# AMERIGAS PROPANE LP — Notice of Probable Violation

- **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:** Not available
- **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).
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**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.

Official case documents:

52023029NOPV_Closure Letter_10212024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Closure%20Letter_10212024_(22-251181).pdf

52023029NOPV_Closure Letter_10212024_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Closure%20Letter_10212024_(22-251181)_text.pdf

52023029NOPV_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

52023029NOPV_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

52023029NOPV_Final Order_03272024_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Final%20Order_03272024_(22-251181).pdf

52023029NOPV_Final Order_03272024_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_Final%20Order_03272024_(22-251181)_text.pdf

52023029NOPV_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

52023029NOPV_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

52023029NOPV_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

52023029NOPV_PCP PCO_06222023_(22-251181).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_PCP%20PCO_06222023_(22-251181).pdf

52023029NOPV_PCP PCO_06222023_(22-251181)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023029NOPV/52023029NOPV_PCP%20PCO_06222023_(22-251181)_text.pdf

52023029NOPV_Final Order_03272024_(22-251181)_text.pdf

March 27, 2024
VIA ELECTRONIC MAIL TO: kellenherk@ugicorp.com
Mr. Kevin Kelleher
Vice President, Supply & Logistics Operations
AmeriGas Propane, L.P.
460 N. Gulph Road
King of Prussia, PA 19406
Re: CPF No. 5-2023-029-NOPV
Dear Mr. Kelleher:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a reduced civil penalty of $543,400, and specifies actions that need to be
taken by AmeriGas Propane, L.P., to comply with the pipeline safety regulations. The penalty
payment terms are set forth in the Final Order. When the civil penalty has been paid and the
terms of the compliance order completed, as determined by the Director, Western Region, this
enforcement action will be closed. Service of the Final Order by e-mail is effective upon the date
of transmission and acknowledgement of receipt as 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
cc: Mr. Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA
Mr. Markus Dreier, Vice President, Safety & OMS, AmeriGas Propane, L.P.,
markus.dreier@amerigas.com
Mr. Christopher Wagner, Director, Compliance and Regulatory Affairs, AmeriGas
Propane, L.P., christopher.wagner@amerigas.com



Mr. David Hedrick, Corporate OPS Manager, AmeriGas Propane, L.P.,
david.hederick@amerigas.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
AmeriGas Propane, L.P., ) CPF No. 5-2023-029-NOPV
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From November 7 through 17, 2022, pursuant to 49 U.S.C. § 60117, a representative of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site safety inspection of the liquefied petroleum gas distribution systems
of AmeriGas Propane, L.P. (AmeriGas or Respondent) in Maui, Oahu, and the Island of Hawaii,
Hawaii.
As a result of the inspection, the Director, Western Region, OPS (Director), issued to
Respondent, by letter dated June 22, 2023, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice proposed finding that AmeriGas had committed 13 violations of 49 C.F.R. Part 192,
proposed assessing a civil penalty of $550,100 for the alleged violations, and proposed ordering
Respondent to take certain measures to correct the alleged violations. The Notice also included
an additional five warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to
correct the probable violations or face possible future enforcement action.
After requesting and receiving an extension of time to respond, AmeriGas responded on July 24,
2023 (Response). Respondent sent a supplemental response on September 22, 2023, providing
additional information and evidence of potential remedial actions (Supplemental Response).
Respondent did not request a hearing and therefore has waived its right to one.
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:
Item 1. The Notice alleged that Respondent violated 49 C.F.R. § 192.195(a), which states.



§ 192.195 Protection against accidental overpressuring.
(a) General requirements. Except as provided in § 192.197, each
pipeline that is connected to a gas source so that the maximum allowable
operating pressure could be exceeded as the result of pressure control failure
or of some other type of failure, must have pressure relieving or pressure
limiting devices that meet the requirements of §§ 192.199 and 192.201.
The Notice alleged that Respondent violated 49 C.F.R. § 192.195(a) by failing to protect a
customer gas meter on the “AAAAA Rent-A-Space” (Maui) system from overpressuring.
Specifically, the Notice alleged that photos taken during the November 2022 on-site inspection
showed that one of the three customer service meters (the meter labeled “IA Ohana Taco”)
lacked adequate pressure limiting devices to regulate the pressure to less than the meter’s
maximum allowable operating pressure (MAOP).
Respondent did not contest the fact that it failed to protect the IA Ohana Taco customer service
meter from overpressuring. Accordingly, after considering all of the evidence, I find that
Respondent violated 49 C.F.R. § 192.195(a) by failing to have pressure relieving or pressure
limiting devices that meet the requirements of §§ 192.199 and 192.201.
Item 3. The Notice alleged that Respondent violated 49 C.F.R. § 192.357(a), which states:
§ 192.357 Customer meters and regulators: Installation.
(a) Each meter and each regulator must be installed so as to minimize
anticipated stresses upon the connecting piping and the meter.
The Notice alleged that Respondent violated 49 C.F.R. § 192.357(a) by failing to install each
meter and regulator so as to minimize anticipated stresses upon the connecting piping and the
meter. Specifically, the Notice alleged that during the November 2022 on-site inspection,
PHMSA observed and photographed meters installed in a way that put undue stress on the
connected piping.
Respondent did not contest the allegation that it failed to adequately support service meters.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.357(a) by failing to adequately support service meters in a manner that minimized stresses
on the service line piping.
Item 4. The Notice alleged that Respondent violated 49 C.F.R. § 192.453, which states:
§ 192.453 General.
The corrosion control procedures required by § 192.605(b)(2), including
those for the design, installation, operation, and maintenance of cathodic
protection systems, must be carried out by, or under the direction of, a
person qualified in pipeline corrosion control methods.
The Notice alleged that Respondent violated 49 C.F.R. § 192.453 by failing to ensure the
operation and maintenance of its cathodic protection (CP) systems were carried out by a person



qualified in corrosion control methods. Specifically, the Notice alleged that corrosion control
personnel were not adequately trained to collect accurate CP potentials, as demonstrated by
practices observed by PHMSA inspectors during the November 2022 inspections and the
resulting CP values recorded on AmeriGas’ CP monitoring worksheets.
The allegation of violation was based upon two premises. The first premise was related to the
failure by the operator’s technicians to not keep one of the copper-copper sulfate half-cells, used
to measure CP levels, out of the field to be used as a calibration standard. The second premise
was, during the inspection, the technician on Oahu collected pipe-to-soil measurements by
placing the copper-copper sulfate half cells in soils immediately above the magnesium spike
anodes used to provide CP. The Notice alleged this practice results in inaccurate pipe-to-soil
measurement due to the proximity to the anode. The Notice also alleged that CP potentials less
than approximately -1.4 mV are typically considered “suspect” and should be investigated to
determine if the practices used to collect the potential are contributing to inaccurate readings.1
Exhibit E-1 displays CP potentials as low as -1.65 mV. The Notice alleged that this evidence
showed the operator’s technicians were not trained to take pipe-to-soil measurements at locations
that would produce accurate potentials.
In its Response and Supplemental Response, Respondent contested the violation. Specifically,
Respondent noted that it was unaware of any published standard or regulation mandating that
one half-cell remains unused or uncontaminated. Respondent argued that, as outlined in its O&M
procedures, it may utilize two half cells during a single evaluation for confirmatory purposes
when warranted, but that this is not listed as an expectation. Respondent also argued that all
operator qualified employees who performed corrosion control testing on the Hawaiian Islands
underwent qualification training within the five years prior to the November 2022 site visits and
alleged that it provided supporting documentation. Respondent explained that during the
employee qualification process all employees demonstrated competency through the
performance of a skills assessment and were able to properly perform the tasks identified within
Respondent’s O&M. Additionally, Respondent argued that it trained additional employees about
corrosion control during the week of December 5, 2022.
After reviewing the record, I find Respondent failed to demonstrate the personnel conducting the
CP testing observed during the inspection were qualified. The PHMSA inspector observed the
two of Respondent’s personnel collecting CP potentials during the November 2022 site visits.
Respondent states in its Supplemental Response that “[a]ll operator qualified employees who
performed corrosion control testing on the Hawaiian Islands underwent qualification training
within the five years prior to the November 2022 site visits,” however, the only OQ
documentation that Respondent provided regarding the personnel conducting the CP tests in
November 2022 was dated after the inspection. In its Supplemental Response, Respondent
provided OQ Field Evaluation/Qualification Report Forms for only one of the observed
personnel demonstrating that on August 17, 2023, he underwent OQ qualification for (1)
“Corrosion Control – Applying Cathodic Protection” and (2) “Corrosion Control – Measure Pipe
1 Voltage drops other than those across the structure-electrolyte boundary must be considered for valid
interpretation of the voltage measurement. See 49 C.F.R. § 192, Appendix D, Paragraph II. The CP criteria in
Appendix D are prescriptive and operators must train the individuals collecting CP readings in practices to collect
accurate readings.



to Soil Potential.” This record is dated after PHMSA’s inspection. Respondent also did not
provide evidence that the other observed AmeriGas personnel of record for the CP testing was
OQ qualified at the time of PHMSA’s inspection. Additionally, Respondent’s general reference
to its corrosion control training does not rebut the specific allegation that its technicians were not
trained to take pipe-to-soil measurements at locations that would produce accurate potentials.2
Finally, Respondent provided OQ Field Evaluation/Qualification Report Forms for three
additional employees demonstrating that all three employees had been OQ qualified for (1)
“Corrosion Control – Applying Cathodic Protection” and (2) “Corrosion Control – Measure Pipe
to Soil Potential” on December 9, 2022. These employees were not those observed by PHMSA
during the site visits and these records of are dated after the CP tests were conducted.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.453 by failing to ensure the operation and maintenance of their CP systems were carried
out by a person qualified in corrosion control methods.
Item 5. The Notice alleged that Respondent violated 49 C.F.R. § 192.463(a), which states:
§ 192.463 External corrosion control: Cathodic protection.
(a) Each cathodic protection system required by this subpart must
provide a level of cathodic protection that complies with one or more of the
applicable criteria contained in appendix D of this part. If none of these
criteria is applicable, the cathodic protection system must provide a level of
cathodic protection at least equal to that provided by compliance with one
or more of these criteria.
The Notice alleged that Respondent violated 49 C.F.R. § 192.463(a) by failing to provide a level
of CP that complied with one or more of the applicable criteria contained in Appendix D of Part
192 for the “Pearl Kai” (Oahu) and “AAAAA Rent-A-Space” (Maui) systems. Specifically, the
Notice alleged that during the November 2022 on-site inspections, PHMSA observed and
photographed the operator measuring pipe-to-soil potentials less than
-850mV for both systems. The Notice further alleged that the operator’s prior practice of using
direct-bonded anodes and measuring the potentials in soils near and directly above the anodes
may have resulted in incorrect measurements.
Respondent contested the violation. Specifically, Respondent described the training for
individuals collecting CP potentials, explaining that “[a]ll operator qualified employees who
performed corrosion control testing on the Hawaiian Islands underwent qualification training
within the five years prior to the November 2022 site visits.” Respondent also explained that it
intended to provide refresher training on the subject of corrosion control in the future.
Respondent admitted in its Supplemental Response “that the measurement reading of pipe-to-soil
potential was less than negative -850mV for both systems at the time of the November 2022
inspection.” However, Respondent argued that prior readings taken of both of the pipeline
2 The Notice also asserted that AmeriGas’s personnel were not qualified based upon their lack of knowledge
regarding keeping a copper-copper sulfate half-cells out of the field. The Notice, however, fails to cite any evidence
that this practice is an accepted industry standard. Additionally, Respondent’s own literature states that keeping a
half-cell out of the field is merely a recommendation. Violation Report, Exhibit D, page 3.



systems were more than negative than -850mV, and that per its O&M Corrosion Control
procedures, it did not have to correct any deficiencies until “before the next scheduled survey,”
or within 12 months. Since becoming aware of the low pipe-to-soil potential, Respondent alleged
that it remediated the relevant section in August 2023, but does not provide supporting
documentation of the remediation.
After reviewing the evidence, I find that Respondent failed to demonstrate the CP system
provided a level of CP that complied with the § 192.463(a). During the November 2022 on-site
inspections, PHMSA observed and photographed the operator measuring pipe-to-soil potentials
less than -850mV for both systems. Respondent does not dispute that to show its CP systems are
providing adequate protection, the CP readings should be equal to or more than -850mV because
-850mV is the appropriate threshold for pipe-to-soil potential necessary to prevent significant
corrosion for the systems at issue. While Respondent argues it was unaware of the deficiencies
because previous readings were more than -850mV, Respondent does not refute that its practice
of using direct-bonded anodes and measuring potentials in soils near and directly above the
anodes may have resulted in inaccurate measurements in the past. The previously recorded
values of more than -850mV, therefore, do not demonstrate that the CP systems complied with
the regulatory standard up and until PHMSA’s inspection. Ultimately, regardless of AmeriGas’
lack of prior indication of deficient CP readings, the readings taken during the inspection showed
Respondent’s CP systems were inadequate to provide a level of CP that complies with one or
more of the applicable criteria contained in Appendix D of section 192.
Accordingly, after considering all of the evidence, I find that AmeriGas violated 49 C.F.R.
§ 192.463 by failing to provide a level of CP that complied with one or more of the applicable
criteria contained in Appendix D of Part 192.
Item 6. The Notice alleged that Respondent violated 49 C.F.R. § 192.465(a), which states:
§ 192.465 External corrosion control: Monitoring.
(a) Each pipeline that is under cathodic protection must be tested at least
once each calendar year, but with intervals not exceeding 15 months, to
determine whether the cathodic protection meets the requirements of §
192.463. However, if tests at those intervals are impractical for separately
protected short sections of mains or transmission lines, not in excess of 100
feet (30 meters), or separately protected service lines, these pipelines may
be surveyed on a sampling basis. At least 10 percent of these protected
structures, distributed over the entire system must be surveyed each
calendar year, with a different 10 percent checked each subsequent year, so
that the entire system is tested in each 10-year period.
The Notice alleged that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each
pipeline under CP each calendar year at intervals not to exceed 15 months for two of its systems.
Specifically, the Notice alleged that AmeriGas failed to conduct CP testing on its Coconut
Grove (Maui) pipeline in 2021 and that it failed to perform cathodic protection testing on its
Wapahu Shopping Center (Oahu) pipeline since 2018.



Respondent did not contest this allegation of violation. Accordingly, after considering all of the
evidence, I find that Respondent violated 49 C.F.R. § 192.465(a) by failing to test each pipeline
under CP each calendar year.
Item 7. The Notice alleged that Respondent violated 49 C.F.R. § 192.467(a), which states:
§ 192.467 External corrosion control: Electrical isolation.
(a) Each buried or submerged pipeline must be electrically isolated from
other underground metallic structures, unless the pipeline and the other
structures are electrically interconnected and cathodically protected as a
single unit.
The Notice alleged that Respondent violated 49 C.F.R. § 192.467(a) by failing to provide
adequate isolation between its Pearl Kai (Oahu) system and its buried metallic support structures.
Specifically, the Notice alleged that during the November 14, 2022 on-site inspection, the pipe
was visibly shorted to two “uni-strut" type pipe supports that were in direct contact with the soil.
In addition, the Notice alleged that the pipe was shorted to an adjacent bridge girder.
Respondent did not contest this allegation of violation. Accordingly, after considering all of the
evidence, I find that Respondent violated 49 C.F.R. § 192.467 by failing to provide adequate
electrical isolation for its Pearl Kai system.
Item 8 The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a), which states:
§ 192.481 Atmospheric corrosion control: Monitoring.
(a) Each operator must inspect and evaluate each pipeline or portion of
the pipeline that is exposed to the atmosphere for evidence of atmospheric
corrosion, as follows:
Pipeline type: Then the frequency of inspection is:
(1) Onshore other than a
Service Line
At least once every 3 calendar years, but with
both intervals not exceeding 39 months.
(2) Onshore Service Line At least once every 5 calendar years, but with
intervals not exceeding 63 months, except as
provided in paragraph (d) of this section.
(3) Offshore At least once each calendar year, but with
intervals not exceeding 15 months.
The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a) by failing to complete
atmospheric corrosion inspections at the required intervals for two of its systems: Coconut Grove
(Maui) and Wahiawa Town Center (Oahu). Specifically, the Notice alleged that the most recent
documented atmospheric corrosion inspection for Coconut Grove was on January 8, 2018, and
that there were records for inspections of Wahiawa Town Center on January 8, 2014, and July
28, 2020, which exceeded the 39-month deadline.



Respondent contested the allegation of violation in part. Respondent did not contest PHMSA’s
allegation that it did not have the required documentation of atmospheric corrosion inspections
of the Coconut Grove and Waipahu Town Center systems within a 39-month interval.
Respondent provided additional inspection records demonstrating that the Coconut Grove system
was inspected on September 18, 2022, and noted that it transitioned to an electronic work order
tracking system from 2019 to 2021 and “[d]uring this period some locations misunderstood the
expectations for continued documentation of pipeline related activities on the paper forms…in
addition to the new electronic work order system.”
Respondent’s records indicate that the inspections of Coconut Grove were conducted on January
8, 2018, and September 18, 2022, an interval of 56 months. The records show that the
inspections of the Wahiawa Town Center inspections were conducted on January 8, 2014, and
July 28, 2020, an interval of 78 months. Section 192.481(a) requires operators to inspect onshore
pipelines that are not service lines at least once every three calendar years, at intervals not to
exceed 39 months. Therefore, even with the additional records provided, Respondent exceeded
the required three calendar years, not to exceed 39 months, interval between inspections for the
Coconut Grove and Wahiawa Town Center facilities.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.481(a) by failing to complete atmospheric corrosion inspections at the required intervals
for two of its systems.
Item 10. The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1), which states:
§ 192.619 Maximum allowable operating pressure: Steel or plastic
pipelines.
(a) No person may operate a segment of steel or plastic pipeline at a
pressure that exceeds a maximum allowable operating pressure (MAOP)
determined under paragraph (c), (d), or (e) of this section, or the lowest of
the following: (1) The design pressure of the weakest element in the
segment, determined in accordance with subparts C and D of this part.
However, for steel pipe in pipelines being converted under § 192.14 or
uprated under subpart K of this part, if any variable necessary to determine
the design pressure under the design formula (§ 192.105) is unknown, one
of the following pressures is to be used as design pressure:
The Notice alleged that Respondent violated 49 C.F.R. § 192.619(a)(1) by operating a segment
of steel or plastic pipeline at a pressure that exceeds a MAOP determined under paragraph (c),
(d), or (e) of § 192.619. Specifically, the Notice alleged that, according to operator records, the
systems' established MAOPs are 10 psi, which is the maximum allowable inlet pressure of the
second-stage service regulators (Fisher R622-DFF with a labeled maximum inlet pressure of 10
psi). During the November 2022 on-site inspection, PHMSA observed and documented clock
gauges showing the operating pressures of several systems operating at pressures greater than 10
psi in five separate instances.
Respondent contested the allegation of violation in part. In the Response and Supplemental



Response, Respondent asserted the clock gauge used to measure the pressure in one instance (the
Ewa Point Marketplace) was defective and, when replaced, the pressure measured was less than
the MAOP.
PHMSA’s Western Region reviewed the documents provided by Respondent and, in a Region
Recommendation, dated September 5, 2023, concluded that based on the information provided
the evidence supported Respondent’s argument that the EWA Point Marketplace system was not
operating above the MAOP. I agree. Respondent did not contest the other four instances of
violation.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.619(a)(1) by operating a segment of steel or plastic pipeline at a pressure that exceeds a
MAOP determined under paragraph (c), (d), or (e) of § 192.619.
Item 12. The Notice alleged that Respondent violated 49 C.F.R. § 192.723(b)(1), which states:
§ 192.723 Distribution systems: Leakage surveys.
(a) . . . .
(b) The type and scope of the leakage control program must be
determined by the nature of the operations and the local conditions, but it
must meet the following minimum requirements:
(1) A leakage survey with leak detector equipment must be conducted
in business districts, including tests of the atmosphere in gas, electric,
telephone, sewer, and water system manholes, at cracks in pavement and
sidewalks, and at other locations providing an opportunity for finding gas
leaks, at intervals not exceeding 15 months, but at least once each calendar
year.
The Notice alleged that Respondent violated 49 C.F.R. § 192.723(b)(1) by failing to conduct leak
surveys of its systems in business districts at intervals not exceeding 15 months but at least once
each calendar year. Specifically, the Notice alleged that Respondent did not conduct leak surveys
at (1) the Shops at Wailea (Maui) location in 2020, (2) the Tosei (Maui) location in 2020, and (3)
the Shops at Mauna Lani (Hawaii) location in 2019, 2020, or 2021.
Respondent did not contest this allegation of violation. Accordingly, after considering all of the
evidence, I find that Respondent violated 49 C.F.R. § 192.723(b)(1) by failing to conduct leak
surveys of its systems in business districts at the mandatory intervals.
Item 14. The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a)(2), which states:
§ 192.739 Pressure limiting and regulating stations: Inspection and
testing.
(a) Each pressure limiting station, relief device (except rupture discs),
and pressure regulating station and its equipment must be subjected at
intervals not exceeding 15 months, but at least once each calendar year, to
inspections and tests to determine that it is –



(1) . . . .
(2) Adequate from the standpoint of capacity and reliability of operation
for the service in which it is employed;
The Notice alleged that Respondent violated 49 C.F.R. § 192.739(a)(2) by failing to correct
deficiencies identified during the inspection of the regulating equipment at Shops at Wailea
(Maui) system. Specifically, the Notice alleged that the operator personnel who conducted the
regulator inspection of that system recognized it was inadequate from the standpoint of capacity
and reliability for the service in which it is employed and, on March 19, 2019, generated a Sales
and Service Order stating that Respondent "need to install a monitoring regulator." The Notice
alleged that Respondent was aware as early as March 19, 2019, that the regulating equipment as
it was configured at the Shops of Wailea (Maui) system was inadequate but failed to correct it by
November 12, 2022.
Respondent did not contest this allegation of violation. Accordingly, after considering all of the
evidence, I find that Respondent violated 49 C.F.R. § 192.739(a)(2) by failing to correct
deficiencies identified during the inspection of the regulating equipment at Shops at Wailea
(Maui) system.
Item 15. The Notice alleged that Respondent violated 49 C.F.R. § 192.747(a), which states:
§ 192.747 Valve maintenance: Distribution systems.
(a) Each valve, the use of which may be necessary for the safe operation
of a distribution system, must be checked and serviced at intervals not
exceeding 15 months, but at least once each calendar year.
The Notice alleged that Respondent violated 49 C.F.R. § 192.747(a) by failing to inspect or
record the inspection of valves that might be needed in an emergency annually at intervals not to
exceed 15 months. Specifically, the Notice alleged that (1) the Coconut Grove (Maui) system’s
worksheets were not completed in 2019, (2) the Tosei (Maui) system’s worksheets were not
completed in 2020, and (3) the Residences of Laule-a (Hawaii) system’s worksheets were not
completed in 2021.
Respondent contested the allegation of violation in part. In the Response, Respondent located
inspection records showing valves had been inspected at the correct intervals for one of the three
facilities cited in the Notice (Coconut Grove). In its Supplemental Response, Respondent pointed
to its transition to a new electronic work order tracking system from 2019 to 2021 as the reason it
is unable to demonstrate completion of the two other valve inspections.
After reviewing the evidence, I find the Coconut Grove inspection records show the valves were
inspected within the required timeframe. Respondent was unable to demonstrate that the valves
at the Tosei and Residences of Laule-a facilities were serviced at the required intervals.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.747(a) by failing to inspect or record the inspection of valves that might be needed in an
emergency annually at intervals not to exceed 15 months in two instances.



Item 17. The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) which states:
§ 192.805 Qualification program.
Each operator shall have and follow a written qualification program.
The program shall include provisions to:
(a) . . . .
(b) Ensure through evaluation that individuals performing covered tasks
are qualified;
The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through
evaluation that individuals performing tasks were qualified. Specifically, the Notice alleged that
PHMSA observed worksheets where the operator inspected pressure-regulating equipment.
When asked for the corresponding qualification records for that task, the relevant operator
personnel stated that he was not qualified for the task, and there was nothing on the regulator
inspection worksheets suggesting that he worked under the span of control of a qualified
individual.
Respondent did not contest this allegation of violation. Accordingly, after considering all of the
evidence, I find that Respondent violated 49 C.F.R. § 19192.805(b) by failing to ensure that
individuals performing tasks had been evaluated and could perform the assigned covered tasks.
Item 18. The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b), which states:
§ 192.805 Qualification program.
Each operator shall have and follow a written qualification program.
The program shall include provisions to:
(a) . . . .
(b) Ensure through evaluation that individuals performing covered tasks
are qualified;
The Notice alleged that Respondent violated 49 C.F.R. § 192.805(b) by failing to ensure through
evaluation that individuals performing covered tasks were qualified to recognize and react to
abnormal operating conditions (AOC), which is a requirement to be qualified under § 192.803.
Specifically, the Notice alleged that Respondent (1) failed to train and qualify the operator of
record for odorant testing for the Maui systems on how to recognize and respond to inadequate
levels of odorization, which is an AOC relevant to that task, and (2) failed to train and qualify the
operator of record for corrosion control practices for its Oahu systems to recognize and test for
shorted pipe, an AOC relevant to that task.
Respondent contested this allegation of violation. Respondent, in its Response, provided
additional information and training records. Respondent claimed that “[a]ll operator qualified
employees who performed OQ tasks on the Hawaiian Islands underwent qualification training within
the five years prior to the November 2022 site visits performed by PHMSA Respondent did not
provide any records that the relevant named employees were OQ qualified to perform any tasks
at the time of the inspection. In its Supplemental Response, Respondent did provide the OQ
Field Evaluation/Qualification Report Forms for one of the employees demonstrating that after



the inspection, on August 17, 2023, he underwent OQ qualification for (1) “Odorization –
Testing Levels Using an Instrument – (Odorator),” (2) “Corrosion Control – Applying Cathodic
Protection” and (3) “Corrosion Control – Measure Pipe to Soil Potential.” Respondent did not
provide any documentation regarding the other named employee.
While the Response described how to appropriately interpret the odor sampling equipment
values, it failed to address the specific allegations and evidence in the Notice. The Notice
detailed observations of operator personnel who could not describe what values are outside of an
acceptable range, an AOC relevant to the odorant testing task. In addition, Respondent’s training
and qualification exam materials for the odorant testing task make no mention of AOCs or
appropriate responses.3 Moreover, the operator personnel collecting CP readings could not
recognize and respond to a shorted pipe, which is an AOC for the corrosion control task. Again,
the Response did not address the issue that operator personnel were unable to recognize and
respond AOCs regarding the covered tasks during the November 2022 inspections. PHMSA
observations in the field indicate the Respondent’s qualification program did not ensure through
evaluation that individuals performing covered tasks were qualified to recognize and perform
AOCs for at least two covered tasks. Finally, Respondent’s qualification exam materials do not
show that the relevant individuals were OQ qualified to perform any tasks at the time of the
inspection.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 192.805(b) by failing to ensure through evaluation that individuals performing covered tasks
are qualified.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.4
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue
doing business; the good faith of Respondent in attempting to comply with the pipeline safety
regulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA. In
addition, I may consider the economic benefit gained from the violation without any reduction
because of subsequent damages, and such other matters as justice may require. The Notice
proposed a total civil penalty of $550,100 for the violations cited above.
3 Violation Report, Exhibit P.
4 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.



Item 4: The Notice proposed a civil penalty of $75,200 for Respondent’s violation of 49 C.F.R.
§ 192.453 by failing to ensure the operation and maintenance of its CP systems were carried out
by a person qualified in corrosion control methods.
Respondent contested this allegation of violation. Respondent did not set forth any argument for
reduction or withdrawal of the civil penalty, apart from withdrawal of the underlying allegation
of violation. For the reasons described above, I find Respondent in violation of § 192.453.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $75,200 for the violation of 49 C.F.R. § 192.453.
Item 8: The Notice proposed a civil penalty of $35,700 for Respondent’s violation of 49 C.F.R.
§ 192.481(a), for failing to complete atmospheric corrosion inspections at the required intervals
for two of its systems: Coconut Grove (Maui) and Wahiawa Town Center (Oahu).
Respondent contested this allegation of violation in part. Respondent did not set forth any
argument for reduction or withdrawal of the civil penalty apart from withdrawal of the
underlying allegation of violation. For the reasons described above, I find Respondent in
violation of § 192.481(a). Accordingly, having reviewed the record and considered the
assessment criteria, I assess Respondent a civil penalty of $35,700 for the violation of 49 C.F.R.
§ 192.481(a).
Item 10: The Notice proposed a civil penalty of $168,600 for Respondent’s violation of 49
C.F.R. § 192.619(a)(1), for failing to operate several systems at pressures less than the pipeline’s
MAOP.
Respondent contested the allegation of violation in part. In its Response, Respondent asserted the
clock gauge used to measure the pressure in one instance (the Ewa Point Marketplace) was
defective and, when replaced, the pressure measured was less than the MAOP. Respondent did
not contest the other four instances of violation.
Having reviewed the record and considered the assessment criteria and Region
Recommendation, I find that a reduction to the number of instances from five to four is
warranted. Accordingly, I assess Respondent a reduced civil penalty of $162,300 for the
violation of 49 C.F.R. § 192.619(a)(1).
Item 12: The Notice proposed a civil penalty of $83,400 for Respondent’s violation of 49 C.F.R.
§ 192.723(b)(1), for failing to conduct leak surveys of its systems in business districts at intervals
not exceeding 15 months, but at least once each calendar year.
Respondent neither contested the allegation nor presented any evidence or argument justifying a
reduction in or elimination of the proposed penalty. Accord
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