{"operation":"document","citation":"CPF 52023029NOPV","title":"AMERIGAS PROPANE LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-06-22","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.195(a), 192.355(b)(2), 192.357(a), 192.453, 192.463(a), 192.465(a), 192.467(a), 192.481(a), 192.517(b), 192.619(a)(1), 192.721(b)(1), 192.723(b)(1), 192.739(a), 192.739(a)(2), 192.747(a), 192.751(a), 192.805(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023029nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023029nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023029nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/52023029NOPV","body":"Notice of Probable Violation involving AMERIGAS PROPANE LP. PHMSA's enforcement data identifies the cited regulations as 192.195(a),  192.355(b)(2),  192.357(a),  192.453,  192.463(a),  192.465(a),  192.467(a),  192.481(a),  192.517(b),  192.619(a)(1),  192.721(b)(1),  192.723(b)(1),  192.739(a),  192.739(a)(2),  192.747(a),  192.751(a),  192.805(b). The case was opened on 2023-06-22 and is reported as closed as of 2024-10-21. Proposed civil penalty: $550,100. Assessed civil penalty: $431,400. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n52023029NOPV_Closure Letter_10212024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Closure%20Letter_10212024_(22-251181).pdf\n\n52023029NOPV_Closure Letter_10212024_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Closure%20Letter_10212024_(22-251181)_text.pdf\n\n52023029NOPV_Decision on Petition for Reconsideration_08192024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Decision%20on%20Petition%20for%20Reconsideration_08192024_(22-251181).pdf\n\n52023029NOPV_Decision on Petition for Reconsideration_08192024_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Decision%20on%20Petition%20for%20Reconsideration_08192024_(22-251181)_text.pdf\n\n52023029NOPV_Final Order_03272024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Final%20Order_03272024_(22-251181).pdf\n\n52023029NOPV_Final Order_03272024_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Final%20Order_03272024_(22-251181)_text.pdf\n\n52023029NOPV_Operator Petition for Reconsideration (Part 1)_04162024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Operator%20Petition%20for%20Reconsideration%20(Part%201)_04162024_(22-251181).pdf\n\n52023029NOPV_Operator Petition for Reconsideration (Part 2)_04162024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Operator%20Petition%20for%20Reconsideration%20(Part%202)_04162024_(22-251181).pdf\n\n52023029NOPV_Operator Response to Notice_07242023_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Operator%20Response%20to%20Notice_07242023_(22-251181).pdf\n\n52023029NOPV_PCP PCO_06222023_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_PCP%20PCO_06222023_(22-251181).pdf\n\n52023029NOPV_PCP PCO_06222023_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_PCP%20PCO_06222023_(22-251181)_text.pdf\n\n52023029NOPV_Final Order_03272024_(22-251181)_text.pdf\n\nMarch 27, 2024\nVIA ELECTRONIC MAIL TO: kellenherk@ugicorp.com\nMr. Kevin Kelleher\nVice President, Supply & Logistics Operations\nAmeriGas Propane, L.P.\n460 N. Gulph Road\nKing of Prussia, PA 19406\nRe: CPF No. 5-2023-029-NOPV\nDear Mr. Kelleher:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $543,400, and specifies actions that need to be\ntaken by AmeriGas Propane, L.P., to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Western Region, this\nenforcement action will be closed. Service of the Final Order by e-mail is effective upon the date\nof transmission and acknowledgement of receipt as 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\nMr. Markus Dreier, Vice President, Safety & OMS, AmeriGas Propane, L.P.,\nmarkus.dreier@amerigas.com\nMr. Christopher Wagner, Director, Compliance and Regulatory Affairs, AmeriGas\nPropane, L.P., christopher.wagner@amerigas.com\n\n\n\nMr. David Hedrick, Corporate OPS Manager, AmeriGas Propane, L.P.,\ndavid.hederick@amerigas.com\nCONFIRMATION OF 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 )\nAmeriGas Propane, L.P., ) CPF No. 5-2023-029-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom November 7 through 17, 2022, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site safety inspection of the liquefied petroleum gas distribution systems\nof AmeriGas Propane, L.P. (AmeriGas or Respondent) in Maui, Oahu, and the Island of Hawaii,\nHawaii.\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated June 22, 2023, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that AmeriGas had committed 13 violations of 49 C.F.R. Part 192,\nproposed assessing a civil penalty of $550,100 for the alleged violations, and proposed ordering\nRespondent to take certain measures to correct the alleged violations. The Notice also included\nan additional five warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to\ncorrect the probable violations or face possible future enforcement action.\nAfter requesting and receiving an extension of time to respond, AmeriGas responded on July 24,\n2023 (Response). Respondent sent a supplemental response on September 22, 2023, providing\nadditional information and evidence of potential remedial actions (Supplemental Response).\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\nItem 1. The Notice alleged that Respondent violated 49 C.F.R. § 192.195(a), which states.\n\n\n\n§ 192.195 Protection against accidental overpressuring.\n(a) General requirements. Except as provided in § 192.197, each\npipeline that is connected to a gas source so that the maximum allowable\noperating pressure could be exceeded as the result of pressure control failure\nor of some other type of failure, must have pressure relieving or pressure\nlimiting devices that meet the requirements of §§ 192.199 and 192.201.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.195(a) by failing to protect a\ncustomer gas meter on the “AAAAA Rent-A-Space” (Maui) system from overpressuring.\nSpecifically, the Notice alleged that photos taken during the November 2022 on-site inspection\nshowed that one of the three customer service meters (the meter labeled “IA Ohana Taco”)\nlacked adequate pressure limiting devices to regulate the pressure to less than the meter’s\nmaximum allowable operating pressure (MAOP).\nRespondent did not contest the fact that it failed to protect the IA Ohana Taco customer service\nmeter from overpressuring. Accordingly, after considering all of the evidence, I find that\nRespondent violated 49 C.F.R. § 192.195(a) by failing to have pressure relieving or pressure\nlimiting devices that meet the requirements of §§ 192.199 and 192.201.\nItem 3. The Notice alleged that Respondent violated 49 C.F.R. § 192.357(a), which states:\n§ 192.357 Customer meters and regulators: Installation.\n(a) Each meter and each regulator must be installed so as to minimize\nanticipated stresses upon the connecting piping and the meter.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.357(a) by failing to install each\nmeter and regulator so as to minimize anticipated stresses upon the connecting piping and the\nmeter. Specifically, the Notice alleged that during the November 2022 on-site inspection,\nPHMSA observed and photographed meters installed in a way that put undue stress on the\nconnected piping.\nRespondent did not contest the allegation that it failed to adequately support service meters.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.357(a) by failing to adequately support service meters in a manner that minimized stresses\non the service line piping.\nItem 4. The Notice alleged that Respondent violated 49 C.F.R. § 192.453, which states:\n§ 192.453 General.\nThe corrosion control procedures required by § 192.605(b)(2), including\nthose for the design, installation, operation, and maintenance of cathodic\nprotection systems, must be carried out by, or under the direction of, a\nperson qualified in pipeline corrosion control methods.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.453 by failing to ensure the\noperation and maintenance of its cathodic protection (CP) systems were carried out by a person\n\n\n\nqualified in corrosion control methods. Specifically, the Notice alleged that corrosion control\npersonnel were not adequately trained to collect accurate CP potentials, as demonstrated by\npractices observed by PHMSA inspectors during the November 2022 inspections and the\nresulting CP values recorded on AmeriGas’ CP monitoring worksheets.\nThe allegation of violation was based upon two premises. The first premise was related to the\nfailure by the operator’s technicians to not keep one of the copper-copper sulfate half-cells, used\nto measure CP levels, out of the field to be used as a calibration standard. The second premise\nwas, during the inspection, the technician on Oahu collected pipe-to-soil measurements by\nplacing the copper-copper sulfate half cells in soils immediately above the magnesium spike\nanodes used to provide CP. The Notice alleged this practice results in inaccurate pipe-to-soil\nmeasurement due to the proximity to the anode. The Notice also alleged that CP potentials less\nthan approximately -1.4 mV are typically considered “suspect” and should be investigated to\ndetermine if the practices used to collect the potential are contributing to inaccurate readings.1\nExhibit E-1 displays CP potentials as low as -1.65 mV. The Notice alleged that this evidence\nshowed the operator’s technicians were not trained to take pipe-to-soil measurements at locations\nthat would produce accurate potentials.\nIn its Response and Supplemental Response, Respondent contested the violation. Specifically,\nRespondent noted that it was unaware of any published standard or regulation mandating that\none half-cell remains unused or uncontaminated. Respondent argued that, as outlined in its O&M\nprocedures, it may utilize two half cells during a single evaluation for confirmatory purposes\nwhen warranted, but that this is not listed as an expectation. Respondent also argued that all\noperator qualified employees who performed corrosion control testing on the Hawaiian Islands\nunderwent qualification training within the five years prior to the November 2022 site visits and\nalleged that it provided supporting documentation. Respondent explained that during the\nemployee qualification process all employees demonstrated competency through the\nperformance of a skills assessment and were able to properly perform the tasks identified within\nRespondent’s O&M. Additionally, Respondent argued that it trained additional employees about\ncorrosion control during the week of December 5, 2022.\nAfter reviewing the record, I find Respondent failed to demonstrate the personnel conducting the\nCP testing observed during the inspection were qualified. The PHMSA inspector observed the\ntwo of Respondent’s personnel collecting CP potentials during the November 2022 site visits.\nRespondent states in its Supplemental Response that “[a]ll operator qualified employees who\nperformed corrosion control testing on the Hawaiian Islands underwent qualification training\nwithin the five years prior to the November 2022 site visits,” however, the only OQ\ndocumentation that Respondent provided regarding the personnel conducting the CP tests in\nNovember 2022 was dated after the inspection. In its Supplemental Response, Respondent\nprovided OQ Field Evaluation/Qualification Report Forms for only one of the observed\npersonnel demonstrating that on August 17, 2023, he underwent OQ qualification for (1)\n“Corrosion Control – Applying Cathodic Protection” and (2) “Corrosion Control – Measure Pipe\n1 Voltage drops other than those across the structure-electrolyte boundary must be considered for valid\ninterpretation of the voltage measurement. See 49 C.F.R. § 192, Appendix D, Paragraph II. The CP criteria in\nAppendix D are prescriptive and operators must train the individuals collecting CP readings in practices to collect\naccurate readings.\n\n\n\nto Soil Potential.” This record is dated after PHMSA’s inspection. Respondent also did not\nprovide evidence that the other observed AmeriGas personnel of record for the CP testing was\nOQ qualified at the time of PHMSA’s inspection. Additionally, Respondent’s general reference\nto its corrosion control training does not rebut the specific allegation that its technicians were not\ntrained to take pipe-to-soil measurements at locations that would produce accurate potentials.2\nFinally, Respondent provided OQ Field Evaluation/Qualification Report Forms for three\nadditional employees demonstrating that all three employees had been OQ qualified for (1)\n“Corrosion Control – Applying Cathodic Protection” and (2) “Corrosion Control – Measure Pipe\nto Soil Potential” on December 9, 2022. These employees were not those observed by PHMSA\nduring the site visits and these records of are dated after the CP tests were conducted.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.453 by failing to ensure the operation and maintenance of their CP systems were carried\nout by a person qualified in corrosion control methods.\nItem 5. The Notice alleged that Respondent violated 49 C.F.R. § 192.463(a), which states:\n§ 192.463 External corrosion control: Cathodic protection.\n(a) Each cathodic protection system required by this subpart must\nprovide a level of cathodic protection that complies with one or more of the\napplicable criteria contained in appendix D of this part. If none of these\ncriteria is applicable, the cathodic protection system must provide a level of\ncathodic protection at least equal to that provided by compliance with one\nor more of these criteria.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.463(a) by failing to provide a level\nof CP that complied with one or more of the applicable criteria contained in Appendix D of Part\n192 for the “Pearl Kai” (Oahu) and “AAAAA Rent-A-Space” (Maui) systems. Specifically, the\nNotice alleged that during the November 2022 on-site inspections, PHMSA observed and\nphotographed the operator measuring pipe-to-soil potentials less than\n-850mV for both systems. The Notice further alleged that the operator’s prior practice of using\ndirect-bonded anodes and measuring the potentials in soils near and directly above the anodes\nmay have resulted in incorrect measurements.\nRespondent contested the violation. Specifically, Respondent described the training for\nindividuals collecting CP potentials, explaining that “[a]ll operator qualified employees who\nperformed corrosion control testing on the Hawaiian Islands underwent qualification training\nwithin the five years prior to the November 2022 site visits.” Respondent also explained that it\nintended to provide refresher training on the subject of corrosion control in the future.\nRespondent admitted in its Supplemental Response “that the measurement reading of pipe-to-soil\npotential was less than negative -850mV for both systems at the time of the November 2022\ninspection.” However, Respondent argued that prior readings taken of both of the pipeline\n2 The Notice also asserted that AmeriGas’s personnel were not qualified based upon their lack of knowledge\nregarding keeping a copper-copper sulfate half-cells out of the field. The Notice, however, fails to cite any evidence\nthat this practice is an accepted industry standard. Additionally, Respondent’s own literature states that keeping a\nhalf-cell out of the field is merely a recommendation. Violation Report, Exhibit D, page 3.\n\n\n\nsystems were more than negative than -850mV, and that per its O&M Corrosion Control\nprocedures, it did not have to correct any deficiencies until “before the next scheduled survey,”\nor within 12 months. Since becoming aware of the low pipe-to-soil potential, Respondent alleged\nthat it remediated the relevant section in August 2023, but does not provide supporting\ndocumentation of the remediation.\nAfter reviewing the evidence, I find that Respondent failed to demonstrate the CP system\nprovided a level of CP that complied with the § 192.463(a). During the November 2022 on-site\ninspections, PHMSA observed and photographed the operator measuring pipe-to-soil potentials\nless than -850mV for both systems. Respondent does not dispute that to show its CP systems are\nproviding adequate protection, the CP readings should be equal to or more than -850mV because\n-850mV is the appropriate threshold for pipe-to-soil potential necessary to prevent significant\ncorrosion for the systems at issue. While Respondent argues it was unaware of the deficiencies\nbecause previous readings were more than -850mV, Respondent does not refute that its practice\nof using direct-bonded anodes and measuring potentials in soils near and directly above the\nanodes may have resulted in inaccurate measurements in the past. The previously recorded\nvalues of more than -850mV, therefore, do not demonstrate that the CP systems complied with\nthe regulatory standard up and until PHMSA’s inspection. Ultimately, regardless of AmeriGas’\nlack of prior indication of deficient CP readings, the readings taken during the inspection showed\nRespondent’s CP systems were inadequate to provide a level of CP that complies with one or\nmore of the applicable criteria contained in Appendix D of section 192.\nAccordingly, after considering all of the evidence, I find that AmeriGas violated 49 C.F.R.\n§ 192.463 by failing to provide a level of CP that complied with one or more of the applicable\ncriteria contained in Appendix D of Part 192.\nItem 6. The Notice alleged that Respondent violated 49 C.F.R. § 192.465(a), which states:\n§ 192.465 External corrosion control: Monitoring.\n(a) Each pipeline that is under cathodic protection must be tested at least\nonce each calendar year, but with intervals not exceeding 15 months, to\ndetermine whether the cathodic protection meets the requirements of §\n192.463. However, if tests at those intervals are impractical for separately\nprotected short sections of mains or transmission lines, not in excess of 100\nfeet (30 meters), or separately protected service lines, these pipelines may\nbe surveyed on a sampling basis. At least 10 percent of these protected\nstructures, distributed over the entire system must be surveyed each\ncalendar year, with a different 10 percent checked each subsequent year, so\nthat the entire system is tested in each 10-year period.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each\npipeline under CP each calendar year at intervals not to exceed 15 months for two of its systems.\nSpecifically, the Notice alleged that AmeriGas failed to conduct CP testing on its Coconut\nGrove (Maui) pipeline in 2021 and that it failed to perform cathodic protection testing on its\nWapahu Shopping Center (Oahu) pipeline since 2018.\n\n\n\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each pipeline\nunder CP each calendar year.\nItem 7. The Notice alleged that Respondent violated 49 C.F.R. § 192.467(a), which states:\n§ 192.467 External corrosion control: Electrical isolation.\n(a) Each buried or submerged pipeline must be electrically isolated from\nother underground metallic structures, unless the pipeline and the other\nstructures are electrically interconnected and cathodically protected as a\nsingle unit.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.467(a) by failing to provide\nadequate isolation between its Pearl Kai (Oahu) system and its buried metallic support structures.\nSpecifically, the Notice alleged that during the November 14, 2022 on-site inspection, the pipe\nwas visibly shorted to two “uni-strut\" type pipe supports that were in direct contact with the soil.\nIn addition, the Notice alleged that the pipe was shorted to an adjacent bridge girder.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 192.467 by failing to provide adequate\nelectrical isolation for its Pearl Kai system.\nItem 8 The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a), which states:\n§ 192.481 Atmospheric corrosion control: Monitoring.\n(a) Each operator must inspect and evaluate each pipeline or portion of\nthe pipeline that is exposed to the atmosphere for evidence of atmospheric\ncorrosion, as follows:\nPipeline type: Then the frequency of inspection is:\n(1) Onshore other than a\nService Line\nAt least once every 3 calendar years, but with\nboth intervals not exceeding 39 months.\n(2) Onshore Service Line At least once every 5 calendar years, but with\nintervals not exceeding 63 months, except as\nprovided in paragraph (d) of this section.\n(3) Offshore At least once each calendar year, but with\nintervals not exceeding 15 months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.481(a) by failing to complete\natmospheric corrosion inspections at the required intervals for two of its systems: Coconut Grove\n(Maui) and Wahiawa Town Center (Oahu). Specifically, the Notice alleged that the most recent\ndocumented atmospheric corrosion inspection for Coconut Grove was on January 8, 2018, and\nthat there were records for inspections of Wahiawa Town Center on January 8, 2014, and July\n28, 2020, which exceeded the 39-month deadline.\n\n\n\nRespondent contested the allegation of violation in part. Respondent did not contest PHMSA’s\nallegation that it did not have the required documentation of atmospheric corrosion inspections\nof the Coconut Grove and Waipahu Town Center systems within a 39-month interval.\nRespondent provided additional inspection records demonstrating that the Coconut Grove system\nwas inspected on September 18, 2022, and noted that it transitioned to an electronic work order\ntracking system from 2019 to 2021 and “[d]uring this period some locations misunderstood the\nexpectations for continued documentation of pipeline related activities on the paper forms…in\naddition to the new electronic work order system.”\nRespondent’s records indicate that the inspections of Coconut Grove were conducted on January\n8, 2018, and September 18, 2022, an interval of 56 months. The records show that the\ninspections of the Wahiawa Town Center inspections were conducted on January 8, 2014, and\nJuly 28, 2020, an interval of 78 months. Section 192.481(a) requires operators to inspect onshore\npipelines that are not service lines at least once every three calendar years, at intervals not to\nexceed 39 months. Therefore, even with the additional records provided, Respondent exceeded\nthe required three calendar years, not to exceed 39 months, interval between inspections for the\nCoconut Grove and Wahiawa Town Center facilities.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.481(a) by failing to complete atmospheric corrosion inspections at the required intervals\nfor two of its systems.\nItem 10. The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1), which states:\n§ 192.619 Maximum allowable operating pressure: Steel or plastic\npipelines.\n(a) No person may operate a segment of steel or plastic pipeline at a\npressure that exceeds a maximum allowable operating pressure (MAOP)\ndetermined under paragraph (c), (d), or (e) of this section, or the lowest of\nthe following: (1) The design pressure of the weakest element in the\nsegment, determined in accordance with subparts C and D of this part.\nHowever, for steel pipe in pipelines being converted under § 192.14 or\nuprated under subpart K of this part, if any variable necessary to determine\nthe design pressure under the design formula (§ 192.105) is unknown, one\nof the following pressures is to be used as design pressure:\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1) by operating a segment\nof steel or plastic pipeline at a pressure that exceeds a MAOP determined under paragraph (c),\n(d), or (e) of § 192.619. Specifically, the Notice alleged that, according to operator records, the\nsystems' established MAOPs are 10 psi, which is the maximum allowable inlet pressure of the\nsecond-stage service regulators (Fisher R622-DFF with a labeled maximum inlet pressure of 10\npsi). During the November 2022 on-site inspection, PHMSA observed and documented clock\ngauges showing the operating pressures of several systems operating at pressures greater than 10\npsi in five separate instances.\nRespondent contested the allegation of violation in part. In the Response and Supplemental\n\n\n\nResponse, Respondent asserted the clock gauge used to measure the pressure in one instance (the\nEwa Point Marketplace) was defective and, when replaced, the pressure measured was less than\nthe MAOP.\nPHMSA’s Western Region reviewed the documents provided by Respondent and, in a Region\nRecommendation, dated September 5, 2023, concluded that based on the information provided\nthe evidence supported Respondent’s argument that the EWA Point Marketplace system was not\noperating above the MAOP. I agree. Respondent did not contest the other four instances of\nviolation.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.619(a)(1) by operating a segment of steel or plastic pipeline at a pressure that exceeds a\nMAOP determined under paragraph (c), (d), or (e) of § 192.619.\nItem 12. The Notice alleged that Respondent violated 49 C.F.R. § 192.723(b)(1), which states:\n§ 192.723 Distribution systems: Leakage surveys.\n(a) . . . .\n(b) The type and scope of the leakage control program must be\ndetermined by the nature of the operations and the local conditions, but it\nmust meet the following minimum requirements:\n(1) A leakage survey with leak detector equipment must be conducted\nin business districts, including tests of the atmosphere in gas, electric,\ntelephone, sewer, and water system manholes, at cracks in pavement and\nsidewalks, and at other locations providing an opportunity for finding gas\nleaks, at intervals not exceeding 15 months, but at least once each calendar\nyear.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.723(b)(1) by failing to conduct leak\nsurveys of its systems in business districts at intervals not exceeding 15 months but at least once\neach calendar year. Specifically, the Notice alleged that Respondent did not conduct leak surveys\nat (1) the Shops at Wailea (Maui) location in 2020, (2) the Tosei (Maui) location in 2020, and (3)\nthe Shops at Mauna Lani (Hawaii) location in 2019, 2020, or 2021.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 192.723(b)(1) by failing to conduct leak\nsurveys of its systems in business districts at the mandatory intervals.\nItem 14. The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a)(2), which states:\n§ 192.739 Pressure limiting and regulating stations: Inspection and\ntesting.\n(a) Each pressure limiting station, relief device (except rupture discs),\nand pressure regulating station and its equipment must be subjected at\nintervals not exceeding 15 months, but at least once each calendar year, to\ninspections and tests to determine that it is –\n\n\n\n(1) . . . .\n(2) Adequate from the standpoint of capacity and reliability of operation\nfor the service in which it is employed;\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.739(a)(2) by failing to correct\ndeficiencies identified during the inspection of the regulating equipment at Shops at Wailea\n(Maui) system. Specifically, the Notice alleged that the operator personnel who conducted the\nregulator inspection of that system recognized it was inadequate from the standpoint of capacity\nand reliability for the service in which it is employed and, on March 19, 2019, generated a Sales\nand Service Order stating that Respondent \"need to install a monitoring regulator.\" The Notice\nalleged that Respondent was aware as early as March 19, 2019, that the regulating equipment as\nit was configured at the Shops of Wailea (Maui) system was inadequate but failed to correct it by\nNovember 12, 2022.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 192.739(a)(2) by failing to correct\ndeficiencies identified during the inspection of the regulating equipment at Shops at Wailea\n(Maui) system.\nItem 15. The Notice alleged that Respondent violated 49 C.F.R. § 192.747(a), which states:\n§ 192.747 Valve maintenance: Distribution systems.\n(a) Each valve, the use of which may be necessary for the safe operation\nof a distribution system, must be checked and serviced at intervals not\nexceeding 15 months, but at least once each calendar year.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.747(a) by failing to inspect or\nrecord the inspection of valves that might be needed in an emergency annually at intervals not to\nexceed 15 months. Specifically, the Notice alleged that (1) the Coconut Grove (Maui) system’s\nworksheets were not completed in 2019, (2) the Tosei (Maui) system’s worksheets were not\ncompleted in 2020, and (3) the Residences of Laule-a (Hawaii) system’s worksheets were not\ncompleted in 2021.\nRespondent contested the allegation of violation in part. In the Response, Respondent located\ninspection records showing valves had been inspected at the correct intervals for one of the three\nfacilities cited in the Notice (Coconut Grove). In its Supplemental Response, Respondent pointed\nto its transition to a new electronic work order tracking system from 2019 to 2021 as the reason it\nis unable to demonstrate completion of the two other valve inspections.\nAfter reviewing the evidence, I find the Coconut Grove inspection records show the valves were\ninspected within the required timeframe. Respondent was unable to demonstrate that the valves\nat the Tosei and Residences of Laule-a facilities were serviced at the required intervals.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.747(a) by failing to inspect or record the inspection of valves that might be needed in an\nemergency annually at intervals not to exceed 15 months in two instances.\n\n\n\nItem 17. The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) which states:\n§ 192.805 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) . . . .\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified;\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through\nevaluation that individuals performing tasks were qualified. Specifically, the Notice alleged that\nPHMSA observed worksheets where the operator inspected pressure-regulating equipment.\nWhen asked for the corresponding qualification records for that task, the relevant operator\npersonnel stated that he was not qualified for the task, and there was nothing on the regulator\ninspection worksheets suggesting that he worked under the span of control of a qualified\nindividual.\nRespondent did not contest this allegation of violation. Accordingly, after considering all of the\nevidence, I find that Respondent violated 49 C.F.R. § 19192.805(b) by failing to ensure that\nindividuals performing tasks had been evaluated and could perform the assigned covered tasks.\nItem 18. The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states:\n§ 192.805 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) . . . .\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified;\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through\nevaluation that individuals performing covered tasks were qualified to recognize and react to\nabnormal operating conditions (AOC), which is a requirement to be qualified under § 192.803.\nSpecifically, the Notice alleged that Respondent (1) failed to train and qualify the operator of\nrecord for odorant testing for the Maui systems on how to recognize and respond to inadequate\nlevels of odorization, which is an AOC relevant to that task, and (2) failed to train and qualify the\noperator of record for corrosion control practices for its Oahu systems to recognize and test for\nshorted pipe, an AOC relevant to that task.\nRespondent contested this allegation of violation. Respondent, in its Response, provided\nadditional information and training records. Respondent claimed that “[a]ll operator qualified\nemployees who performed OQ tasks on the Hawaiian Islands underwent qualification training within\nthe five years prior to the November 2022 site visits performed by PHMSA Respondent did not\nprovide any records that the relevant named employees were OQ qualified to perform any tasks\nat the time of the inspection. In its Supplemental Response, Respondent did provide the OQ\nField Evaluation/Qualification Report Forms for one of the employees demonstrating that after\n\n\n\nthe inspection, on August 17, 2023, he underwent OQ qualification for (1) “Odorization –\nTesting Levels Using an Instrument – (Odorator),” (2) “Corrosion Control – Applying Cathodic\nProtection” and (3) “Corrosion Control – Measure Pipe to Soil Potential.” Respondent did not\nprovide any documentation regarding the other named employee.\nWhile the Response described how to appropriately interpret the odor sampling equipment\nvalues, it failed to address the specific allegations and evidence in the Notice. The Notice\ndetailed observations of operator personnel who could not describe what values are outside of an\nacceptable range, an AOC relevant to the odorant testing task. In addition, Respondent’s training\nand qualification exam materials for the odorant testing task make no mention of AOCs or\nappropriate responses.3 Moreover, the operator personnel collecting CP readings could not\nrecognize and respond to a shorted pipe, which is an AOC for the corrosion control task. Again,\nthe Response did not address the issue that operator personnel were unable to recognize and\nrespond AOCs regarding the covered tasks during the November 2022 inspections. PHMSA\nobservations in the field indicate the Respondent’s qualification program did not ensure through\nevaluation that individuals performing covered tasks were qualified to recognize and perform\nAOCs for at least two covered tasks. Finally, Respondent’s qualification exam materials do not\nshow that the relevant individuals were OQ qualified to perform any tasks at the time of the\ninspection.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 192.805(b) by failing to ensure through evaluation that individuals performing covered tasks\nare qualified.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.4\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA. In\naddition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $550,100 for the violations cited above.\n3 Violation Report, Exhibit P.\n4 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\nItem 4: The Notice proposed a civil penalty of $75,200 for Respondent’s violation of 49 C.F.R.\n§ 192.453 by failing to ensure the operation and maintenance of its CP systems were carried out\nby a person qualified in corrosion control methods.\nRespondent contested this allegation of violation. Respondent did not set forth any argument for\nreduction or withdrawal of the civil penalty, apart from withdrawal of the underlying allegation\nof violation. For the reasons described above, I find Respondent in violation of § 192.453.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $75,200 for the violation of 49 C.F.R. § 192.453.\nItem 8: The Notice proposed a civil penalty of $35,700 for Respondent’s violation of 49 C.F.R.\n§ 192.481(a), for failing to complete atmospheric corrosion inspections at the required intervals\nfor two of its systems: Coconut Grove (Maui) and Wahiawa Town Center (Oahu).\nRespondent contested this allegation of violation in part. Respondent did not set forth any\nargument for reduction or withdrawal of the civil penalty apart from withdrawal of the\nunderlying allegation of violation. For the reasons described above, I find Respondent in\nviolation of § 192.481(a). Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $35,700 for the violation of 49 C.F.R.\n§ 192.481(a).\nItem 10: The Notice proposed a civil penalty of $168,600 for Respondent’s violation of 49\nC.F.R. § 192.619(a)(1), for failing to operate several systems at pressures less than the pipeline’s\nMAOP.\nRespondent contested the allegation of violation in part. In its Response, Respondent asserted the\nclock gauge used to measure the pressure in one instance (the Ewa Point Marketplace) was\ndefective and, when replaced, the pressure measured was less than the MAOP. Respondent did\nnot contest the other four instances of violation.\nHaving reviewed the record and considered the assessment criteria and Region\nRecommendation, I find that a reduction to the number of instances from five to four is\nwarranted. Accordingly, I assess Respondent a reduced civil penalty of $162,300 for the\nviolation of 49 C.F.R. § 192.619(a)(1).\nItem 12: The Notice proposed a civil penalty of $83,400 for Respondent’s violation of 49 C.F.R.\n§ 192.723(b)(1), for failing to conduct leak surveys of its systems in business districts at intervals\nnot exceeding 15 months, but at least once each calendar year.\nRespondent neither contested the allegation nor presented any evidence or argument justifying a\nreduction in or elimination of the proposed penalty. Accord","truncated":true,"body_characters":103766}