# HECO - HAWAIIAN ELECTRIC COMPANY, INC. — Safety Order

- **operation:** document
- **citation:** CPF 520186001S
- **title:** HECO - HAWAIIAN ELECTRIC COMPANY, INC. — Safety Order
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2018-01-09
- **effective on:** Not available
- **summary:** CLOSED safety order.
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520186001s.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520186001s.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520186001s
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520186001S
**body:**

Safety Order involving HECO - HAWAIIAN ELECTRIC COMPANY, INC.. The dataset does not identify a cited regulation for this case. The case was opened on 2018-01-09 and is reported as closed as of 2019-04-08. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520186001S_Closure Letter_04082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Closure%20Letter_04082019.pdf

520186001S_Closure Letter_04082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Closure%20Letter_04082019_text.pdf

520186001S_Consent Order and Agreement_05182018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Consent%20Order%20and%20Agreement_05182018.pdf

520186001S_Consent Order and Agreement_05182018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Consent%20Order%20and%20Agreement_05182018_text.pdf

520186001S_Notice Of Proposed Safety Order_01092018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Notice%20Of%20Proposed%20Safety%20Order_01092018.pdf

520186001S_Notice Of Proposed Safety Order_01092018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Notice%20Of%20Proposed%20Safety%20Order_01092018_text.pdf

520186001S_Operator Response to Notice and Requests for Informal Consultation_02092018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520186001S/520186001S_Operator%20Response%20to%20Notice%20and%20Requests%20for%20Informal%20Consultation_02092018.pdf

520186001S_Notice Of Proposed Safety Order_01092018_text.pdf

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
January 9, 2018
Mr. Alan M. Oshima
President & Chief Executive Officer
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
CPF 5-2018-6001S
Dear Mr. Oshima:
Enclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.
The Notice proposes that you take certain measures with respect to Hawaiian Electric Company,
Inc.’s Waiau Pipeline, which travels from Kalaeloa through Kapolei, Waipahu, and Pearl City to
the Waiau Power Plant, to ensure pipeline safety. Your options for responding are set forth in
the Notice. Your receipt of the Notice constitutes service of that document under 49 C.F.R. §
190.5.
We look forward to a successful resolution to ensure pipeline safety. Please direct any
questions on this matter to me at 720-963-3183.
Sincerely,
Dustin Hubbard
Acting Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Notice of Proposed Safety Order
Attachments:
A – General Overview Map
B – Waiau pipeline map showing proximity to Unusually Sensitive Areas



cc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS
Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS
Mr. Ronald R. Cox, Senior Vice President, Operations



DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WESTERN REGION
LAKEWOOD, COLORADO 80228
________________________________________________
In the Matter of )
)
)
Hawaiian Electric Company, Inc., )
) CPF No. 5-2018-6001S
Respondent. )
_______________________________________________ )
NOTICE OF PROPOSED SAFETY ORDER
Background and Purpose
Pursuant to Chapter 601 of Title 49, United States Code, the Pipeline and Hazardous Materials
Safety Administration (PHMSA) has initiated an investigation and information review of the
safety of your Waiau Pipeline, which transports low sulfur fuel oil from Barbers Point Tank
Farm (BPTF) to the Waiau Power Plant in Pearl City, Hawaii, with approximately 12.7 miles of
in-service pipeline mileage.1
As a result of the investigation and information review, it appears that conditions exist on your
pipeline facilities that pose a pipeline integrity risk to public safety, property, or the environment.
Pursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of Proposed Safety Order (Notice),
notifying you of the preliminary findings of the investigation, and proposing that you take
measures to ensure that the public, property, or the environment are protected from the integrity
risks identified in this Notice.
Preliminary Findings
 The Hawaiian Electric, Inc. (HECO) Waiau Pipeline (Waiau Pipeline or Affected
Segment) transports low sulfur fuel oil from the Barbers Point Tank Farm (BPTF)
eastwards to the Waiau power generation plant in Pearl City, Hawaii. There is a spur off
the pipeline that goes to the Kahe power plant. The Waiau Pipeline is considered a
hazardous liquids pipeline subject to Federal Pipeline Regulations 49 C.F.R., Part 195.
 The Waiau Pipeline passes through the towns of Kapolei, Waipahu, and Pearl City, HI.
1 Attachment A, General Overview Map.



2
 The pipeline is an 8-inch diameter pipe with 0.322 and 0.500-inch wall thickness,
consisting of API 5L-X42 grade pipe. The pipeline is coated with fusion bonded epoxy
coating, with 2-inch urethane foam insulation and a High Density Polyethylene (HDPE)
jacket. The pipeline was installed in 2004.
 The product being transported by the Waiau Pipeline is low sulfur fuel oil that is typically
introduced into the pipeline at a temperature of 200 °F when it enters the line.
 The Waiau Pipeline was initially hydrostatically tested in 2004 and put into service as a
1350 psig MOP pipeline later that year. The normal operating pressure for the pipeline is
between 150 and 200 psig.
 The Waiau Pipeline runs alongside much of Hawaii Highway 1, numerous roads, and
other transportation corridors. The line crosses near Pearl Harbor and terminates in Pearl
City, HI. The Waiau Pipeline is located in a High Consequence Area (HCA) due to its
proximity to the populations of Pearl Harbor and Honolulu, as well as its proximity to
Unusually Sensitive Area (USA) drinking water resource and ecological resource.2
 The Waiau Pipeline crosses geological formations and soils that are potentially abrasive
such as volcanic rock and coral sands.
 The following integrity risk conditions have been identified on the Affected Segment:
HECO installed the Waiau pipeline, a below ground insulated and HDPE jacketed
pipeline, in 2004. A below ground insulated pipeline may eventually have corrosion
problems due to the fact that applied cathodic protection (CP) (either impressed or
galvanic), is not able to reach the wall of the pipeline. Eventually, the jacket of the
pipeline can fail, allowing moisture to ingress into the foam insulation causing corrosion.
Although CP may be applied to an insulated pipeline, the CP current typically cannot
pass through the insulation and corrosion of the underlying steel pipe may occur where
the insulation contains water. Coupled with heat from the pipeline, the corrosion may
become accelerated and “corrosion under insulation” (CUI) may occur. CUI can occur
despite normally adequate amounts of impressed CP being applied. Furthermore, CP
monitoring methods utilizing conventional methods, e.g. test stations, half cells, and close
interval surveys, typically cannot detect CUI.
 PHMSA identified these risk conditions as a result of several inspections of the Waiau
pipeline since 2004, from the conclusions of a NACE International (NACE) technical
committee report titled “Effectiveness of Cathodic Protection on Thermally Insulated
Underground Metallic Structures” dated September 2006 (NACE International
Publication 10A392, 2006 Edition) (NACE Report), and from lessons learned from the
May 19, 2015 Plains pipeline spill in Santa Barbara County, California that occurred on a
heated insulated pipeline where the coating had become compromised (Plains release).
The results of that accident report were issued to the public on May 20, 2016. An
2 Attachment B, Map of Unusually Sensitive Area’s traversed by the Waiau Pipeline.



3
Advisory Bulletin, (ADB-2016-04) (PHMSA-2016-0071) dated June 15, 2016, (ADB),
was also issued alerting pipeline operators to the potential corrosion risks associated with
insulated pipelines.
 The NACE Report was prepared as a guide for external corrosion control of thermally-
insulated underground metallic surfaces and considerations of the effectiveness of CP.
The NACE report made the following conclusions: (1) ‘‘Generally, the application of
external CP to thermally insulated metallic surfaces has been ineffective; (2) The
principal or primary means of corrosion control of thermally-insulated metallic surfaces
is the application of an effective coating on the metallic surface; (3) Care is typically
taken in the application of the external jacket and during pipe installation to minimize
water ingress, which causes corrosion at imperfections in the primary coating; (4) When
practical, the thermally insulated metallic surfaces need to be inspected at routine time
intervals for metal loss (e.g., an internal pipeline inspection tool could be used).’’3
 As discussed in the ADB, insulated coatings on buried pipes can result in a corrosion
byproduct that occurs between the insulation and the exterior pipe wall and results in In-
Line Inspection (ILI) surveys that underestimate the amount of corrosion present. This
was identified by PHMSA as a contributing factor to the Plains release and is a
documented integrity risk on below ground insulated pipelines.4
 PHMSA conducted construction inspections during the installation of the Waiau pipeline
in 2004. Standard inspections were conducted in 2005 and 2008. An Integrated
Inspection was conducted in March, 2016. As a result of the inspection, PHMSA
determined that the foam insulation and HDPE jacket on the pipeline would shield any
CP from reaching the pipe wall if the jacket was compromised, and water infiltrated the
insulation. Accurate CP monitoring of the entire pipeline would also not be possible.
 The last ILI was conducted in November 2013 utilizing a Magnetic Flux Leakage (MFL)
tool. The results of the inspection activities indicate the Waiau Pipeline is affected by
metal loss corrosion anomalies with the majority of the metal loss indications between 10
and 19% wall loss.
 By letter dated November 13, 2017, HECO made a formal request to PHMSA for a
Special Permit for its Waiau pipeline for the purpose of addressing the issues identified in
this Notice and to ensure compliance with 49 CFR § 195.571. PHMSA is currently
evaluating HECO’s special permit application.
 The serviceability of the Waiau Pipeline is currently impaired because the risk conditions
identified above could result in a failure of the pipeline. A failure on the Waiau Pipeline
could result in the release of low sulfur fuel oil into HCA locations in and around
Honolulu, HI and Pearl Harbor, HI. The potential spill would affect commercial
3 See NACE Report.
4 See ADB.



4
properties, residential properties, and tourism in the area in and around the Waiau
Pipeline. The Pearl Harbor area is a National Monument and tourist attraction.
Proposed Issuance of Safety Order
Section 60117(l) of Title 49, United States Code, provides for the issuance of a safety order, after
reasonable notice and the opportunity for a hearing, requiring corrective measures, which may
include physical inspection, testing, repair, or other action, as appropriate. The basis for making
the determination that a pipeline facility has a condition or conditions that pose a pipeline integrity
risk to public safety, property, or the environment is set forth both in the above-referenced statute
and 49 C.F.R. § 190.239, a copy of which is enclosed.
After evaluating the foregoing preliminary findings of fact and considering the age of the pipe
involved, the hazardous nature of the product transported and the pressure required for transporting
such product, the characteristics of the geographical areas where the pipeline facility is located,
the environmentally sensitive area in and around the location of the Waiau pipeline, the likelihood
of CUI occurring, and the likelihood that the conditions could worsen or develop on other areas of
the pipeline and potentially impact its serviceability, it appears that the continued operation of the
Affected Segment without corrective measures poses a pipeline integrity risk to public safety,
property, or the environment.
Accordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the
proposed issuance of a safety order and to propose that Respondent take measures specified herein
to address the potential risk.
Response to this Notice
In accordance with § 190.239, you have 30 days following receipt of this Notice to submit a
written response to the official who issued the Notice. If you do not respond within 30 days, this
constitutes a waiver of your right to contest 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 Safety Order. In your response, you may notify that official that you intend to
comply with the terms of the Notice as proposed, or you may request that an informal
consultation be scheduled (you will also have the opportunity to request an administrative
hearing before a safety order is issued). Informal consultation provides you with the opportunity
to explain the circumstances associated with the risk condition(s) alleged in the notice and, as
appropriate, to present a proposal for a work plan or other remedial measures, without prejudice
to your position in any subsequent hearing. If you and PHMSA agree within 30 days of informal
consultation on a plan and schedule for you to address each identified risk condition, we may
enter into a written consent agreement (PHMSA would then issue an administrative consent
order incorporating the terms of the agreement). If a consent agreement is not reached, or if you
have elected not to request informal consultation, you may request an administrative hearing in
writing within 30 days following receipt of the Notice or within 10 days following the
conclusion of an informal consultation that did not result in a consent agreement, as applicable.
Following a hearing, if the Associate Administrator finds the facility to have a condition that



5
poses a pipeline integrity risk to the public, property, or the environment in accordance with §
190.239, the Associate Administrator may issue a safety order
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 qualify for
confidential treatment redacted and an explanation of why you believe the redacted information
qualifies for confidential treatment under 5 U.S.C. 552(b).
In your correspondence on this matter, please refer to CPF 5-2018-6001S and for each document
you submit, please provide a copy in electronic format whenever possible.
Proposed Corrective Measures
Pursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to HECO a
safety order incorporating the following remedial requirements with respect to the Affected
Segment:
1. To ensure continued safety, HECO shall conduct biennial ILI surveys, and investigate all
anomalies that exceed more than 40% of the nominal wall thickness. The tool used for
the first ILI run must utilize ultrasonic technologies, subsequent ILI runs will alternate
technologies between magnetic flux leakage (MFL) and ultrasonic technologies.
The entire length of the Affected Segment shall be patrolled at least two times per week.
The first ILI run referenced in this Notice shall be conducted no later than 60 days after
the issuance of a final safety order, and subsequent ILI surveys shall be conducted at the
intervals not exceeding 30 months, but at least once each two calendar years.
There should be at least two calibration digs and anomaly assessments conducted for the
ILI surveys required under this Notice to ensure that the ILI assessment is accurate.
5. HECO shall provide the Acting Director, Western Region, with documentation of
compliance and supporting data, to all Items above.
6. HECO shall submit quarterly reports to the Acting Director, Western Region, that: (1)
include analysis of all available data and results of the testing and evaluations required by
the safety order; and (2) describe the progress of the repairs and other remedial actions
being undertaken.
The Acting Director, Western Region, may grant an extension of time for compliance with
any of the terms of the safety order upon a written request timely submitted demonstrating
good cause for an extension.
2. 3. 4. 7.



6
8. The items required by the safety order shall remain in effect unless and until HECO obtains
a special permit for the Waiau pipeline that addresses the safety concerns identified in this
Notice.
9. Respondent may appeal any decision of the Acting Director, Western Region, to the
Associate Administrator for Pipeline Safety. Decisions of the Associate Administrator
shall be final.
The actions proposed by this Notice of Proposed Safety Order are in addition to and do not waive
any requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190 through
199, under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et seq., or
under any other provision of Federal or state law.
After receiving and analyzing additional data in the course of this proceeding and implementation
of the work plan, PHMSA may identify other safety measures that need to be taken. In that event,
Respondent will be notified of any proposed additional measures and, if necessary, amendments
to the work plan or safety order.
___________________________________ __________________
Dustin Hubbard Date issued
Acting Director, Western Region
Pipeline and Hazardous Materials Safety Administration

520186001S_Closure Letter_04082019_text.pdf

CERTIFIED MAIL – RETURN RECEIPT REQUESTED
April 8, 2019
Mr. Alan M. Oshima
President & Chief Executive Officer
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
RE: CPF 5-2018-6001S
Case Closure
Dear Mr. Oshima:
On May 18, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA)
issued a Consent Order and Consent Agreement (Agreement) to Hawaiian Electric Company,
Inc. (HECO). The Agreement required HECO to implement certain corrective measures to
address the safety concerns with the Waiau Pipeline, which transports low sulfur fuel oil from
Barbers Point Tank Farm (BPTF) to the Waiau Power Plant in Pearl City, Hawaii.
The corrective measures required by the Agreement are as follows: (1) perform In-Line
inspections (ILI) using alternate technologies (magnetic flux leakage and ultrasonic
technologies); (2) prepare a corrosion risk model incorporating all susceptible corrosion risk
factors, and incorporate the risk model into HECO’s integrity management plan; (3)
investigate, through calibration digs and anomaly assessments, at least four ILI anomalies that
exceed 10% of the nominal wall thickness but do not exceed 35% of the nominal wall
thickness; (4) investigate, through calibration digs and anomaly assessments, all ILI
anomalies that exceed 35% nominal wall thickness; and (4) submit quarterly reports detailing
all available data and results from the testing and evaluations required by the Agreement.
On several occasions between November and December 2018, PHMSA personnel conducted
field inspections of the Waiau Pipeline to ensure HECO’s compliance with the Agreement.
Based on the inspections, and a review of the required submittals from HECO, PHMSA has
determined that HECO is in compliance with the Agreement.
The Agreement required HECO to continue implementing the corrective measures contained
therein until they were all completed, or until HECO obtained a Special Permit for operation



of the Waiau Pipeline. HECO was granted a Special Permit for operation of the Waiau
Pipeline (PHMSA-2017-0155) on October 2, 2018. Accordingly, HECO has successfully
completed the terms of the Agreement and this case is now closed with no further
enforcement action with respect to the matters involved in this case.
Sincerely,
Chris Hoidal
Acting Director, Western Region
Pipeline and Hazardous Materials Safety Administration
cc: PHP-60 Compliance Registry
PHP-500 R. Guisinger 159059

520186001S_Consent Order and Agreement_05182018_text.pdf

May 18, 2018
VIA CERTIFIED MAIL AND FAX TO: (907) 777-8301
Mr. Alan M. Oshima
President & Chief Executive Officer
Hawaiian Electric Company, Inc.
900 Richards Street
Honolulu, Hawaii 96813
CPF No. CPF 5-2018-6001S
Dear Mr. Oshima:
Enclosed please find a Consent Order incorporating the terms of the Consent Agreement between
the Pipeline and Hazardous Materials Safety Administration (PHMSA) and Hawaiian Electric
Company, Inc. (HECO) which was executed on May 17, 2018. Service of the Consent Order and
Consent Agreement 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,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure: Order and Consent Agreement
cc: Ms. Kim West, Director, Western Region, OPS
Mr. Chris Hoidal, Senior Technical Advisor, Program Development, OPS
Mr. Derek Sato, Director, Fuels Infrastructure, Fuels, HECO, at
derek.sato@hawaiianelectric.com
Mr. K. Noa Dettweiler-Pavia, Associate General Counsel, HECO, at
Kahikino.dettweiler@hawaiianelectric.com



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
______
)
In the Matter of )
)
Hawaiian Electric Company, Inc., ) CPF No. 5-2018-6001S
)
Respondent. )
)
CONSENT ORDER
By letter dated January 9, 2018, the Pipeline and Hazardous Materials Safety Administration
(PHMSA), Office of Pipeline Safety (OPS or Agency), issued a Notice of Proposed Safety Order
(Notice) to Hawaiian Electric Company, Inc. (HECO or Respondent).
In accordance with 49 C.F.R. § 190.239, the Notice alleged that conditions exist on
Respondent’s Waiau Pipeline that pose a pipeline integrity risk to public safety, property, or the
environment. The Notice also proposed that Respondent take certain corrective measures to
remedy the alleged conditions and ensure that the public, property, and the environment are
protected from the potential risk.
In response to the Notice, Respondent requested an informal consultation, whereupon the parties
engaged in good-faith settlement discussions that have resulted in the Consent Agreement
attached to this Consent Order that settles all of the allegations in the Notice.
Accordingly, the Consent Agreement is hereby approved and incorporated by reference into this
Consent Order. The Respondent is hereby ordered to comply with the terms of the Consent
Agreement, effective immediately.
Pursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the
assessment of civil penalties of up to $200,000, as adjusted for inflation (see 49 C.F.R.
§ 190.223), for each violation for each day the violation continues or in referral to the Attorney
General for appropriate relief in a district court of the United States.
The terms and conditions of this Consent Order are effective upon service in accordance with
49 C.F.R. § 190.5.
May 18, 2018
Alan K. Mayberry Date
Associate Administrator
for Pipeline Safety



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of
Hawaiian Electric Company, Inc.,
Respondent.
)
)
)
)
)
)
)
CPF No. 5-2018-6001S
CONSENT AGREEMENT
On January 9, 2018, the Pipeline and Hazardous Materials Safety Administration (PHMSA),
Office of Pipeline Safety (OPS or Agency), issued a Notice of Proposed Safety Order (Notice) to
Hawaiian Electric Company, Inc. (HECO or Respondent). The Notice alleged that conditions
exist on Respondent’s Waiau Pipeline that pose a pipeline integrity risk to public safety,
property, or the environment. The Notice also proposed that Respondent take certain corrective
measures to remedy the alleged conditions and ensure that the public, property, and the
environment are protected from the potential risk.
HECO responded to the Notice by timely submitting a written response and a request for an
informal consultation. An informal consultation was held on March 13, 2018 at HECO’s office
in Barbers Point, Hawaii.
As a result of the informal consultation, PHMSA and HECO (collectively, Parties) agreed that
settlement of this proceeding will avoid further administrative proceedings or litigation of the
Notice and that entry into this Consent Agreement (Agreement) is the most appropriate means of
resolving the issues raised in the Notice and is generally in the public interest. Therefore,
pursuant to 49 C.F.R. Part 190, without adjudication of any issue of fact or law, and upon
consent and agreement of HECO and PHMSA, the Parties agree as follows:
I. General Provisions
1. Respondent acknowledges that as the operator of the Waiau Pipeline, Respondent
and its Waiau Pipeline system is subject to the jurisdiction of the Federal pipeline safety laws, 49
U.S.C. § 60101, et seq., and the regulations and administrative orders issued thereunder. For
purposes of this Agreement, Respondent acknowledges that it received proper notice of
PHMSA's action in this proceeding and that the Notice states claims upon which relief may be
granted pursuant to 49 U.S.C. 60101, et seq., and the regulations and orders issued thereunder.
The Waiau Pipeline transports low sulfur fuel oil from the Barbers Point Tank Farm (BPTF)
eastwards to the Waiau power generation plant in Pearl City, Hawaii, and is defined more
specifically as the Affected Pipeline Facility in Paragraph 12(a) of this Agreement.



CPF No. 5-2018-6001S
Page 2
2. Respondent agrees, for purposes of this Agreement, to address the integrity risks
identified in the Notice by completing the actions specified in Section II of this agreement
(Corrective Measures) and to abide by the terms of this Agreement. This Agreement does not
constitute a finding of violation of any Federal law or regulation and may not be used in any civil
or administrative proceeding of any kind as evidence or proof of any fact, fault or liability, or as
evidence of the violation of any law, rule, regulation or requirement, except in a proceeding to
enforce the provisions of this Agreement.
3. After Respondent returns this signed Agreement to PHMSA, the Agency’s
representative will present it to the Associate Administrator for Pipeline Safety, recommending
that the Associate Administrator adopt the terms of this Agreement by issuing an administrative
order (Consent Order) incorporating the terms of this Agreement. The terms of this Agreement
constitute an offer of settlement until accepted by the Associate Administrator. Once accepted,
the Associate Administrator will issue a Consent Order incorporating the terms of this Agreement.
4. Respondent consents to the issuance of the Consent Order, and hereby waives any
further procedural requirements with respect to its issuance. Respondent waives all rights to
contest the adequacy of notice, or the validity of the Consent Order or this Agreement, including
all rights to administrative or judicial hearings or appeals, except as set forth herein.
5. This Agreement shall apply to and be binding upon PHMSA, and upon HECO, its
officers, directors, and employees, and its successors, assigns, or other entities or persons
otherwise bound by law. Respondent agrees to provide a copy of this Agreement and any
incorporated work plans and schedules to all of HECO’s officers, employees, and agents whose
duties might reasonably include compliance with this Agreement.
6. For all transfers of ownership or operating responsibility of HECO’s Waiau
Pipeline, Respondent will provide a copy of this Agreement to the prospective transferee at least
30 days prior to such transfer and simultaneously provide written notice of the prospective
transfer to the PHMSA Western Region Director (Director) who issued the Notice.
7. This Agreement constitutes the final, complete and exclusive agreement and
understanding between the Parties with respect to the settlement embodied in this Agreement.
The Parties acknowledge that there are no representations, agreements or understandings relating
to settlement other than those expressly contained in this Agreement, except that the terms of this
Agreement may be construed by reference to the Notice.
8. Nothing in this Agreement affects or relieves Respondent of its responsibility to
comply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101,
et seq., and the regulations and orders issued thereunder. Nothing in this Agreement alters
PHMSA's right of access, entry, inspection, and information gathering or PHMSA's authority to
bring enforcement actions against HECO pursuant to the Federal pipeline safety laws, the
regulations and orders issued thereunder, or any other provision of Federal or State law.



CPF No. 5-2018-6001S
Page 3
9. This Agreement does not waive or modify any Federal, State, or local laws or
regulations that are applicable to Respondent’s pipeline systems. This Agreement is not a
permit, or a modification of any permit, under any Federal, State, or local laws or regulations.
HECO remains responsible for achieving and maintaining compliance with all applicable
Federal, State, and local laws, regulations and permits.
10. This Agreement does not create rights in, or grant any cause of action to, any third
party not party to this Agreement. The U.S. Department of Transportation is not liable for any
injuries or damages to persons or property arising from acts or omissions of Respondent or its
officers, employees, or agents carrying out the work required by this Agreement. HECO agrees
to hold harmless the U.S. Department of Transportation, its officers, employees, agents, and
representatives from any and all causes of action arising from any acts or omissions of
Respondent or its contractors in carrying out any work required by this Agreement.
11. Measures set forth below.
Upon issuance of the Consent Order, HECO agrees to perform the Corrective
12. Definitions:
a. The Affected Pipeline Facility means the 8-inch diameter pipe with 0.322 and
0.500-inch wall thickness, consisting of API 5L-X42 grade pipe. The pipeline is
coated with fusion bonded epoxy coating, with 2-inch urethane foam insulation
and a High Density Polyethylene (HDPE) jacket. The pipeline was installed in
2004.
b. The Affected Segment means the Waiau Pipeline, which transports low sulfur
fuel oil from Barbers Point Tank Farm (BPTF) to the Waiau Power Plant in Pearl
City, Hawaii, with approximately 12.7 miles of in-service pipeline mileage. The
Affected Segment runs alongside the Hawaii Highway 1 in two short sections, and
it crosses the light rail system at various points along the 12.7 miles of in-service
pipeline mileage. The Affected Segment is located in a High-Consequence Area
(HCA) due to its proximity to the populations of Pearl Harbor and Honolulu, as
well as its proximity to Unusually Sensitive Area (USA) ecological resource.
II. Corrective Measures
13. In-Line Inspection (ILI) Assessment. HECO shall conduct ILI surveys, and
investigate, through calibration digs and anomaly assessments, all anomalies that exceed more
than 35% of the nominal wall thickness. The tool used for the first ILI survey must utilize
magnetic flux leakage (MFL) technologies. The second ILI survey must utilize ultrasonic
technologies. Subsequent ILI surveys will alternate technologies between MFL and ultrasonic
technologies (UT).
a. HECO must conduct the first MFL ILI survey required by this Agreement no
later than 60 days after the issuance of a Consent Order. HECO may submit



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b. c. d. written documentation of the MFL ILI survey completed on or about April 17,
2018 to the Director to satisfy this requirement.
HECO must conduct the first UT ILI survey required by this Agreement no
later than 12 months after completion of the first MFL ILI survey required by
this Agreement.
All subsequent ILI surveys required by this Agreement shall be conducted at
intervals not exceeding 30 months, but at least once every two calendar years.
The results (draft and final reports) of the ILI surveys required by this
paragraph must be sent to the Director within 30 days of receipt of each ILI
vendor's report by HECO. Documentation of all subsequent anomaly
assessments and associated repairs, must be sent to the Director within 30
days following completion of each anomaly assessment, and or repair.
14. Patrols. HECO must patrol the entire length of the Affected Segment at least one
time per week. The patrols required by this paragraph shall continue until the Director provides
written notification to HECO that the patrols are no longer required.
15. Risk Model. HECO shall develop a corrosion risk model of the Affected Segment
and submit the risk model to the Director for review and written approval within 90 days of the
issuance of this Consent Agreement. The risk model required by this paragraph must incorporate
all susceptible corrosion risk factors such as terrain, water and road crossings, AC/DC
interference, soil pH, standing water locations, coating failure, and all verified data from
previous calibration digs and ILI results. The risk model required by this paragraph shall be
incorporated into HECO’s integrity management plan and further developed with future ILI and
integrity assessments. This model shall identify the highest areas of susceptible corrosion and
HECO shall use the data to mitigate or investigate those areas.
16. Calibration Digs for Anomalies Between 11% and 35% of the Nominal Wall
Thickness. In addition to the calibration digs required by paragraph 13 of this Agreement,
HECO must investigate, through calibration digs and anomaly assessments, at least four
anomalies on the first MFL run required by paragraph 13 of this Agreement that exceed 10% of
the nominal wall thickness but do not exceed 35% of the nominal wall thickness. If there are
more than four anomalies between 11% and 35% of the nominal wall thickness identified on the
first MFL run required by paragraph 13 of this Agreement, the calibration digs and anomaly
assessments required by this paragraph shall be conducted pursuant to the risk model required by
paragraph 15 of this Agreement.
17. Documentation. HECO must retain on file documentation of compliance and
supporting data to all Items above until this Consent Agreement is terminated. HECO must
provide copies of documentation referenced in this paragraph upon written request by the
Director.
18. Quarterly Reports. HECO must submit quarterly reports to the Director that:
(1) include analysis of all available data and results of the testing and evaluations required by
this Agreement; and (2) describe the progress of the repairs and other remedial actions being
undertaken. The first report will be due 45 days from issuance of a final Consent Order.



CPF No. 5-2018-6001S
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19. Extensions of Time. The Director may grant an extension of time for
compliance with any of the terms of the Agreement upon a written request timely submitted
demonstrating good cause for an extension. The Director shall respond in writing to any such
request.
20. Appeals. Respondent may appeal any decision of the Director to the Associate
Administrator for Pipeline Safety. Decisions of the Associate Administrator will be final.
III. Review and Approval Process
21. With respect to any submission under Section II (Corrective Measures) of this
Agreement that requires the approval of the Director, the Director may: (a) approve, in whole or
in part, the submission, (b) approve the submission on specified, reasonable conditions, (c)
disapprove, in whole or in part, the submission, or (d) any combination of the foregoing. If the
Director approves, approves in part, or approves with conditions, HECO will take all action as
approved by the Director, subject to Respondent's right to invoke the dispute resolution
procedures in Section IV with respect to any conditions the Director identifies. If the Director
disapproves all or any portion of the submission, the Director will provide HECO with a written
notice of the deficiencies. Respondent will correct all deficiencies within the time specified by
the Director and resubmit it for approval.
IV. Dispute Resolution
22. The Director and HECO will informally attempt to resolve any disputes arising
under this Agreement. If Respondent and the Director are unable to informally resolve the
dispute within 15 days of submittal of Respondent’s invoking dispute resolution, HECO may
request in writing, within 10 days thereafter, a written determination resolving the dispute from
the Associate Administrator for Pipeline Safety providing all information that Respondent
believes is relevant to the dispute. If the request is submitted as provided herein, the Associate
Administrator will issue a final determination in writing. The existence of a dispute and the
PHMSA's consideration of matters placed in dispute will not excuse, toll, or suspend any term or
timeframe for completion of any work to be performed under this Agreement during the
pendency of the dispute resolution process except as agreed by the Director or the Associate
Administrator in writing.
V. Enforcement
23. This Agreement, as adopted by the Consent Order, is subject to all enforcement
authorities available to the PHMSA under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190. All
work plans and associated schedules set forth or referenced in Section II will be automatically
incorporated into this Agreement and are enforceable in the same manner.
VI. Recordkeeping and Information Disclosure
24. Unless otherwise required in this Agreement, HECO agrees to maintain records
demonstrating compliance with all requirements of this Agreement for a period of at least five
years following completion of all work to be performed. For any reports, plans, or other



CPF No. 5-2018-6001S
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deliverables required to be submitted to PHMSA pursuant to this Agreement, Respondent may
assert a claim of business confidentiality or other protections applicable to the release of
information by PHMSA, covering part or all of the information required to be submitted to
PHMSA pursuant to this Agreement in accordance with 49 C.F.R. Part 7. Respondent must
mark the claim of confidentiality in writing on each page, and include a statement specifying the
grounds for each claim of confidentially. PHMSA determines release of any information
submitted pursuant to this Agreement in accordance with 49 C.F.R. Part 7, the Freedom of
Information Act, 5 U.S.C. § 552, DOT and PHMSA policies, and other applicable regulations
and Executive Orders.
VII. Effective Date
25. The term “Effective Date,” as used herein, is the date on which the Consent Order
is issued by the Associate Administrator incorporating the terms of this Agreement. Unless
specified to the contrary, all deadlines for actions required by this Agreement run from the
Effective Date of this Consent Order.
VIII. Modification
26. The terms of this Agreement may be modified by mutual agreement of the Parties.
Such modifications must be in writing and signed by both parties.
IX. Termination
27. This Agreement shall remain in effect until the Corrective Measures are satisfied,
as determined by the
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