TUSCARORA GAS TRANSMISSION COMPANY — Warning Letter

520081008w_warning letter_12032008_text.pdf, page 1Official PDFU. S, Department of Tf'GrisportQtlori Piipellmne and Hazardovs Materiialls Safety Admi1niistitahon 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 WA~IXG KKTTKR December 3, 2008 Mr Ross T. Parker Regional Director, US Operations TransCanada 1400 SW 5" Avenue, Suite 900 Portland, OR 97201 CPF 5-2008-1 0M& Dear Mr Parker Between March and June of 2008, a representative of the Pipehne and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected your Gas Transmission Northwest (GTN) and Tuscarora Pipeline Systems in the States of Idaho, Oregon, Cahfornia, and Nevada As a result of the inspection, it appears that you have committed violations of the Pipehne Safety Regulations, Title 49, Code of Federal Regulations The items inspected and the probable violations are#

520081008w_warning letter_12032008_text.pdf, page 2At the West Klamath tap, GTN utihzes "worker" and "momtor" regulators to control dehvery pressure to the Avista Gas Company, a local distribution company There are two parallel runs of worker and monitor pressure regulators at the West Iklamath Tap At the time of mspection, the pressure sensing hnes for all four regulators were installed mto one tap on the downstream lower pressure pipe hne Because a failure of the single tap would disable all pressure regulation, the described installation of the downstream pressure sensing hnes is a violation of Section 192 199(g) The GTN and Tuscarora systems both have pipehne segments that parallel high-voltage power hnes These segments did have mitigation systems in place to reduce the harmful effects of mduced AC Voltage on the pipeline However, GTN and Tuscarora do not regularly monitor and record AC pipe-to-soil potentials (P/S) m these areas to ensure the AC mitigation systems were effective Durnig the mspection of the Tuscarora system, our mspector witnessed and recorded the following AC P/S readmgs on the mainhne. MP 147. 3 — 15. 8 Volts, MP 145 9 — 10 6 Volts, MP 40 0 - 34 Volts, and MP 41 3 — 27 Volts For the GTN system, there was one area at MP 18 2 on the Coyote lateral that revealed elevated AC Voltage readings at 10 Volts These voltage levels mdicate the presence of potentially damaging interference currents (a) Flammable or combustible materials in quantities beyond those required for everyday use, or othe&. than those normally used in conipressor buildings, must be sto~ed a safe distance from the compressor building. At GTN's Bend compressor station, there were combustible box and pallet materials stored inside the compressor building These combustibles were not required for everyday use Under 49 Umted States Code, ) 60122, you are subject to a civil penalty not to exceed $100, 000- for each violation for each day the violation persists up to a maximum of $1, 000, 000 for any related series of violations We have reviewed the circumstances and supporting documents mvolved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedmgs at this time We advise you to correct the item(s) identified in this letter Failure to do so will result in TransCanada being subject to additional enforcement actloll#

520081008w_warning letter_12032008_text.pdf, page 3No reply to this letter is required If you choose to reply, in your correspondence please refer to CPF 5-2OO8-1OO8W. Be advised that all material you submit in response to this enforcement action is subject to bemg made publicly available If you beheve that any portion of your responsive material quahfies 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 beheve 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) C is Hoidal Director, Western Region Pipehne and Hazardous Materials Safety Administration cc PHP-60 Comphance Registry PHP-500, C Allen (0120797, 0120800, 4121745)#