)_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 ) Florida City Gas, ) CPF No. 4-2026-023-NOPV ) ) ) Respondent. ) ____________________________________) FINAL ORDER On February 12, 2026, pursuant to 49 CFR § 190.207, the Director, Southwest Region, Office of Pipeline Safety (OPS), issued a Notice of Probable Violation and Proposed Compliance Order (Notice) to Florida City Gas (Respondent), a subsidiary of Chesapeake Utilities Corporation. The Notice proposed finding that Respondent violated the pipeline safety regulations in 49 CFR Part 193. The Notice also proposed certain measures to correct the violation. Respondent did not contest the allegation of violation or corrective measures. Based upon a review of all of the evidence, pursuant to section 190.213, I find Respondent violated the pipeline safety regulation listed below, as more fully described in the enclosed Notice, which is incorporated by reference: 49 CFR § 193.2625(b)(1) (Item 1) ─ Respondent failed to protect from corrosion components whose integrity or reliability could be adversely affected by corrosion. This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent. Compliance Actions Pursuant to 49 U.S.C. § 60118(b) and 49 CFR § 190.217, Respondent is ordered to take the actions proposed in the enclosed Notice to correct the violation. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Upon completion of the ordered actions, Respondent may request that the Director close the case. Failure to comply with this Order may result in the assessment of civil penalties under 49 CFR § 190.223 or in referral to the Attorney General for appropriate relief in a district court of the United States.#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 32 The terms and conditions of this order are effective upon service in accordance with 49 CFR § 190.5. ___________________________________ _________________________ Linda Daugherty Date Issued Acting Associate Administrator for Pipeline Safety#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 4U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 8701 S. Gessner, Suite 630 Houston TX 77074 NOTICE OF PROBABLE VIOLATION and PROPOSED COMPLIANCE ORDER VIA ELECTRONIC MAIL TO: jhouseholder@chpk.com February 12, 2026 Jeffry M. Householder President and Central Executive Officer Chesapeake Utilities Corporation 500 Energy Lane Dover, Delaware 19901 CPF 4-2026-023-NOPV Dear Mr. Householder: From May 5 to May 8, 2025, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected Florida City Gas’s (FCG) Miami Dade LNG Facility in Homestead, Florida. As a result of the inspection, it is alleged that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The item inspected and the probable violation is: 1. § 193.2625 Corrosion protection. (a) . . . . (b) Components whose integrity or reliability could be adversely affected by corrosion must be either - (1) Protected from corrosion in accordance with § 193.2627 through § 193.2635, as applicable; or (2) Inspected and replaced under a program of scheduled maintenance in accordance with procedures established under § 193.2605.#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 5§ 193.2627 Atmospheric corrosion control. Each exposed component that is subject to atmospheric corrosive attack must be protected from atmospheric corrosion by— (a) Material that has been designed and selected to resist the corrosive atmosphere involved; or (b) Suitable coating or jacketing. FCG failed to protect from corrosion components whose integrity or reliability could be adversely affected by corrosion in accordance with § 193.2625(b)(1). Specifically, FCG failed to protect the water glycol piping system at its Miami Dade LNG facility from atmospheric corrosive attack with suitable coating or jacketing. During the inspection, PHMSA personnel using viewing ports observed multiple instances of corrosion underneath the insulation on the water glycol system piping. The extent and severity of the corrosion observed indicate an aggressive corrosion mechanism because the degradation present is very unlikely to have developed within the approximately two- year period between the commissioning of the Miami Dade LNG facility in April 2023 and the on- site inspection in May 2025 had the system been adequately protected from atmospheric corrosive attack through appropriate coating or jacketing. Therefore, FCG failed to protect from corrosion components whose integrity or reliability could be adversely affected by corrosion in accordance with § 193.2625(b)(1). Proposed Civil Penalty Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed $272,926 per violation per day the violation persists, up to a maximum of $2,729,245 for a related series of violations. For violation occurring on or after December 28, 2023 and before December 30, 2024, the maximum penalty may not exceed $266,015 per violation per day the violation persists, up to a maximum of $2,660,135 for a related series of violations. For violation occurring on or after January 6, 2023 and before December 28, 2023, the maximum penalty may not exceed $257,664 per violation per day the violation persists, up to a maximum of $2,576,627 for a related series of violations. For violation occurring on or after March 21, 2022 and before January 6, 2023, the maximum penalty may not exceed $239,142 per violation per day the violation persists, up to a maximum of $2,391,412 for a related series of violations. For violation occurring on or after May 3, 2021 and before March 21, 2022, the maximum penalty may not exceed $225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a related series of violations. For violation occurring on or after January 11, 2021 and before May 3, 2021, the maximum penalty may not exceed $222,504 per violation per day the violation persists, up to a maximum of $2,225,034 for a related series of violations. For violation occurring on or after July 31, 2019 and before January 11, 2021, the maximum penalty may not exceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related series of violations. 2#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 6Also, for each violation involving LNG facilities, an additional penalty of not more than $99,704 occurring on or after December 30, 2024 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $97,179 occurring on or after December 28, 2023 and before December 30, 2024 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $94,128 occurring on or after January 6, 2023 and before December 28, 2023 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $87,362 occurring on or after March 21, 2022 and before January 6, 2023 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $82,245 occurring on or after May 3, 2021 and before March 21, 2022 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $81,284 occurring on or after January 11, 2021 and before May 3, 2021 may be imposed. For each violation involving LNG facilities, an additional penalty of not more than $79,875 occurring on or after July 31, 2019 and before January 11, 2021 may be imposed. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to propose a civil penalty assessment at this time. Proposed Compliance Order With respect to Item 1 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Florida City Gas. 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 Enforcement Proceedings. Please refer to this document and note the response options. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. §552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. § 552(b). Following your receipt of this Notice, you have 30 days to respond as described in the enclosed Response Options. If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. If you are responding to this Notice, we propose that you submit your correspondence to my office within 30 days from receipt of this Notice. The Region Director may extend the period for responding upon a written request timely submitted demonstrating good cause for an extension. In your correspondence on this matter, please refer to CPF 4-2026-023-NOPV and, for each document you submit, please provide a copy in electronic format whenever possible. 2#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 7Sincerely, Bryan Lethcoe Director, Southwest Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Enforcement Proceedings cc: Michael McCarty, Director, Operations Compliance, mmccarty@chpk.com 2#

42026023NOPV_Final Order_03262026_(25-329815)_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Florida City Gas (FCG) a Compliance Order incorporating the following remedial requirements to ensure the compliance of FCG with the pipeline safety regulations: A. With respect to Item 1 of the Notice concerning FCG’s failure to protect from corrosion components whose integrity or reliability could be adversely affected by corrosion in accordance with § 193.2625(b)(1), FCG must: i. Submit a work plan to the Director, Southwest Region to remove the insulation from the affected piping and apply a protective coating within 30 days of receipt of the Final Order. The work plan must address insulation removal, evaluation and treatment of corroded areas, and application of protective coating. FCG must implement the work plan upon submittal. Any deviations from the work plan must be documented and provided to the Director, Southwest Region upon completion of the work. ii. Remove the insulation from the affected piping and apply a protective coating using procedures and work practices consistent with generally accepted engineering practice within 120 days of receipt of the Final Order. iii. Provide monthly progress reports on the above corrective actions to the Director, Southwest Region. The monthly progress reports must include but are not limited to: progress made during the timeframe covered by that monthly report, progress anticipated in the timeframe of the next monthly report, any ongoing or anticipated delays and the justification for those delays. The first monthly progress report is due to the Director, Southwest Region, within 30 days after receipt of the Final Order. iv. Submit all records related to the work plan detailed in A(i) and (ii), including Work Orders and photography documenting the work, to the Director, Southwest Region within 30 days of the completion of the final work plan. B. It is requested (not mandated) that Florida City Gas maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, 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. 2#

42026023NOPV_Closure Letter_07092026_(25-329815)_text.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 8701 S. Gessner, Suite 630 Houston TX 77074 VIA ELECTRONIC MAIL TO: jhouseholder@chpk.com July 9, 2026 Jeffry M. Householder President and Chief Executive Officer Chesapeake Utilities Corporation 500 Energy Lane Dover, Delaware 19901 CPF 4-2026-023-NOPV Dear Mr. Householder: On March 26, 2026, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Florida City Gas (FCG), a Final Order in the above-referenced case. This Order included a Compliance Order. Based on our review of the documentation you provided, it has been determined that FCG has complied with the terms of this Order. Accordingly, this case is now closed, and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, R. M. Seeley Acting Director, Southwest Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration cc: Michael McCarty, Director, Operations Compliance, Chesapeake Utilities Corporation, mmccarty@chpk.com#