{"operation":"document","citation":"CPF 520160004","title":"CITY OF SUSANVILLE — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-06-07","effective_on":null,"summary":"CLOSED notice of probable violation citing 191.17(a), 191.22(c), 191.29, 192.611(d), 192.615(b)(3), 192.63, 192.805, 192.907(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520160004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520160004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520160004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520160004","body":"Notice of Probable Violation involving CITY OF SUSANVILLE. PHMSA's enforcement data identifies the cited regulations as 191.17(a),  191.22(c),  191.29,  192.611(d),  192.615(b)(3),  192.63,  192.805,  192.907(a). The case was opened on 2016-06-07 and is reported as closed as of 2020-01-13. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520160004_Closure Letter_01132020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Closure%20Letter_01132020.pdf\n\n520160004_Closure Letter_01132020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Closure%20Letter_01132020_text.pdf\n\n520160004_Decision on Petition for Reconsideration_06272019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Decision%20on%20Petition%20for%20Reconsideration_06272019.pdf\n\n520160004_Decision on Petition for Reconsideration_06272019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Decision%20on%20Petition%20for%20Reconsideration_06272019_text.pdf\n\n520160004_Final Order_06012018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Final%20Order_06012018.pdf\n\n520160004_Final Order_06012018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Final%20Order_06012018_text.pdf\n\n520160004_NOPV PCO_06072016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_NOPV%20PCO_06072016.pdf\n\n520160004_NOPV PCO_06072016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_NOPV%20PCO_06072016_text.pdf\n\n520160004_Operator Petition For Reconsideration_06192018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Operator%20Petition%20For%20Reconsideration_06192018.pdf\n\n520160004_Operator Pre-Hearing Submission_12292016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Operator%20Pre-Hearing%20Submission_12292016.pdf\n\n520160004_Operator Response to Notice and Request for Hearing_07122016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520160004/520160004_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing_07122016.pdf\n\n520160004_Decision on Petition for Reconsideration_06272019_text.pdf\n\nJune 27, 2019\nMr. Dan Newton\nPublic Works Director\nCity of Susanville\n720 South Street\nSusanville, California 96130\nRe: CPF No. 5-2016-0004\nDear Mr. Newton:\nEnclosed please find the Decision on Reconsideration issued in the above-referenced case. It\ndenies your Petition for Reconsideration. Service of the Decision by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\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 )\nCity of Susanville, California, ) CPF No. 5-2016-0004\na municipal corporation, )\n)\n)\n)\nPetitioner. )\n____________________________________)\nDECISION ON RECONSIDERATION\nIn a June 1, 2018 Final Order, I found that the City of Susanville (Susanville) had committed one\nviolation of 49 C.F.R. Part 191 and three violations of Part 192 following an inspection by the\nOffice of Pipeline Safety (OPS) of a 6-inch diameter, 10-mile long gas pipeline operated by\nSusanville.1 I ordered Susanville to take certain measures to correct these four violations and\nissued a warning for four other probable violations.\nOn June 19, 2018, Susanville submitted a Petition for Reconsideration (Petition) of the Final\nOrder.2 The Petition questioned three aspects of the Final Order and requested that PHMSA\nreconsider its findings.3\nBecause the evidence of record supports the findings in question, I am denying the Petition and\naffirming the Final Order without modification.\nBackground\nFollowing a December 2015 onsite pipeline safety inspection of Respondent’s facilities and\nrecords in Susanville, California by OPS, on June 7, 2016, the Director, Western Region, OPS\n(Director) issued a Notice of Probable Violation and Proposed Compliance Order (Notice) to\nSusanville, which also included a warning.4 In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Susanville had committed one violation of 49 C.F.R. Part 191, seven\n1 City of Susanville, Final Order, CPF No. 5-2016-0004 (June 1, 2018) (Final Order).\n2 One-page letter from Mr. Daniel Gibbs, PE, Acting Public Works Director, City of Susanville to Mr. Alan K.\nMayberry, Associate Administrator for Pipeline Safety, PHMSA, dated June 19, 2018 (Petition).\n3 Id.\n4 Notice of Probable Violation and Proposed Compliance Order, CPF No. 5-2016-0004 (June 7, 2016).\n\n\n\nCPF No. 5-2016-0004\nPage 2\nviolations of Part 192, proposed ordering Susanville to take certain measures to correct four of\nthe alleged violations and that a warning be issued for four other probable violations.5\nSusanville responded to the Notice by letter dated July 12, 2016, as supplemented by letter dated\nDecember 29, 2016. Susanville contested the allegations and requested a hearing. A hearing\nwas subsequently held on January 11, 2017, in Lakewood, Colorado before a PHMSA Presiding\nOfficial.\nOn June 1, 2018, I issued a Final Order that sustained all four of the findings of violation\nproposed in the Notice. Specifically, I found that the 6-inch diameter pipeline operated by\nSusanville was properly classified as a transmission line under two different prongs of the\nregulatory definition of a transmission line, either of which renders it a transmission line, and\nthat Susanville had an obligation to comply with the regulatory requirements for transmission\nlines. Susanville acknowledged that if the pipeline were determined to be a transmission line,\nthe facts as alleged in the Notice established the cited violations. Accordingly, I found that\nPetitioner had violated §§ 191.17(a), 192.907(a), 192.611(d), and 192.805 as alleged in the\nNotice, ordered Susanville to take certain measures to correct these four violations, and issued a\nwarning for four other probable violations.\nOn June 19, 2018, Susanville submitted this Petition requesting reconsideration of the Final\nOrder’s determination that the pipeline was properly classified as a transmission line.\nStandard of Review\nUnder 49 C.F.R. § 190.243, a respondent is afforded the right to petition the Associate\nAdministrator for reconsideration of a final order. However, that right is not an appeal or an\nopportunity to seek a de novo review of the record.6 It is a venue for presenting the Associate\nAdministrator with information that was not previously available or requesting that any errors in\nthe final order be corrected. Requests for consideration of additional facts or arguments must be\nsupported by a statement of reasons as to why those facts or arguments were not presented prior\nto the issuance of the final order. Repetitious information or arguments will not be considered.\nAnalysis\nIn its Petition, Susanville raised three issues for reconsideration relating to the determination that\nthe 6-inch diameter, 10-mile pipeline it operates is properly classified as a transmission line.\nFirst, Susanville contends that it did not have the opportunity to address the relevance of the\nregulatory term “large volume customer” in the proceeding. Second, Susanville expressed the\nconcern that a 2016 Notice of Proposed Rulemaking (NPRM) raised by Susanville in its\n5 OPS simultaneously issued a Notice of Amendment (NOA) proposing to require Susanville to amend certain of its\nwritten operating and maintenance procedures. Notice of Amendment, CPF No. 5-2016-0005M (June 7, 2016). An\nOrder Directing Amendment for that proceeding was issued simultaneously with the Final Order for which\nSusanville also filed a Petition for Reconsideration. A Decision on Reconsideration for that Petition is being issued\nsimultaneously with this decision.\n6 49 C.F.R. § 190.243(a)-(d).\n\n\n\nCPF No. 5-2016-0004\nPage 3\nResponse and during the hearing was not sufficiently considered in support of its arguments.\nThird, Susanville questioned whether the location where its large volume customers were\nconnected to the pipeline may constitute a connection or branch that would warrant changing the\ntransmission line classification to distribution line for the portion of the pipeline extending\nbetween that location and the Susanville City Gate station. I will discuss each in turn.\nWith respect to the first issue, Susanville contends that it did not have the opportunity to address\nthe relevance of the regulatory term “large volume customer” in the proceeding. As discussed\nduring the hearing, however, this term is a significant aspect of the applicability of the definition\nof a transmission line in a scenario where one or more large volume customers are present. I\nreached the following conclusions in the Final Order as to how the large volume customer\nprovision impacted the classification of the pipeline:\nThe terms Distribution line and Transmission line are defined in 49 C.F.R.\n§ 192.3 as follows:\nDistribution line means a pipeline other than a gathering or\ntransmission line.\nTransmission line means a pipeline, other than a gathering\nline, that: (1) Transports gas from a gathering line or storage\nfacility to a distribution center, storage facility, or large\nvolume customer that is not down-stream from a distribution\ncenter; (2) operates at a hoop stress of 20 percent or more of\nSMYS; or (3) transports gas within a storage field.\nNote: A large volume customer may receive similar volumes\nof gas as a distribution center, and includes factories, power\nplants, and institutional users of gas.\nA pipeline meets the regulatory definition of a transmission line if meets\nany one of the three prongs set forth in the definition. OPS contended that\nthe pipeline was a transmission line because it met two of the three prongs.\nOPS stated that the pipeline met the first prong in that it transported gas to\na large volume customer that is not down-stream from a distribution center,\nand met the second prong in that it operates at a hoop stress of 20 percent\nor more of specified minimum yield strength (SMYS). Susanville disagreed\nwith OPS and argued that neither of the two prongs OPS pointed to were\nmet. In making my determination, I will apply these two prongs of the\ndefinition to Susanville’s pipeline separately.\nFirst Prong. The first prong involves a determination on whether the\npipeline transports gas to a large volume customer that is not down-stream\nfrom a distribution center.\nThe line serves a power plant and a state correctional facility upstream of\nthe City Gate. It is well settled that lateral pipelines that extend from\n\n\n\nCPF No. 5-2016-0004\nPage 4\nanother transmission line to a large volume customer or distribution center\nsuch as a town gate station are transmission lines.7 The transmission line\ndefinition explicitly states that large volume customers include power plants\nand institutional users of gas.8 Respondent further argued that it does not\nconsider the power plant and correctional facility as customers because they\ndo not purchase gas from the City of Susanville. Although Respondent does\nnot sell gas to its large volume customers, it sells a service to them.\nSpecifically, Respondent is paid to transport gas from the Tuscarora\nPipeline Company to the prison and power plant. Therefore, the prison and\nthe power plant are customers of the City of Susanville.9\nPetitioner and OPS had a thorough exchange concerning the transmission line definition\nincluding the large volume customer aspect of the definition. Nothing impeded Susanville from\nmaking its arguments in this area in the course of the proceeding and it did so.10 Moreover,\nSusanville did not take the opportunity to use its Petition to provide any factual information or\nlegal arguments bearing on the definition that it believes it did not provide at an earlier stage of\nthis proceeding.\nWith respect to the second issue, Susanville expressed the concern that the 2016 NPRM raised\nby Susanville in its Response and during the hearing was not sufficiently considered in support\nof its arguments. Susanville raised this NPRM in connection with the applicability of the term\n“distribution center” which is not defined in the regulations (notably, the NPRM has not become\na Final Rule). The Final Order discussed this portion of the NPRM in the following manner:\nSusanville also argued that the power plant and the correctional facility were\ndownstream of a “distribution center” which, if correct, would negate a\ntransmission line designation under this prong of the definition. Section\n192.3 does not contain a definition of a distribution center, but the term is\ngenerally understood to mean the point where an incoming gas pipeline\nbranches into a lower pressure network of distribution lines that provide gas\nservice to customers.11 Respondent further argued that it believed its\nposition was supported by a Notice of Proposed Rulemaking (NPRM)\nissued by PHMSA in 2016 that proposed adding a definition of distribution\n7 See, e.g., Southern Star Central Gas Pipeline, Inc., Final Order, CPF No. 3-2008-1005 (Oct. 21, 2011).\n8 In a prior PHMSA Letter of Interpretation, the agency stated that “. . . the maintenance and operating requirements\nfor a pipeline supplying a power plant are consistent with other transmission pipelines, not service lines in a\ndistribution system. PHMSA Interpretation No. 09-0022 (Mar. 8, 2010).\n9 During the hearing, Respondent also noted that the definition of transmission line uses the singular term “large\nvolume customer,” while its line serves two large volume customers. However, the rules of regulatory construction\nat § 192.15(b)(1) state that “in this part, words importing the singular include the plural.”\n10 Letters from Mr. Dan Newton, PE, to Mr. Larry White, Presiding Official, PHMSA, and Mr. Chris Hoidal,\nDirector, Western Region, PHMSA, dated December 29, 2016 and February 21, 2017.\n11 Letter from Edward J. Ondak, Director, Office of Pipeline Safety, to David Sinclair, Vice President of\nOperations, Enstar Natural Gas Company, CPF No. 58014W, 1998 WL 35166442 (Aug. 21, 1998).\n\n\n\nCPF No. 5-2016-0004\nPage 5\ncenter to § 192.3.12 This NPRM proposed defining a distribution center as\na location where “gas volumes are either metered or have pressure or\nvolume reductions prior to delivery to customers.” However, this proposed\ndefinition appears to refer to typical gas utility customers such as homes\nand businesses because it did not use the term large volume customers. The\nproposition that the word “customers” in this proposed definition of\n“distribution center” should include large volume customers would be\ninconsistent with the longstanding regulatory definition of “transmission\nline” which expressly includes lines serving large volume customers. In\nany event this NPRM has not become a final rule. In this instance, the\nlocation where a network of distribution lines that serves as the distribution\ncenter delivering gas service to customers is the Susanville City Gate station\nat the downstream end of the 10-mile segment. Therefore, Respondent’s\npipeline serves two large volume customers that are not downstream from\na distribution center and the first prong is met.\nSusanville also raised the NPRM in connection with arguing whether the established maximum\nallowable operating pressure (MAOP), not the current actual operating pressure, is used for\nregulatory classification purposes. The Final Order discussed this portion of the NPRM in the\nfollowing manner:\nPrior PHMSA pipeline enforcement proceedings and interpretations make\nit clear that the established MAOP, not the current actual operating pressure,\nis used for regulatory classification purposes.13 For example, PHMSA\nissued an Interpretation Letter stating that a pipeline that delivered gas to a\nlarge volume customer qualified as a transmission line despite the fact that\nthe pipeline actually operated at less than 20% of SMYS.14 If actual\noperating pressure could be used, there would be nothing stopping an\noperator from easily configuring its line to raise the pressure as high as the\nestablished MAOP at times and lower it at other times causing uncertainty\nin the classification and affecting the applicability of various maintenance\nrequirements. Thus, for purposes of classification as a line that operates\nabove or below 20 percent SMYS, operators must use the established\nMAOP for the pipeline when determining the hoop stress. If an operator\nwants to de-rate or lower its MAOP for whatever reason, it would need to\nbe done in a permanent manner reflected in its written procedures and\ndesign plans.\nWith regard to Respondent’s argument that its position was supported by\nthe NPRM issued by PHMSA in 2016, the preamble reveals that the impetus\n12 Pipeline Safety: Safety of Gas Transmission and Gathering Lines, (81 Fed. Reg. 20807). This NPRM has not\nbecome a final rule.\n13 See, e.g., Breitburn Energy Partners, LP, Final Order, CPF No. 5-2009-0008 (Apr. 2, 2012).\n14 PHMSA Interp. No. 01-0102 (Feb. 15, 2001).\n\n\n\nCPF No. 5-2016-0004\nPage 6\nfor proposing a change to the Transmission line definition was to address\nthe demarcation between transmission and gathering lines, not between\ntransmission and distribution lines.15 While the NPRM was silent on the\nreason for this particular proposed change to this prong (i.e., replacing\n“operates at…” with the term MAOP), if anything the absence of discussion\nimplies that this was a clarification to existing policy and practice as\nopposed to being needed to drive a significant change in behavior.\nTherefore, Respondent’s pipeline operates at a hoop stress above 20 percent\nSMYS for purposes of classification and the second prong in the definition\nof transmission line is met.\nThe Petition does not provide any explanation or argument as to what, if anything, about the\nanalysis in the Final Order of the NPRM content was erroneous. I fully considered Susanville’s\narguments citing the NPRM and found them unpersuasive for the reasons stated in the Final\nOrder. There is nothing in the Petition that would warrant a change in this conclusion. If a\nfuture rulemaking proceeding in this area becomes final and takes effect, Susanville can\nsubsequently request that OPS review the classification of its pipeline under that future\nregulation. Like any enforcement case, however, I must decide this case under the existing\nregulations.\nWith respect to the third issue, Susanville questioned whether the location where its large\nvolume customers were connected to the pipeline may constitute a connection or branch that\nwould warrant changing the transmission line classification to distribution line for the portion of\nthe pipeline extending between that location and the Susanville City Gate station. Presumably,\nSusanville is conceding that the portion of the 10-mile pipeline upstream of the large volume\ncustomers is a transmission line, but would argue that this does not mean the portion downstream\nof that point could not be a distribution line. Susanville, however, did not present facts in its\nPetition that would establish that the location where the large volume customers received gas\nwas a distribution center. Even if Susanville had attempted to do so, this argument would\npresumably be negated by the second prong of the definition of a transmission line which\ninvolves a determination on whether the pipeline operates at a hoop stress of 20 percent or more\nof specified minimum yield strength (SMYS).16 The established MAOP of the pipeline currently\napplies to its entire length. Susanville did not provide any documentation or evidence that it has\ntaken any steps to permanently de-rate the MAOP of the portion of the pipeline downstream\nfrom the large volume customers during the proceeding or in connection with its Petition.\n15 Pipeline Safety: Safety of Gas Transmission and Gathering Lines, (81 Fed. Reg. 20807). This NPRM has not\nbecome a final rule.\n16 Final Order at 4-5.\n\n\n\nCPF No. 5-2016-0004\nPage 7\nRELIEF DENIED\nBased on the information provided in the Petition, a review of the record, and for the reasons\nstated above, I am affirming the Final Order without modification.\nThis Decision is the final administrative action in this proceeding.\nJune 27, 2019\n_____________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520160004_Final Order_06012018_text.pdf\n\nJune 1, 2018\nMr. Dan Newton\nPublic Works Director\nCity of Susanville\n720 South Street\nSusanville, CA 96130\nRe: CPF No. 5-2016-0004\nDear Mr. Newton:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken by the City of Susanville to comply with the\npipeline safety regulations. When the terms of the compliance order have been completed, as\ndetermined by the Director, Western Region, this enforcement action will be closed. Service of\nthe Final Order by certified mail is effective upon the date of mailing as provided under\n49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Director, Western Region, Office of Pipeline Safety, PHMSA\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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 )\nCity of Susanville, ) CPF No. 5-2016-0004\na municipal corporation, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn December 15-17, 2015, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of the City of\nSusanville (Susanville or Respondent) in Susanville, California. Susanville operates a 6-inch\ndiameter gas pipeline approximately 10 miles in length along with the city’s gas distribution\nsystem.1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated June 7, 2016, a Notice of Probable Violation and Proposed\nCompliance Order (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that the City of Susanville had\ncommitted eight violations of 49 C.F.R. Part 192 and proposed ordering Respondent to take\ncertain measures to correct four of the alleged violations. The warning items required no further\naction, but warned Respondent to correct the alleged violations or face possible enforcement\naction.2\nSusanville responded to the Notice by letter dated July 12, 2016, as supplemented by letter dated\nDecember 29, 2016 (Response). Susanville contested the allegations on legal grounds and\nrequested a hearing. A hearing was subsequently held on January 11, 2017 in Lakewood,\nColorado, with an attorney from the Office of Chief Counsel, PHMSA, presiding. After the\nhearing, Respondent provided a post-hearing submission for the record, by letter dated February\n21, 2017 (Closing).\n1 Pipeline Safety Violation Report (Violation Report), (May 15, 2015) (on file with PHMSA), at 1.\n2 OPS simultaneously issued a Notice of Amendment (NOA) proposing to require Susanville to amend certain of its\nwritten operating and maintenance procedures (CPF No. 5-2016-0005M). An Order Directing Amendment for that\nproceeding is being issued simultaneously with this Final Order.\n\n\n\nCPF No. 5-2016-0004\nPage 2\nCLASSIFICATION OF RESPONDENT’S PIPELINE\nSusanville operates a 6-inch diameter pipeline that transports natural gas approximately 10 miles\nfrom the Tuscarora Gas Transmission Company (Tuscarora) custody transfer point (at corner of\nChappius Lane and Lassen County Road A27) to the City Gate station (corner of A27 and San\nFrancisco Street). The pipeline is constructed of grade X42 steel pipe with a 0.212-inch wall\nthickness. It has an established maximum allowable operating pressure (MAOP) of 1000 psi and\nnormally operates at approximately 350 psi. The line serves a power plant and a state\ncorrectional facility upstream of the City Gate.\nThe alleged violations in the Notice are based on a determination by OPS that the subject\npipeline was a transmission pipeline subject to the Part 192 requirements for transmission\npipelines. At the hearing, OPS explained that it had informed Susanville during inspections\nconducted in the 2011-2012 period that the line was a transmission line. On March 12, 2015,\nSusanville also received a written interpretation from PHMSA pursuant to its request under\n§ 190.11 determining that the subject pipeline was a transmission line.3\nIn its Response and at the hearing, Susanville contested the Notice, contending that the pipeline\nis not a transmission line, but rather is a distribution main line. The parties agree that all of the\nalleged violations in the Notice rest on this single issue: whether the subject pipeline is a\ndistribution line or a transmission line.\nAnalysis\nThe terms Distribution line and Transmission line are defined in 49 C.F.R. § 192.3 as follows:\nDistribution line means a pipeline other than a gathering or\ntransmission line.\nTransmission line means a pipeline, other than a gathering line, that:\n(1) Transports gas from a gathering line or storage facility to a\ndistribution center, storage facility, or large volume customer that is\nnot down-stream from a distribution center; (2) operates at a hoop\nstress of 20 percent or more of SMYS; or (3) transports gas within\na storage field.\nNote: A large volume customer may receive similar volumes of gas\nas a distribution center, and includes factories, power plants, and\ninstitutional users of gas.\nA pipeline meets the regulatory definition of a transmission line if it meets any one of the three\nprongs set forth in the definition. OPS contended that the pipeline was a transmission line\nbecause it met two of the three prongs. OPS stated that the pipeline met the first prong in that it\ntransported gas to a large volume customer that is not down-stream from a distribution center,\nand met the second prong in that it operates at a hoop stress of 20 percent or more of specified\nminimum yield strength (SMYS). Susanville disagreed with OPS and argued that neither of the\n3 PHMSA Interp. No. 13-0010 (Mar. 12, 2015).\n\n\n\nCPF No. 5-2016-0004\nPage 3\ntwo prongs OPS pointed to were met. In making my determination, I will apply these two\nprongs of the definition to Susanville’s pipeline separately.\nFirst Prong. The first prong involves a determination on whether the pipeline transports gas to a\nlarge volume customer that is not down-stream from a distribution center.\nThe line serves a power plant and a state correctional facility upstream of the City Gate. It is\nwell settled that lateral pipelines that extend from another transmission line to a large volume\ncustomer or distribution center such as a town gate station are transmission lines.4 The\ntransmission line definition explicitly states that large volume customers include power plants\nand institutional users of gas.5 Respondent further argued that it does not consider the power\nplant and correctional facility as customers because they do not purchase gas from the City of\nSusanville. Although Respondent does not sell gas to its large volume customers, it sells a\nservice to them. Specifically, Respondent is paid to transport gas from the Tuscarora Pipeline to\nthe prison and power plant. Therefore, the prison and the power plant are customers of the City\nof Susanville.6\nSusanville also argued that the power plant and the correctional facility were downstream of a\n“distribution center” which, if correct, would negate a transmission line designation under this\nprong of the definition. Section 192.3 does not contain a definition of a distribution center, but\nthe term is generally understood to mean the point where an incoming gas pipeline branches into\na lower pressure network of distribution lines that provide gas service to customers.7\nRespondent further argued that it believed its position was supported by a Notice of Proposed\nRulemaking (NPRM) issued by PHMSA in 2016 that proposed adding a definition of\ndistribution center to § 192.3.8 This NPRM proposed defining a distribution center as a location\nwhere “gas volumes are either metered or have pressure or volume reductions prior to delivery to\ncustomers.” However, this proposed definition appears to refer to typical gas utility customers\nsuch as homes and businesses because it did not use the term large volume customers. The\nproposition that the word “customers” in this proposed definition of “distribution center” should\ninclude large volume customers would be inconsistent with the longstanding regulatory\ndefinition of “transmission line” which expressly includes lines serving large volume customers.\nIn any event this NPRM has not become a final rule. In this instance, the location where a\nnetwork of distribution lines that serves as the distribution center delivering gas service to\n4 See, e.g., Southern Star Central Gas Pipeline, Inc., Final Order, CPF No. 3-2008-1005 (Oct. 21, 2011).\n5 In a prior PHMSA Letter of Interpretation, the agency stated that “. . . the maintenance and operating requirements\nfor a pipeline supplying a power plant are consistent with other transmission pipelines, not service lines in a\ndistribution system. PHMSA Interpretation No. 09-0022 (Mar. 8, 2010).\n6 During the hearing, Respondent also noted that the definition of transmission line uses the singular term “large\nvolume customer,” while its line serves two large volume customers. However, the rules of regulatory construction\nat § 192.15(b)(1) state that “in this part, words importing the singular include the plural.”\n7 Letter from Edward J. Ondak, Director, Office of Pipeline Safety, to David Sinclair, Vice President of Operations,\nEnstar Natural Gas Company, CPF No. 58014W, 1998 WL 35166442 (Aug. 21, 1998).\n8 Pipeline Safety: Safety of Gas Transmission and Gathering Lines, (81 Fed. Reg. 20807). This NPRM has not\nbecome a final rule.\n\n\n\nCPF No. 5-2016-0004\nPage 4\ncustomers is the Susanville City Gate station at the downstream end of the 10-mile segment.\nTherefore, Respondent’s pipeline serves two large volume customers that are not downstream\nfrom a distribution center and the first prong is met.\nSecond Prong. The second prong involves a determination on whether the pipeline operates at a\nhoop stress of 20 percent or more of SMYS. The formula used to calculate hoop stress in the\nwall of a pipeline is as follows:\nS = PD/2t\nwhere: S = hoop stress, psi\nP = internal pressure, psi\nD = diameter, in.\nt = wall thickness, in.9\nOPS stated that the hoop stress of Respondent’s 10 mile, 6-inch steel pipeline segment is\ncalculated as follows:\nS = (1000 x 6.625)/2(0.219) = 15,125.57\nThis number is then divided by SMYS (42,000) and turned into a percentage as follows:\n15,125.57 / 42,000 = 0.36 x 100 = 36%\nOPS stated that the internal pressure of the pipe (P variable) is the established MAOP of the line,\nwhich in this case is 1000 psi. Because the line can operate up to a pressure of 1000 psi, OPS\nstated that this is the number that must be used to calculate the hoop stress of the line.10\nRespondent, however, argued that MAOP need not be used to calculate the hoop stress of the\nline. Rather, it believes that it should be allowed to use the pressure actually being experienced\nin the line for this calculation. Respondent stated that the line is normally operated at\napproximately 350 psi, and that a pilot regulator caps pressure at 450 psi. Respondent stated that\nthe pipeline can never operate above 20 percent SMYS because the system is currently\nconfigured only to physically operate at 450 psi which corresponds to 16.2 percent SMYS.\nRespondent argued that its position was supported by the above referenced NPRM issued by\nPHMSA in 2016 since it proposed a modification to the § 192.3 definition of the term\n“Transmission line” to expressly include the term MAOP in the language of this prong as\nopposed to “operates at…”\nI find Respondent’s argument unpersuasive and conclude that it would be unworkable in\npractice. As OPS noted, the MAOP of a pipeline and the percent SMYS calculation are linked in\nPart 192. Pipeline components such as pilot regulators and pressure regulators are designed and\nevaluated to a design standard in accordance with § 192.619(a)(1). In this instance, the\n9 This formula is reflected in the design formula regulations at § 192.105.\n10 Region Recommendation, at 3.\n\n\n\nCPF No. 5-2016-0004\nPage 5\ncomponents installed at the Chapious Lane receipt point are all designed to ANSI 600 class,\nincluding the pilot regulator. The design pressure of ANSI 600 components is 1440 psi. The\nspring inside the pilot regulator limiting the downstream pressure to 450 psi does not affect the\ncomponent design pressure of 1440 psi or its ANSI 600 rating. The spring can be changed at the\ndiscretion of the operator to change the actual pressure without changing the MAOP of the\npipeline. These springs are used in pilot regulators of all applicable ANSI classes. Therefore,\nalthough the pilot regulator may limit the pressure of the line, this does not affect the MAOP.11\nPrior PHMSA pipeline enforcement proceedings and interpretations make it clear that the\nestablished MAOP, not the current actual operating pressure, is used for regulatory classification\npurposes.12 For example, PHMSA issued an Interpretation Letter stating that a pipeline that\ndelivered gas to a large volume customer qualified as a transmission line despite the fact that the\npipeline actually operated at less than 20% of SMYS.13 If actual operating pressure could be\nused, there would be nothing stopping an operator from easily configuring its line to raise the\npressure as high as the established MAOP at times and lower it at other times causing uncertainty\nin the classification and affecting the applicability of various maintenance requirements. Thus,\nfor purposes of classification as a line that operates above or below 20 percent SMYS, operators\nmust use the established MAOP for the pipeline when determining the hoop stress. If an\noperator wants to de-rate or lower its MAOP for whatever reason, it would need to be done in a\npermanent manner reflected in its written procedures and design plans.\nWith regard to Respondent’s argument that its position was supported by the NPRM issued by\nPHMSA in 2016, the preamble reveals that the impetus for proposing a change to the\nTransmission line definition was to address the demarcation between transmission and gathering\nlines, not between transmission and distribution lines.14 While the NPRM was silent on the\nreason for this particular proposed change to this prong (i.e., replacing “operates at…” with the\nterm MAOP), if anything the absence of discussion implies that this was a clarification to\nexisting policy and practice as opposed to being needed to drive a significant change in behavior.\nTherefore, Respondent’s pipeline operates at a hoop stress above 20 percent SMYS for purposes\nof classification and the second prong in the definition of transmission line is met.\nIn sum, the subject pipeline is a transmission line because although it need only fall under one\nprong of the definition to be classified as a transmission line, it falls under the first and second\nprongs of the definition of “Transmission line” in 49 C.F.R. §192.3. Based on the foregoing, I\nfind that OPS established that the 10-mile pipeline is a transmission line.\n11 Region Recommendation, at 3-4.\n12 See, e.g., Breitburn Energy Partners, LP, Final Order, CPF No. 5-2009-0008 (Apr. 2, 2012).\n13 PHMSA Interp. No. 01-0102 (Feb. 15, 2001).\n14 Pipeline Safety: Safety of Gas Transmission and Gathering Lines, (81 Fed. Reg. 20807). This NPRM has not\nbecome a final rule.\n\n\n\nCPF No. 5-2016-0004\nPage 6\nFINDINGS OF VIOLATION\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.17(a), which states:\n§ 191.17 Transmission systems; gathering systems; liquefied natural gas\nfacilities; and underground natural gas storage facilities: Annual report.\n(a) Transmission or Gathering. Each operator of a transmission or a\ngathering pipeline system must submit an annual report for that system on\nDOT Form PHMSA 7100.2.1. This report must be submitted each year, not\nlater than March 15, for the preceding calendar year, except that for the\n2010 reporting year the report must be submitted by June 15, 2011.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.17(a) by failing to submit an\nannual report for a transmission pipeline system. Specifically, the Notice alleged that Susanville\nfailed to submit the annual report by March 15, 2014.\nIn its Response and at the hearing, Susanville acknowledged that if the pipeline is determined to\nbe a transmission line, the facts as alleged establish a violation.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 191.17(a) by failing to submit an annual report for a\ntransmission pipeline system.\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 covered\npipeline segment must develop and follow a written integrity management\nprogram that contains all the elements described in §192.911 and that\naddresses the risks on each covered transmission pipeline segment. The\ninitial integrity management program must consist, at a minimum, of a\nframework that describes the process for implementing each program\nelement, how relevant decisions will be made and by whom, a time line for\ncompleting the work to implement the program element, and how\ninformation gained from experience will be continuously incorporated into\nthe program. The framework will evolve into a more detailed and\ncomprehensive program. An operator must make continual improvements\nto the program.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.907(a) by failing to develop and\nfollow a written integrity management program for a transmission pipeline. Specifically, the\nNotice alleged that Susanville did not have a written integrity management program that\ncontained the elements described in § 192.911.\n\n\n\nCPF No. 5-2016-0004\nPage 7\nIn its Response and at the hearing, Susanville acknowledged that if the pipeline is determined to\nbe a transmission line, the facts as alleged establish a violation.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 192.907(a) by failing to develop and follow a written integrity\nmanagement program for a transmission pipeline.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.611(d), which states:\n§ 192.611 Change in class location: Confirmation or revision of maximum\nallowable operating pressure.\n(a) …\n(d) Confirmation or revision of the maximum allowable operating pressure\nthat is required as a result of a study under §192.609 must be completed within\n24 months of the change in class location. Pressure reduction under paragraph\n(a) (1) or (2) of this section within the 24-month period does not preclude\nestablishing a maximum allowable operating pressure under paragraph (a)(3)\nof this section at a later date.\nThe Notic","truncated":true,"body_characters":48148}