{"operation":"document","citation":"CPF 520071006","title":"CPN PIPELINE COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-06-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.907(a), 192.911(k), 192.937(b), 192.947(d).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520071006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520071006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520071006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520071006","body":"Notice of Probable Violation involving CPN PIPELINE COMPANY. PHMSA's enforcement data identifies the cited regulations as 192.907(a),  192.911(k),  192.937(b),  192.947(d). The case was opened on 2007-06-11 and is reported as closed as of 2010-04-27. Proposed civil penalty: $40,000. Assessed civil penalty: $17,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520071006_Closure Letter_04272010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_Closure%20Letter_04272010.pdf\n\n520071006_Final Order_12162009.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_Final%20Order_12162009.pdf\n\n520071006_Final Order_12162009_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_Final%20Order_12162009_text.pdf\n\n520071006_NOPV letter_06112007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_NOPV%20letter_06112007.pdf\n\n520071006_nopv letter_06112007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_nopv%20letter_06112007_text.pdf\n\n520071006_operator response to notice and request for hearing_07092007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520071006/520071006_operator%20response%20to%20notice%20and%20request%20for%20hearing_07092007.pdf\n\n520071006_Closure Letter_04272010.pdf\n\nSENT TO COMPLIANCE KEGISTRY\nHardcopy Bectronically d\n# of Copie:// Date 4-27-10.\nof Transportation\nU.S. Department\nLakewood, CO 80228\n12300 W. Dakota Ave., Suite 110\nSafety Administration\nPipeline and Hazardous Materials\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 27, 2010\nMr. Jack A. Fusco\nPresident and CEO\nCalpine Corporation\nCPN Pipeline Company\n717 Texas Avenue, Suite 1000\n-\nHouston, TX 77002\nCPF. 5-2007-1006\n-\nDear Mr. Fusco:\nOn December 16, 2009, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to CPN Pipeline Company a Final Order in the above-referenced case. This Order\nincluded a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation you provided and confirmation of payment of the civil penalty, it has been\ndetermined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nCC:\nPHP-60 Compliance Registry\nPHP-500 J. Gilliam (#118455)\n\n520071006_Final Order_12162009_text.pdf\n\nDEC 16 2009\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7005 0390 0005 6162 5197]\nMr. Jack A. Fusco\nPresident and CEO\nCalpine Corporation\nCPN Pipeline Company\n717 Texas Avenue, Suite 1000\nHouston, TX 77002\nRe: CPF No. 5-2007-1006\nDear Mr. Fusco:\nEnclosed is the Final Order issued in the above-referenced case. It makes findings of violation,\nassesses a civil penalty of $17,500, and specifies actions that need to be taken by CPN Pipeline\nCompany to comply with the pipeline safety regulations. The penalty payment terms are set\nforth in the Final Order. When the civil penalty has been paid and the terms of the compliance\norder completed, as determined by the Director, Western Region, this enforcement action will be\nclosed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Chris Hoidal, Director, Western Region, OPS\nScott Vickers\nCompliance Manager\nCPN Pipeline Company\n60 River Road\nRio Vista, CA 94571\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nCPN Pipeline Company, ) CPF No. 5-2007-1006\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn January 30 – February 1 and February 13 – 14, 2007, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the integrity\nmanagement program of CPN Pipeline Company (CPN or Respondent) in Rio Vista, California.\nCPN, a subsidiary of Calpine Corporation, operates approximately 250 miles of natural gas\npipelines primarily in California.\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated June 11, 2007, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Respondent had committed violations of the integrity management\nregulations in 49 C.F.R. Part 192 and proposed assessing a civil penalty of $40,000 for the\nalleged violations. The Notice also proposed ordering Respondent to take certain measures to\ncorrect the alleged violations.\nCPN responded to the Notice by letter dated July 9, 2007 (Response). Respondent contested the\nallegations of violation, objected to the civil penalty, and requested a hearing. In accordance\nwith 49 C.F.R. § 190.211, a hearing was held via telephone conference on April 10, 2008, with\nan attorney from the Office of Chief Counsel, PHMSA, presiding. Respondent had counsel\npresent during the hearing. After the hearing, CPN provided additional information by letter\ndated April 22, 2008 (Brief).\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\n\n\n\n2\nItem 1A: The Notice alleged that Respondent violated 49 C.F.R. § 192.947(d), which states:\n§ 192.947 What records must an operator keep?\nAn operator must maintain, for the useful life of the pipeline, records\nthat demonstrate compliance with the requirements of this subpart. At\nminimum, an operator must maintain the following records for review\nduring an inspection.\n(a) . . . .\n(d) Documents to support any decision, analysis and process\ndeveloped and used to implement and evaluate each element of the\nbaseline assessment plan and integrity management program. Documents\ninclude those developed and used in support of any identification,\ncalculation, amendment, modification, justification, deviation and\ndetermination made, and any action taken to implement and evaluate any\nof the program elements . . . .\nThe Notice alleged Respondent violated § 192.947(d) by failing to maintain records that\ndemonstrate compliance with the requirement to identify high consequence areas (HCAs).\n1\nSpecifically, the Notice alleged that Respondent failed to maintain documentation validating its\nuse of instrumentation to establish pipeline locations and identify HCAs. The instrumentation\nRespondent used, such as a Global Positioning System (GPS), allegedly had tolerances and\npotential inaccuracies that Respondent had not documented and accounted for to ensure the\naccurate identification of HCAs.\nIn its Response and at the hearing, CPN explained that it used equipment such as alignment\nsheets, aerial photography, mapping, and field measurement devices such as laser range finders,\nmethods ranged from plus or minus (±) 22 feet, for the least accurate, to ± 1 foot, for the most\naccurate. While Respondent acknowledged its integrity management program (IMP) did not\nexplicitly describe how the company accounted for those inaccuracies, the company argued that\nmeasuring wheels, and GPS equipment.2 Respondent also explained that the accuracy of these\neven if the measurements had been off by ± 50 to 100 feet, the company would not have\nmisidentified any actual HCAs. Notwithstanding such objections, Respondent committed to\ndocumenting the specifications and tolerances of its locating equipment in the future.\nSection 192.947(d) requires Respondent to maintain records for review during an OPS inspection\nthat demonstrate compliance with the requirements of Subpart O (§§ 192.901–192.951),\nincluding the requirement in § 192.905(a) to identify HCAs. “At minimum, an operator must\nmaintain . . . [d]ocuments to support any decision, analysis and process developed and used to\nimplement . . . each element of the . . . integrity management program[, including] those\ndeveloped and used in support of any identification . . . .”3\nRespondent acknowledged that it did\n1 Section 192.905(a) requires each operator to identify high consequence areas to determine which pipeline\nsegments are covered by the integrity management regulations. A “high consequence area” is an area defined by\n§ 192.903, which typically includes areas of concentrated population.\n2 At the hearing, CPN made different statements regarding its use of GPS equipment. The operator initially stated\nthat GPS was used to plot lines on maps (prescreen) to determine where field tests should be conducted; however,\nthe company stated later that it believed GPS instruments may not have been used to locate HCAs or pipelines.\n3 § 192.947(d).\n\n\n\n3\nnot have documentation at the time of the OPS inspection to validate its use of certain\ninstrumentation for accurately identifying HCAs. The company’s determination in retrospect\nthat no HCAs were misidentified may reduce the gravity of the violation, but does not negate the\nevidence that Respondent failed to have documentation required by the regulation.\nAccordingly, after considering all of the evidence, I find that Respondent violated § 192.947(d)\nby failing to maintain records that demonstrate the accurate use of instrumentation to identify\nHCAs.\nItem 1B: The Notice alleged Respondent violated § 192.947(d), as quoted above, by failing to\nmaintain records that demonstrate compliance with the requirement to develop and follow a\nwritten IMP no later than December 17, 2004.4 The Notice also alleged that Respondent did not\nhave documentation of decisions, processes, and results for various other integrity management\nprocesses. 5\nIn its Response and at the hearing, Respondent explained that its IMP, including its baseline\nassessment plan (BAP), had been completed prior to December 17, 2004, but the plan had been\nmaintained as an electronic spreadsheet and the file had since been overwritten. For this reason,\nthe company had been unable to retrieve a copy of the original baseline assessment plan that was\nin place as of December 17, 2004. Respondent did offer, in the alternative, to produce\ndocumentation of other elements of its IMP that had been completed prior to December 17,\n2004, for the purpose of demonstrating that it had completed its IMP by the deadline.\nRespondent also stated that it has implemented improvements to its document control system to\navoid this type of oversight in the future.\nRespondent submitted information that included several emails and two documents entitled\n“Data Collection and Analysis” and “Integrity Assessment.\n” With regard to the emails, some of\nwhich were dated after the deadline, it appears that CPN was still adding pipeline segments to its\ndocuments, I find only a few relevant pages dated prior to December 17, 2004 (e.g., certain\npages labeled “HCA Segment Data” and “Risk Analysis for Ranking HCA Pipeline Segment”).\nThe bulk of the documentation submitted by Respondent is either dated after December 17, 2004\nBAP on December 22, 2004.6 With regard to the information contained in the other two\n(e.g., data collections, procedures, and integrity assessments dated 2006 through 2008), or\nseemingly not part of Respondent’s IMP at all (e.g., a data book from 1977 and a test report from\n2001).\nSection 192.947(d) requires Respondent to maintain records for review during an OPS inspection\nthat demonstrate compliance with the requirement in § 192.907(a) to develop and follow a\n4 Section 192.907(a) requires each operator of a covered pipeline segment to develop and follow a written integrity\nmanagement program that contains all the elements described in § 192.911 no later than December 17, 2004. A\n“covered pipeline segment” is a segment of gas transmission pipeline located in an HCA, as defined in § 192.903.\n5 Notice at 2. At the hearing, the Presiding Official asked OPS representatives what the phrase “various” referred to\nin the Notice. They explained it referred to several processes discussed with the operator during the inspection for\nwhich documentation had been missing. Such other processes, however, were not included in the Notice nor in the\nsupporting evidence produced by OPS, i.e., the Pipeline Safety Violation Report (Violation Report), dated June 16,\n2007. Since the record does not contain a sufficient basis for these other “various” processes, I limit my review of\nthe record only to the single specific example provide in the Notice.\n6 Response, Exhibit 1A2.\n\n\n\n4\nwritten integrity management program no later than December 17, 2004. A written integrity\nmanagement program must contain all the elements described in § 192.911, such as HCA\nidentification, a BAP, identification of threats to each covered pipeline segment, provisions for\nremediating conditions found during an integrity assessment, a process for continual evaluation\nand assessment, and provisions for adding preventive and mitigative measures, among others.\nAfter considering the evidence submitted by Respondent, I find it does not demonstrate the\ncompany had developed a written integrity management program that contained all the elements\ndescribed in § 192.911 no later than December 17, 2004.\nAccordingly, after considering all of the evidence, I find Respondent violated § 192.947(d) by\nfailing to maintain records that demonstrate Respondent’s IMP was developed by December 17,\n2004.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.907(a), which states:\n§ 192.907 What must an operator do to implement this subpart?\n(a) General. No later than December 17, 2004, an operator of a\ncovered pipeline segment must develop and follow a written integrity\nmanagement program that contains all the elements described in § 192.911\nand that addresses the risks on each covered transmission pipeline\nsegment. The initial integrity management program must consist, at a\nminimum, of a framework that describes the process for implementing\neach program element, how relevant decisions will be made and by whom,\na time line for completing the work to implement the program element,\nand how information gained from experience will be continuously\nincorporated into the program. The framework will evolve into a more\ndetailed and comprehensive program. An operator must make continual\nimprovements to the program.\nThe Notice alleged that Respondent failed to develop a written integrity management program\nthat contained all the elements described in § 192.911 no later than December 17, 2004.\nSpecifically, the Notice alleged that Respondent’s IMP did not contain the identification of all\nwhich is near a government administration building, and the Black Mountain–Robbins Pipeline\nHCAs.7 Two specific locations, namely, the eastern segment of the Sutter Pipeline system,\nsegment, which is near a high school, were allegedly not identified in Respondent’s IMP.\nSutter Pipeline\nIn its Response and at the hearing, Respondent explained that the Sutter Pipeline location was\nnever an HCA, but had been mistakenly identified as such in 2006. CPN explained the location\nwas not an HCA because the administration building located near the pipeline was not occupied\nby 20 or more persons on at least five days a week for ten weeks a year.8\nRespondent further\nexplained the location had been mistakenly identified as an HCA in 2006 when the company\n7 Section 192.911(a) requires each operator’s integrity management program to contain an identification of all\nHCAs.\n8 See § 192.903.\n\n\n\n5\nreceived inaccurate data from the plant manager of the administration building. The plant\nmanager reported data regarding the occupation of the building by all personnel, even though\nsome individuals worked four days per week and others may have been shift workers. This\ninaccurate data led the company to temporarily include the location in its IMP in 2006 until the\ncompany gathered more accurate data.\nAfter reviewing all of the evidence, I find, with regard to the segment of the Sutter Pipeline near\nthe administrative building, Respondent has demonstrated the area was not an HCA.\nAccordingly, I withdraw the allegation of violation with respect to the Sutter Pipeline.\nBlack Mountain-Robbins Pipeline\nRespondent explained that it had not initially identified the Black Mountain-Robbins Pipeline\nsegment to be within an HCA because the nearby school building and playground were not\ninside the pipeline’s potential impact radius (PIR). Upon further consideration in February 2005,\nCPN determined that while the building and playground were not in the PIR, the perimeter\nfencing surrounding the school’s property fell within the PIR. Respondent updated its IMP to\ninclude the Black Mountain-Robbins Pipeline segment as soon as this information was\ndiscovered, approximately two months after the deadline in the regulation. Subsequently, at the\nhearing and in its Brief, Respondent declared that the Black Mountain-Robbins Pipeline now\nmeets the definition of a gathering line under § 192.8, and therefore the pipeline is no longer\ncovered by the company’s IMP.9\nWhile the Black Mountain-Robbins Pipeline may now meet the definition of a gathering line, in\n2004 Respondent considered the Black Mountain-Robbins Pipeline to be a transmission line.\nThe evidence demonstrates that Respondent had not recognized the school’s property was within\nthe transmission pipeline’s PIR, resulting in the company’s failure to identify an HCA.\nAccordingly, after reviewing all of the evidence, I find Respondent violated § 192.907(a) with\nregard to the Black Mountain-Robbins Pipeline by failing to identify an HCA by December 17,\n2004.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.937(b), which states:\n§ 192.937 What is a continual process of evaluation and assessment\nto maintain a pipeline’s integrity?\n(a) General. After completing the baseline integrity assessment of a\ncovered segment, an operator must continue to assess the line pipe of that\nsegment at the intervals specified in § 192.939 and periodically evaluate\nthe integrity of each covered pipeline segment as provided in paragraph\n(b) of this section . . . .\n9 Respondent points this out because the regulations in Subpart O, “Gas Transmission Pipeline Integrity\nManagement,” (§§ 192.901–192.951) apply only to gas transmission pipelines covered under Part 192. A pipeline\nthat is not a transmission line under § 192.3 (e.g., a gathering line) is not required to be included in the operator’s\nIMP. See also § 192.9, “What requirements apply to gathering lines?”\n\n\n\n6\n(b) Evaluation. An operator must conduct a periodic evaluation as\nfrequently as needed to assure the integrity of each covered segment. The\nperiodic evaluation must be based on a data integration and risk\nassessment of the entire pipeline as specified in § 192.917. For plastic\ntransmission pipelines, the periodic evaluation is based on the threat\nanalysis specified in [§] 192.917(d). For all other transmission pipelines,\nthe evaluation must consider the past and present integrity assessment\nresults, data integration and risk assessment information (§ 192.917), and\ndecisions about remediation (§ 192.933) and additional preventive and\nmitigative actions (§ 192.935). An operator must use the results from this\nevaluation to identify the threats specific to each covered segment and the\nrisk represented by these threats.\nThe Notice alleged that Respondent violated § 192.937(b) by failing to conduct periodic\nevaluations of covered pipeline segments as frequently as needed to assure the integrity of each\ncovered segment. Specifically, the Notice alleged that CPN had failed to define an appropriate\ninterval to ensure periodic integrity evaluations would be conducted as frequently as needed to\nassure pipeline integrity.\nIn its Response and at the hearing, Respondent contended that Section 6.3 of its IMP provided\nthat the company will conduct periodic evaluations and that the evaluations will consider the\nnecessary factors. Respondent’s procedure also stated that an “appropriate interval will be\nnot interpreted § 192.937(b) to require the establishment of periodic evaluation intervals prior to\ncompletion of the baseline assessments. Notwithstanding such objections, Respondent stated in\nits Brief that it had revised its procedures to specify annual evaluations.\nestablished . . . following completion of the baseline assessment.”10 CPN explained that it had\nSection 192.937 requires an operator to conduct periodic integrity evaluations of covered\npipeline segments “[a]fter completing the baseline integrity assessment of a covered\nsegment . . . .\n” The regulation does not establish a specific interval for conducting periodic\nevaluations, but, rather, requires the operator to conduct them “as frequently as needed” to assure\npipeline integrity. An operator must therefore define an appropriate interval based on the\nindividual factors of its pipeline segments. It is important to note, however, that operators are\nnot required to actually perform periodic integrity evaluations until after the baseline integrity\nassessments have been completed.\nThe OPS inspection of Respondent’s IMP occurred in January and February 2007,\napproximately 10 months prior to the first regulatory deadline for completing baseline\nI find the record does not contain a sufficient basis for finding CPN was required to already have\nassessments.11 Since Respondent was not then required to have completed baseline assessments,\nestablished intervals for performing periodic evaluations. Therefore, this item is withdrawn.\n10 Violation Report, Exhibit A, Item # 3A.\n11 Section 192.921(d) requires each operator to assess at least 50% of the covered segments beginning with the\nhighest risk segments by December 17, 2007, and to complete the baseline assessment of all covered segments by\nDecember 17, 2012.\n\n\n\n7\nItem 4A: The Notice alleged that Respondent violated 49 C.F.R. § 192.911(k), which states:\n§ 192.911 What are the elements of an integrity management\nprogram?\nAn operator’s initial integrity management program begins with a\nframework (see § 192.907) and evolves into a more detailed and\ncomprehensive integrity management program, as information is gained\nand incorporated into the program. An operator must make continual\nimprovements to its program. The initial program framework and\nsubsequent program must, at minimum, contain the following elements.\n(When indicated, refer to ASME/ANSI B31.8S (incorporated by\nreference, see § 192.7) for more detailed information on the listed\nelement.) . . . .\n(k) A management of change process as outlined in ASME/ANSI\nB31.8S, section 11.\nThe Notice alleged that Respondent violated § 192.911(k) by failing to include in its IMP a\nmanagement of change (MOC) process as outlined in ASME International (ASME) B31.8S,\nsection 11.12 Specifically, the Notice alleged that Respondent’s IMP process for MOC did not\nrequire interface with Respondent’s written operations and maintenance (O&M) procedures\npertaining to MOC.\n13\nIn its Response, Respondent indicated that Section 11.3 of its IMP stated: “The Company will\nuse existing MOC procedures to document changes to the Integrity Management Program.”14\nRespondent explained that all CPN personnel who use or refer to the IMP know that the phrase\n“existing MOC procedures” refers to the company’s O&M Procedures, Section #40, which is the\nonly MOC process Respondent has. Notwithstanding this objection, Respondent committed to\nrevising Section 11.3 of its IMP to include an explicit reference to the O&M procedures.\nSection 192.911(k) requires that an operator establish an MOC process for its IMP as outlined in\nASME B31.8S, section 11. If an operator relies on its O&M procedures to constitute compliance\nwith the integrity management MOC requirements, the operator must provide sufficient detail in\nthe IMP or a cross-reference to such procedures in order to comply with that requirement. While\nRespondent asserted in its Brief that a generic reference to “existing MOC procedures” was\nsufficient for CPN employees, I find such reference is not sufficient for purposes of compliance\nwith § 192.911(k), in part, because OPS cannot readily determine what those procedures are or\nwhere they might be located. I also question whether such a generic reference would ever be\nsufficient for employees, particularly new ones, and contractors who may not be familiar with\nRespondent’s O&M Manual.\n12 Section 11 of ASME B31.8S provides, in part, “Formal management of change procedures shall be developed in\norder to identify and consider the impact of changes to pipeline systems and their integrity . . . .”\n13 Notice at 4. In this context, “interface” refers to the interaction between separate written procedures developed\nby an operator, which may define the same or similar function.\n14 Response at 3.\n\n\n\n8\nAccordingly, I find that Respondent violated § 192.911(k) by failing to include in its IMP an\nMOC process as outlined in ASME B31.8S, section 11.\nItem 4B: The Notice alleged that Respondent violated § 192.911(k) by failing to include in its\nIMP an MOC process as outlined in ASME B31.8S, section 11. Specifically, the Notice alleged\nthat Respondent’s MOC process failed to require the company to evaluate procedural changes\nthat could impact or interface with the IMP.15\nIn its Response and Brief, CPN contended that its personnel understood any changes potentially\naffecting the IMP or integrity of a pipeline system must be evaluated through the MOC process.\nRespondent acknowledged, however, that this process was not specifically stated in its written\nprocedures. CPN committed to revising its MOC process to include evaluation of changes to\nprocedures that potentially impact or interface with the IMP.\nAfter considering all the evidence, I find that Respondent violated § 192.911(k) by failing to\nhave a written MOC process that required the evaluation of procedural changes that could\npotentially impact or interface with the IMP.\nItem 4C: The Notice alleged that Respondent violated § 192.911(k) by failing to have and\nfollow an MOC process as outlined in ASME B31.8S, section 11. Specifically, the Notice\nalleged Respondent failed to follow its MOC process for the installation of a low pressure switch\non the Road 17 Line Break Valve. The Notice alleged the applicable MOC process required\nRespondent to update its “piping and instrumentation diagram” to reflect installation of the low\npressure switch, but the company had documented the job was complete on its designated MOC\nform without updating the diagram. In addition, the Notice alleged Respondent’s MOC\nprocedure required the diagram to be updated to reflect the installation by February 28, 2007, but\nCPN personnel indicated during the OPS inspection that updates only occurred on a semi-annual\nbasis.\nIn its Response and at the hearing, Respondent explained that it followed its MOC procedures by\nmaking manual updates to the diagram by February 27, 2007, even though the designated MOC\nform did not require the company to record that the diagram had been updated. CPN also\nexplained that it regularly makes manual changes to these types of diagrams within a short\nperiod after a physical change occurs. The company has different, large wall-size overall system\nmaps and schematics (e.g., “engineered drawings”), which are updated by an outside engineering\nfirm on a semi-annual basis. According to Respondent, it is impractical to update the large\nsystem-wide maps as often as physical changes are made; therefore, manual updates to diagrams\nare completed usually within a month of the system change. CPN committed to clarifying this\ndistinction by revising its MOC process.\nUpon consideration of the evidence presented by Respondent that it manually documented the\ninstallation of a low pressure switch on the instrumentation diagram, I find the record does not\ncontain a sufficient basis to find Respondent violated § 192.911(k) by failing to follow\napplicable MOC procedures. Therefore, the allegation of violation is withdrawn.\n15 Section 11(b) of ASME B31.8S states, in part, “The operator shall recognize that system changes can require\nchanges in the integrity management program and, conversely, results from the program can cause system changes.”\n\n\n\n9\nNevertheless, the facts presented necessitate that I issue a warning.\n§ 190.205, Respondent is hereby advised to correct its MOC process to ensure compliance with\n§ 192.911(k) by clarifying the types of drawings required to be updated as part of the MOC\nprocess. Respondent should also improve its MOC form to require documentation of those\nupdates. CPN is hereby advised to ensure compliance with respect to this item. In the event\nOPS finds a violation of this item in a subsequent inspection, Respondent may be subject to\nfuture enforcement action.\n16 Pursuant to 49 C.F.R.\nThe findings of violation in Items 1A, 1B, 2, 4A, and 4B will be considered prior offenses in any\nsubsequent enforcement action taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to a civil penalty not to exceed $100,000 per\nviolation for each day of the violation up to a maximum of $1,000,000 for any related series of\nviolations.\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $40,000 for the violations of 49 C.F.R. §§\n192.947(d) (Item 1B), 192.907(a) (Item 2), and 192.911(k) (Item 4C).\nIn its Response and Brief, Respondent objected to the proposed civil penalties for several\nreasons. Respondent contended the gravity of the violations were minimal in that they did not\njeopardize the safety of the public; the company made a good faith effort to comply with the\nregulations, despite considerable ambiguities and subjectivity in the IMP regulations; CPN has\nno prior violations or civil penalties; and CPN did not realize any economic benefit. Respondent\nalso argued that the proposed civil penalties were based, at least in part, on erroneous and\nincomplete information contained in the Violation Report.\nI address gravity and good faith below for each specific Item. With regard to history of prior\noffenses, a civil penalty may be higher if an operator has a significant history of prior violations\n(the increase will be reflected in the proposed amount). In this case, there is an absence of prior\nviolations, but I do not find it warrants reducing the civil penalty where the other assessment\ncriteria, particularly nature, circumstances, and gravity, support the penalty amount.\n16 A “warning” is an allegation of a probable violation for which no civil penalty or compliance order has been\nissued. Pursuant to § 190.205, I may issue a warning to notify an operator of a probable violation and advise the\noperator to correct the condition or be subject to future enforcement action.\n\n\n\n10\nI did not consider economic benefit in this case. With regard to Respondent’s argument that\nerroneous information contained in the Violation Report factored into the proposed civil\npenalties, Respondent refers to Item 2 in the report, where there is reference to a pipeline\noperator that is not CPN. I acknowledge this error, but it appears to be nothing more than a\ntypographical error. There is no indication in the record that this error had any impact on the\namount of the proposed civil penalty for Item 2.\nItem 1B: The Notice proposed a civil penalty of $10,000 for the violation of 49 C.F.R.\n§ 192.947(d). As discussed above, I found that Respondent violated § 192.947(d) by failing to\nmaintain records that demonstrated Respondent’s IMP had been completed by December 17,\n2004.\nAt the hearing, and in its Brief, Respondent asserted that it had made a good faith effort to\ncomply with the regulation, despite a statement in the Violation Report that the company made\nno such effort. Respondent explained that it believed it had completed its IMP by December 17,\n2004, but the company simply did not understand that the regulation required so much\ndocumentation. Respondent also contended the gravity of the violation was minimal because it\ndid not jeopardize public safety.\nMaintaining documentation of compliance with the integrity management regulations is\nimportant to enable OPS to determine if a company is in compliance. Without such\ndocumentation, it is often difficult, if not impossible, for the Agency to identify issues of\nnoncompliance and order remediation to ensure public safety. Congress has recognized the\nimportance of maintaining proper documentation by explicitly requiring that every pipeline\noperator maintain and make available to OPS records and information “[t]o enable the Secretary\nto decide whether [the operator] is complying with this chapter and standards prescribed or\norders issued under this chapter . . . .”17\nEven though Respondent’s failure to maintain documentation, per se, may not have directly\nresulted in an increased risk to the operational integrity of its pipeline, the failure to comply with\na regulatory requirement is a violation for which the company is liable. While Respondent\nindicated the company made a good faith effort to comply with the regulation by completing the\nIMP before the deadline, the evidence provided by Respondent does not lead me to believe the\nIMP was actually completed by the deadline. That does present a safety risk. Accordingly, I\nfind mitigation of the civil penalty is not warranted.\nHaving reviewed the record and considered the assessment criteria, I assess Respondent a civil\npenalty of $10,000 for the violation of 49 C.F.R. § 192.947.\nItem 2: The Notice proposed a civil penalty of $20,000 for two separate violations of 49 C.F.R.\n§ 192.907(a). I have withdrawn the first allegation of violation regarding the Sutter Pipeline, but\nfound that Respondent violated § 192.907(a) with regard to the second allegation by failing to\nidentify an HCA in which the Black Mountain-Robbins Pipeline was located by December 17,\n2004.\n17 49 U.S.C. § 60117(b).\n\n\n\n11\nIn its Response, at the hearing, and in its Brief, CPN explained that it had discovered this error\nthrough its own internal verification process and updated its IMP with the correct HCA\nidentification as soon as the error was discovered, all within two months of the deadline.\nRespondent also self-disclosed this issue during the OPS inspection of Respondent.\nGiven that one of the alleged violations upon which the proposed penalty was based has been\nwithdrawn, and having reviewed the record and considered the assessment criteria for the\nremaining violation, including Respondent’s good faith effort to self-correct an error shortly after\nthe regulatory deadline, I reduce the civil penalty to $7,500.\nItem 4C: The Notice proposed a civil penalty of $10,000 for the alleged violation of 49 C.F.R.\n§ 192.911(k) pertaining to an alleged failure to document system changes on diagrams. Since\nthis allegation of violation has been withdrawn, the proposed civil penalty associated with this\nitem is not included.\nIn summary, having reviewed the record and considered the assessment criteria for all of the\nItems discussed above, I assess Respondent a total civil penalty of $17,500.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK 73125; (405) 954-8893.\nFailure to pay the $17,500 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a United\nStates District Court.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1A, 4A, and 4B in the Notice for\nviolations of 49 C.F.R. §§ 192.947(d) and 192.911(k), respectively. The Notice also proposed a\ncompliance order with respect to Item 3 for the alleged violation § 192.937(b), but since that\nallegation has been withdrawn, the associated compliance terms are also withdrawn.\nIn its Response, Respondent stated that it had no objection to the proposed compliance terms,\nexcept with respect to the proposed requirement in Item 1A that CPN resurvey its pipelines.\nRespondent contended that it had used a conservative approach to ensure no covered pipeline\nsegments would be excluded, and the tolerances inherent in the equipment would not have\nresulted in the misidentification of any HCAs.\n\n\n\n12\nI recognize the possibility that no HCAs were misidentified, but I find nothing in the record that\nshows conclusively that none were misidentified given the fact that the locating equipment had\ntolerances and inherent inaccuracies for which Respondent had not explicitly accounted for.\nGiven the work CPN has already done to locate its pipelines and populated areas, a complete\nresurvey may not be necessary in some areas; however, CPN must verify the correct\nidentification of all HCAs along its pipeline system given the tolerances of any equipment used.\nTherefore, the requirement to resurvey remains, except that Respondent may demonstrate\ncompliance with §§ 192.947(d) and 192.905 through alternative means, if such means are\nacceptable to the Director.\nUnder 49 U.S.C. § 60118(a), each person who engages in the transportation of gas by pipeline or\nwho owns or operates a gas pipeline facility is required to comply with the applicable safety\nstandards established under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance\nwith the pipeline safety regulations applicable to its operations. Respondent must—\n1. Identify the tolerances and inherent inaccuracies for each mapping and electronic\ninstrument used to locate and identify high consequence areas (HCAs) in accordance with\n§§ 192.947(d) and 192.905(a) (Item 1A). Demonstrate the accurate identification of all\nHCAs by resurveying the CPN pipeline system, or through alternative means subject to\nprior approval by the Director, using a factor that takes into account the identified\ntolerances and inherent inaccuracies. Develop a report that documents these actions and\nthat indicates any changes to HCA mileage as a result of the addition of the tolerance\nfactors.\n2. Develop management of change (MOC) procedures for CPN’s integrity management\nprogram (IMP) in accordance with § 192.911(k) and ASM","truncated":true,"body_characters":42249}