SILICON VALLEY POWER — Notice of Probable Violation

party submissionOfficial PDF520081001_operator response_01312008.pdf#

520081001_FinalOrder_03032010_text.pdf, page 1Official PDFMAR 3 2010 Ms. Jennifer Sparacino City Manager City of Santa Clara Silicon Valley Power 1500 Warburton Avenue Santa Clara, CA 95050 Re: CPF No. 5-2008-1001 Dear Ms. Sparacino: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and finds that Silicon Valley Power has completed the actions specified in the Notice to comply with the pipeline safety regulations. Therefore, this case is now closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Chris Hoidal, Director, Western Region, PHMSA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 9932]#

520081001_FinalOrder_03032010_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 ) ) Silicon Valley Power, ) CPF No. 5-2008-1001 ) Respondent. ) ______________________________) FINAL ORDER On August 13 to 16, 2007, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Silicon Valley Power (Respondent) in Santa Clara, California. Silicon Valley Power, the municipal electric utility for the City of Santa Clara, is the operator of the Donald Von Raesfeld Power Plant and an associated 2.5-mile-long natural gas transmission line.1 As a result of the inspection, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated January 3, 2008, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had violated 49 C.F.R. § 192.933(a) and proposed ordering Respondent to take certain measures to correct the alleged violation. The Notice also proposed finding that Respondent had committed certain other probable violations of 49 C.F.R. Part 192 and warning Respondent to take appropriate corrective action to address them or be subject to future enforcement action. Silicon Valley Power responded to the Notice by letter dated January 31, 2008 (Response). Respondent did not contest the allegations of violation and stated that it would comply with all of the terms in the proposed compliance order. Respondent did not request a hearing and therefore has waived its right to one. 1 http://www.siliconvalleypower.com/about/pico/ (accessed on Feb. 12, 2010).#

520081001_FinalOrder_03032010_text.pdf, page 32 FINDING OF VIOLATION In its Response, Silicon Valley Power did not contest the allegation in the Notice that it violated 49 C.F.R. Part 192, as follows: Item 3B: The Notice alleged that Respondent violated 49 C.F.R. § 192.933(a), which states, in relevant part: § 192.933 What actions must be taken to address integrity issues? (a) General requirements. An operator must take prompt action to address all anomalous conditions the operator discovers through the integrity assessment. In addressing all conditions, an operator must evaluate all anomalous conditions and remediate those that could reduce a pipeline's integrity. An operator must be able to demonstrate that the remediation of the condition will ensure the condition is unlikely to pose a threat to the integrity of the pipeline until the next reassessment of the covered segment. The Notice alleged that Respondent violated § 192.933(a) by failing to take prompt action to address anomalous conditions discovered through its integrity assessment. Specifically, Silicon Valley Power performed an inline inspection (ILI) tool run of its natural gas transmission line and the results demonstrated a corrosion anomaly with 36% wall thickness. The estimated corrosion growth rate for that area indicated that this condition should be repaired before the next 7-year reassessment interval, but that no such repair was scheduled or completed. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.933(a) by failing to take prompt action to address all anomalous conditions the operator discovers through the integrity assessment process. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 3B in the Notice for a violation of 49 C.F.R. § 192.933(a). 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. The Director has indicated that Respondent has taken the following actions specified in the proposed compliance order: 1. Respondent excavated all anomaly locations and remediated the alternating current interference that was causing the accelerated corrosion growth rate on its natural gas transmission line.#

520081001_FinalOrder_03032010_text.pdf, page 43 2. Respondent also performed a close interval survey and an alternating current voltage gradient survey of the entire line and remediated all areas of interference. Accordingly, I find that compliance has been achieved with respect to this violation. Therefore, the compliance terms proposed in the Notice are not included in this Order. WARNING ITEMS With respect to Items 1A, 2A, 3A, 4A, 4B, 4C, 5A and 6A, the Notice alleged probable violations of Part 192 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for: 49 C.F.R. §§ 192.947(d), 192.905(a) (Item 1A) ─ Respondent’s alleged failure to maintain a record of its method for determining each high consequence area (HCA); 49 C.F.R. § 192.907(a) (Item 2A) ─ Respondent’s alleged failure to provide documentation of its completion of its HCA identification; 49 C.F.R. § 192.933(b) (Item 3A) ─ Respondent’s alleged failure to evaluate and characterize anomalies within 180 days of discovery; 49 C.F.R. § 192.937(b) (Item 4A) ─ Respondent’s alleged failure to include ILI tool run data in its periodic integrity evaluations for purposes of detecting and remediating corrosion; 49 C.F.R. § 192.937(b) (Item 4B) ─ Respondent’s alleged failure to periodically integrate assessment results with other data in determining its periodic reassessment intervals; 49 C.F.R. § 192.937(a) (Item 4C) ─ Respondent’s alleged failure to establish an appropriate reassessment interval in light of the corrosion growth rates that existed on its natural gas transmission line; 49 C.F.R. § 192.945(a) (Item 5A) ─ Respondent’s alleged failure to track all threat specific metrics as prescribed in the applicable industry standard; and 49 C.F.R. §§ 192.911(l), 192.915(b) (Item 6A) ─ Respondent’s alleged failure to define or implement qualification requirements for personnel evaluating integrity assessment results.#

520081001_FinalOrder_03032010_text.pdf, page 54 Respondent presented information in its Response showing that it had taken certain actions to address the cited items. Accordingly, having considered such information, I find, pursuant to 49 C.F.R. § 190.205, that probable violations of 49 C.F.R. §§ 192.947(d), 192.905(a), 192.907(a), 192.933(b), 192.937(a)-(b), 192.945(a), 192.911(l), and 192.915(b) (Notice Items 1A, 2A, 3A, 4A, 4B, 4C, 5A and 6A ) have occurred and Respondent is hereby advised to correct such conditions. In the event that OPS finds a violation of these provisions in a subsequent inspection, Respondent may be subject to future enforcement action. The terms and conditions of this Final Order are effective upon receipt of service. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

520081001_nopv pco letter_01032008_text.pdf, page 1Official PDFgq To rpwlhPt. l+~~~ ~ -„ 1, . pc &py co t, i&crt o&itca g-. ~f @op;c. U. S Department of Transportation Pipeline and Hazardous Materials Safety Administration 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 NOTICE OF PROBABLE VIOLATION and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT RE UESTED January 3, 2008 Ms. Jennifer Sparacino Santa Clara City Manager Silicon Valley Power 1500 Warburton Avenue Santa Clara, CA 95050 CPF 5-2008-1001 Dear Ms. Sparacino: On August 13 through August 16, 2007, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your Integrity Management Program in Santa Clara, California. 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 violations are: $192. 947 What records must an operator keep? $192. 947 (d) Documents to support any decision, analysis and process developed and used to implement and evaluate each element of the baseline assessment plan and integrity management program. Documents include those developed and used in support of any identification, calculation, amendment, modification, justification,#

520081001_nopv pco letter_01032008_text.pdf, page 2deviation and determination made, and any action taken to implement and evaluate any of the program elements; $192. 905 (a) General. To determine which segments of an operator's transmission pipeline system are covered by this subpart, an operator must identify the high consequence areas. An operator must use method (1) or (2) from the definition in g 192. 903 to identify a high consequence area. An operator may apply one method to its entire pipeline system, or an operator may apply one method to individual portions of the pipeline system. An operator must describe in its integrity management program which method it is applying to each portion of the operator's pipeline system. The description must include the potential impact radius when utilized to establish a high consequence area. (See appendix E. I. for guidance on identifying high consequence areas. ) ~ Item 1A: $192. 947(d) & $192. 905 (a) Sihcon Valley Power (SVP) did not individually document the method used to determine each HCA. [A. Ol. b] Evidence: IMP Section 1. 4. 2. $192. 907 What must an operator do to implement this subpart? $192. 907 (a) General. No later than December 17, 2004, an operator of a covered pipeline segment must develop and follow a written integrity management program that contains all the elements described in g 192. 911 and that addresses the risks on each covered transmission pipeline segment. The initial integrity management program must consist, at a minimum, of a framework that describes the process for implementing each program element, how relevant decisions will be made and by whom, a time line for completing the work to implement the program element, and how information gained from experience will be continuously incorporated into the program. The framework will evolve into a more detailed and comprehensive program. An operator must make continual improvements to the program. ~ Item 2A: $192. 907(a) SVP did not provide documentation that they completed identification of HCAs by 12/17/2004. [A. o l. d] Evidence: 10/20/2004 Meeting Notes. 3. $192. 933 What actions must be taken to address integrity issues? (a) General requirements. An operator must take prompt action to address all anomalous conditions the operator discovers through the integrity assessment. In addressing all conditions, an operator must evaluate all anomalous conditions and#

520081001_nopv pco letter_01032008_text.pdf, page 3remediate those that could reduce a pipeline's integrity. An operator must be able to demonstrate that the remediation of the condition will ensure the condition is unlikely to pose a threat to the integrity of the pipeline until the next reassessment of the covered segment. (1) Temporary pressure reduction. If an operator is unable to respond within the time limits for certain conditions specified in this section, the operator must temporarily reduce the operating pressure of the pipeline or take other action that ensures the safety of the covered segment. An operator must determine any temporary reduction in operating pressure required by this sanction using ASME/ANSI B31G (incorporated by reference, see g 192. 7) or AGA Pipeline Research Committee Project PR-3-805 ("RSTRENG, " incorporated by reference, see g 192. 7) or reduce the operating pressure to a level not exceeding 80 percent of the level at the time the condition was discovered. (See appendix A to this part for information on availability of incorporation by reference information. ) An operator must notify PHMSA in accordance with g 192. 949 if it cannot meet the schedule for evaluation and remediation required under paragraph (c) of this section and cannot provide safety through temporary reduction in operating pressure or other action. An operator must also notify a State pipeline safety authority when either a covered segment is located in a State where PHMSA has an interstate agent agreement, or an intrastate covered segment is regulated by that State. (2) Long-term pressure reduction. When a pressure reduction exceeds 365 days, the operator must notify PHMSA under g 192. 949 and explain the reasons for the remediation delay. This notice must include a technical justification that the continued pressure reduction will not jeopardize the integrity of the pipeline. The operator also must notify a State pipeline safety authority when either a covered segment is located in a State where PHMSA has an interstate agent agreement, or an intrastate covered segment is regulated by that State. (b) Discovery of condition. Discovery of a condition occurs when an operator has adequate information about a condition to determine that the condition presents a potential threat to the integrity of the pipeline. A condition that presents a potential threat includes, but is not limited to, those conditions that require remediation or monitoring listed under paragraphs (d)(1) through (d)(3) of this section. An operator must promptly, but no later than 180 days after conducting an integrity assessment, obtain sufficient information about a condition to make that determination, unless the operator demonstrates that the 180-day period is impracticable. ~ Item 3A: $192. 933(b) Evaluation and characterization of anomahes indicated by the 12-inch in-hne inspection (ILI) assessment was not completed within the 180 days allowed for discovery. [E. 4. b] Evidence: Magpie ILI Report for 12" line.#

520081001_nopv pco letter_01032008_text.pdf, page 4~ Item 3B: $192. 933(a) No remediation was performed on the 36% indicated anomaly and none was scheduled before the next scheduled assessment in seven (7) years, although corrosion growth estimates indicate that a quicker response is needed [E. 4. c] Evidence: Magpie ILI report for the 12-inch line; 8/6/07 Remediation Schedule; 7/10/07 Risk Rank and Schedule. $192. 937 What is a continual process of evaluation and assessment to maintain a pipeline's integrity? (a) General. After completing the baseline integrity assessment of a covered segment, an operator must continue to assess the line pipe of that segment at the intervals specified in g 192. 939 and periodically evaluate the integrity of each covered pipeline segment as provided in paragraph (b) of this section. An operator must reassess a covered segment on which a prior assessment is credited as a baseline under g 192. 921(e) by no later than December 17, 2009. An operator must reassess a covered segment on which a baseline assessment is conducted during the baseline period specified in g 192. 921(d) by no later than seven years after the baseline assessment of that covered segment unless the evaluation under paragraph (b) of this section indicates earlier reassessment. (b) Evaluation. An operator must conduct a periodic evaluation as frequently as needed to assure the integrity of each covered segment. The periodic evaluation must be based on a data integration and risk assessment of the entire pipeline as specified in g 192. 917. For plastic transmission pipelines, the periodic evaluation is based on the threat analysis specified in g 192. 917(d) For all other transmission pipelines, the evaluation must consider the past and present integrity assessment results, data integration and risk assessment information (g 192. 917), and decisions about remediation (g 192. 933) and additional preventive and mitigative actions (g 192. 935). An operator must use the results from this evaluation to identify the threats specific to each covered segment and the risk represented by these threats. ~ Item 4A: $192. 937(b) SVP's periodic evaluation of integrity did not include integration of ILI results with other information to help determine the cause of corrosion found on the 12-inch and 6- inch lines and support decisions on remediation. [F. Ol. a] Evidence: IMP section 6. 3; Magpie ILI Reports; No evidence of data integration with ILI results. ~ Item 4B: $192. 937(b)#

520081001_nopv pco letter_01032008_text.pdf, page 5SVP's periodic evaluations have not adequately integrated assessment results with other data to estabhsh reassessment schedules. [F. O l. b] Evidence: IMP section 6. 3; Magpie ILI Reports; No evidence of data integration with ILI results. ~ Item 4C: $192. 937(a) A seven-year reassessment interval for the 6-inch and 12-inch lines is not technically supported, given the rapid corrosion indicated in the ILI reports. [F. 04. e] Evidence: No basis provided for seven (7) year assessment interval, Risk Rank and Schedule. 5. $192. 945 What methods must an operator use to measure program effectiveness? (a) General. An operator must include in its integrity management program methods to measure, on a semi-annual basis, whether the program is effective in assessing and evaluating the integrity of each covered pipeline segment and in protecting the high consequence areas. These measures must include the four overall performance measures specified in ASME/ANSI B31. 8S (incorporated by reference, see $192. 7), section 9. 4, and the specific measures for each identified threat specified in ASME/ANSI B31. 8S, Appendix A. An operator must submit the four overall performance measures, by electronic or other means, on a semi-annual frequency to OPS in accordance with $192. 951. An operator must submit its first report on overall performance measures by August 31, 2004. Thereafter, the performance measures must be complete through June 30 and December 31 of each year and must be submitted within 2 months after those dates. ~ Item 5A: $192. 945(a) SVP did not track all threat specific metrics from Table 9 of ASME B31. 8S-2004. [I. ol. b] Evidence: Performance Measures Spreadsheet; IMP Element ¹9. 6. $192. 911 What are the elements of an integrity management program? An operator's initial integrity management program begins with a framework (see g 192. 907) and evolves into a more detailed and comprehensive integrity management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31. 8S (ibr, see g 192. 7) for more detailed information on the listed element. ) (a) An . . .#

520081001_nopv pco letter_01032008_text.pdf, page 6(I) A quality assurance process as outlined in ASME/ANSI B31. 8S, section 12. ASME B31. 8S-2001, section 12. 2 Quality Management Control. (b) Specifically, activities that should be included in the quality control program are as follows: (4) The people involved in the integrity management program shall be competent, aware of the program and all of its activities and shall be properly trained to execute the activities within the program. Documentation of such competence, awareness and qualification, and the processes for their achievement, shall be part of the quality control plan. $192. 915 (b) Persons who carry out assessments and evaluate assessment results. The integrity management program must provide criteria for the qualification of any person— (1) Who conducts an integrity assessment allowed under this subpart; or (2) Who reviews and analyzes the results from an integrity assessment and evaluation; or (3) Who makes decisions on actions to be taken based on these assessments. ~ Item 6A: $192. 911(l), ASME B31. 8S-2001, section 12. 2(b)(4), $192. 915 (b) SVP did not define nor implement qualification requirements for personnel evaluating integrity assessment results. [L. 02. b] Evidence: IMP Element ¹12, Appendix ¹12A; IMP Team quahfications spreadsheet; QA Plan Roles and Responsibilities Summary. Pro osed Com liance Order Pursuant to 49 United States Code f 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Silicon Valley Power. Please refer to the Proposed Compliance Order that is enclosed and made a part of this Notice. Warnin Items With respect to item(s) 1A, 2A, 3A, 4A, 4B, 4C, 5A and 6A, 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 items. Be advised that failure to do so may result in Sihcon Valley Power being subject to additional enforcement action.#

520081001_nopv pco letter_01032008_text.pdf, page 7Res onse to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U. S. C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe quahfy for confidential treatment redacted and an explanation of why you believe the redacted information quahfies 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 5-2008-1001 and for each document you submit, please provide a copy in electronic format whenever possible. Sin rely, Chris oidal Director, Western Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 J. Gilliam (¹118623) Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings#

520081001_nopv pco letter_01032008_text.pdf, page 8PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code $ 60118, the Pipeline and Hazardous Materials Safety Admmistration (PHMSA) proposes to issue to Silicon Valley Power a Compliance Order incorporating the following remedial requirements to ensure the compliance of Silicon Valley Power with the pipeline safety regulations: In regard to Item Number 3B of the Notice pertaming to remediation of anomahes with accelerated corrosion growth rates that would require reassessment to be performed prior to the seven (7) year reassessment interval, Silicon Valley Power must reassess the six-inch (6") high pressure dehvery pipehne using ILI. Silicon Valley Power must calculate the corrosion growth rate for each anomaly found to exist on the pipeline with a depth greater than five percent (5%) through wall measurement or a length greater than one (1) inch in any direction. Furthermore, Silicon Valley Power must provide a report with the following: a. Each anomaly and its disposition in regard to remediation or monitored status. b. Future assessment and monitoring plans for this pipehne after completing remediation of this current assessment. c. Detail description as to the cause and remediation of the accelerated corrosion mechanism(s). Sihcon Valley Power must complete the work withm one (1) year of receipt of the Final Order. Silicon Valley Power shall maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Chris Hoidal, Director, Western Region, Pipeline and Hazardous Materials Safety Administration. Costs shall be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure.#