AGUILAR, TOWN OF — Safety Order

52024028NOPSO_Closure Letter_01142026_(24-311812)_text.pdf, page 1Official PDFU.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration VIA ELECTRONIC MAIL TO: AGUILARCOMAYOR@GMAIL.COM 12300 W. Dakota Ave., Suite 340 Lakewood, CO 80228 January 14, 2026 Erlinda Encinias Mayor Town of Aguilar 101 W. Main St. PO Box 538 Aguilar, CO 81020 CPF 5-2024-028-NOPSO Closure Letter Dear Mayor Encinias: On March 24, 2025, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Consent Order incorporating the terms of the Consent Agreement between PHMSA and the Town of Aguilar in the above-referenced case. This Order included a Compliance Order requirement for the Town of Aguilar to take certain corrective actions on its pipeline. Per the terms of the Consent Agreement, the Consent Agreement would terminate once the Corrective Measures in Section II were satisfied. On December 16, 2025, the Town of Aguilar submitted final documentation to demonstrate all Corrective Measures were satisfied. Accordingly, the Consent Agreement is terminated, and this case is now closed. Thank you for your cooperation in this matter. Sincerely, Dustin Hubbard Director, Western Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration#

52024028NOPSO_Closure Letter_01142026_(24-311812)_text.pdf, page 2cc: PHP-60 Compliance Registry PHP-500 J. Luo (#24-311812) Casey Hensley, COPUC Program Manager - Casey.Hensley@state.co.us Stephanie Coca, Town Clerk - aguilarclerk@gmail.com#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 1Official PDFMarch 24, 2025 VIA ELECTRONIC MAIL TO: aguilarcomayor@gmail.com Erlinda Encinias Mayor Town of Aguilar 101 W. Main St. PO Box 538 Aguilar CO, 81020 CPF No. 5-2024-028-NOPSO Dear Mayor Encinias: Enclosed please find a Consent Order incorporating the terms of the Consent Agreement between the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Town of Aguilar, which was executed on January 10, 2025. Service of the Consent Order and Consent Agreement by electronic mail is deemed effective upon the date of transmission and acknowledgment of receipt, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, for Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosures: Consent Agreement and Consent Order cc: Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 2Tonya Jez, Supervisor, Western Region, Office of Pipeline Safety, PHMSA Casey Hensley, Program Manager, Colorado Public Utilities Commission, casey.hensley@state.co.us Sara Porras, Deputy Clerk, aguilardeputyclerk@gmail.com CONFIRMATION OF RECEIPT REQUESTED#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 3U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ) In the Matter of ) ) Town of Aguilar, Colorado, ) ) Respondent. ) ) CPF No. 5-2024-028-NOPSO CONSENT ORDER By letter dated July 23, 2024, the Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety (PHMSA), issued a Notice of Proposed Safety Order (Notice) to Town of Aguilar, Colorado (TOA or Respondent). In accordance with 49 C.F.R. § 190.239, the Notice alleged that conditions appear to exist on certain pipeline facilities operated by Respondent that pose 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 timely requested an informal consultation. During informal consultation meetings from September 2024 to November 2024, the parties engaged in good-faith discussions that have resulted in the Consent Agreement attached to this Consent Order that settles the allegations in the Notice. Accordingly, the Consent Agreement is hereby approved and incorporated by reference into this Consent Order. The Town of Aguilar is hereby ordered to comply with the terms of the Consent Agreement, pursuant to its terms. Pursuant to 49 U.S.C. § 60101, et seq., failure to comply with this Consent Order may result in the assessment of additional civil penalties as set forth in 49 U.S.C. § 60122 and 49 C.F.R. § 190.223, 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. for Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 4U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of ) Town of Aguilar, ) CPF No. 5-2024-028-NOPSO ) ) ) Respondent. ) CONSENT AGREEMENT On July 23, 2024, pursuant to 49 C.F.R. § 190.239, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS or Agency), issued a Notice of Proposed Safety Order (Notice) to the Town of Aguilar (TOA or Respondent). The Notice alleged that conditions existed on Respondent's pipeline system that proposed a pipeline integrity risk that could potentially affect public safety, property, or the environment. The Notice also proposed that TOA take certain corrective measures to remedy the alleged conditions and ensure that the public, property, and the environment were protected from the potential risk. On August 26, 2024, and October 22, 2024, TOA responded to the Notice by timely submitting a written request for a 30-day extension and request for informal consultations under 49 C.F.R. § 190.239(b)(2). Informal consultations were held on September 4, 2024, and November 4, 2024. As a result of the informal consultations, PHMSA and the Respondent (the 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 in the public interest. Therefore, pursuant to 49 C.F.R. Part 190, without adjudication of any issue oflaw or fact, and upon consent and agreement of the Parties, the Parties agree to the following terms and conditions.#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 5I. General Provisions 1. Respondent acknowledges that as the operator of the pipeline facilities subject to the Notice, Respondent and its referenced pipeline facilities are 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. 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 of 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 for the Dispute Resolution provisions set forth herein. 5. This Agreement shall apply to and be binding upon PHMSA and Respondent, 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 Respondent's officers, employees, and agents whose duties might reasonably include compliance with this Agreement. 6. For all transfers of ownership or operating responsibility of Respondent's pipeline system referenced herein, Respondent will provide a copy of this Agreement to the prospective transferee at least 30 days prior to such transfer and provide written notice of the transfer to the PHMSA Western Region Director (Director) no later than 30 days after the transfer occurs. 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#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 6to 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 Respondent pursuant to the Federal pipeline safety laws, the regulations and orders issued thereunder, or any other provision of Federal or State law. 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. Respondent 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. Respondent 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. Except as set forth herein, this Agreement does not constitute a finding of violation of any other federal law or regulation and may not be used in any civil proceeding of any kind as evidence or proof of any fact, fault or liability, or as evidence of a violation of any law, rule, regulation, or requirement, except in a proceeding to enforce the provisions of this Agreement or in future PHMSA enforcement actions. 12. 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. Respondent 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.#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 7II. Corrective Measures: 13. Upon issuance of the Consent Order, the Respondent agrees to perform the following Corrective Measures set forth below. A. B. C. Since the issuance of the Notice, the City of Walsenburg's (Walsenburg) has provided monthly odorant records to TOA from January 2022 through August 2024. Following the Effective Date of this agreement, TOA must conduct the required testing to verify odorant levels meet the requirements of§ 192.625(a) to ensure the safety of its pipelines. TOA must submit monthly odorant records to the Director biannually, at intervals not to exceed 6 months. The testing must be conducted by an operator qualified (OQ) personnel possessing the requisite operator qualifications as required by § 192.805(b). If odorant levels are determined to not meet the requirements of § 192.625(a), TOA shall notify PHMSA and submit a proposed plan for compliance within 30 days to be approved by the Director. Following the issuance of the Notice, TOA has established written procedures to minimize the hazard resulting from a gas pipeline emergency, as required by § 192.615(a), and submitted these procedures to PHMSA on October 25, 2024. TOA has not had an OQ gas operator since August 2022. On October 18, 2022, TOA entered into an intergovernmental agreement (IGA) with Walsenburg to receive assistance from Walsenburg's gas department, including emergency response call outs. Within one year of the Effective Date of this agreement, TOA must hire and train an OQ gas operator employed by the Town to respond to emergencies, ensure that the operator is knowledgeable about the emergency procedures, and verify that the training is effective, as required by § 192.615(b)(2). Once per quarter, at intervals not to exceed 3 months, TOA will submit a written summary detailing progress on the hiring and training of the OQ gas operator until the OQ gas operator has been hired and has completed all required operator qualifications. Since the issuance of the Notice, Black Hills Energy has provided annual inspection and testing records for TOA's district pressure limiting and regulating station on July 9, 2021, May 26, 2022, June 5, 2023, and July 3, 2024. Black Hills Energy has also provided annual leak survey records on September 24, 2021, October 7, 2022, September 7, 2023, and August 23, 2024. The August 23, 2024, survey indicated two Grade 3 Non-Hazardous leaks. These Grade 3 Non-Hazardous leaks must be scheduled for permanent repair, with all required repairs completed by August 23, 2025, in accordance with TOA's Maintenance#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 8D. E. 723 procedure. TOA shall submit repair records to the Director within 30 days of completing the repairs. Following the Effective Date of this agreement, TOA must conduct the required leakage surveys on its distribution lines in accordance with § 192.723 to ensure the safety of its pipelines. TOA must repair leaks in accordance with its Maintenance 723 Procedure, which specifies the following repair schedule for completion: i. Grade 1 Hazardous leaks must be continually monitored until repaired. Prompt remedial action must be undertaken for leaks classified as hazardous. ii. m. Grade 2 Intermediate leaks must be scheduled for permanent repair within two work weeks from the date of discovery. Grade 3 Non-Hazardous leaks must be scheduled for permanent repair within one year from the date of discovery. During the scheduled repair period, these leaks will be re-evaluated on a six-month interval or by the end of the calendar year of discovery, whichever occurs first. TOA must submit to the Director all leak survey results and a report detailing leak repairs annually, at intervals not to exceed 15 months. Since the issuance of the Notice, Black Hills Energy conducted an annual cathodic protection (CP) survey on October 10, 2024. The annual survey identified a CP deficiency. Specifically, Black Hills Energy Senior Corrosion Tech noted: "CP Zone 4 with test point at 401 East St. has no cathodic protection and has seemed to have been isolated off with a read of -0.317 VCSE". According to § 192.465(d), TOA must document and repair the identified deficiency by December 31, 2025. TOA shall submit repair records to the Director within 30 days of completing the repairs. Following the Effective Date of this agreement, TOA must conduct annual CP surveys on all distribution lines according to § 192.465 to ensure the safety of the pipelines. In instances where inadequate potentials are a result of an electrical short to an adjacent foreign structure, a rectifier malfunction, an interruption of power source, or an interruption of CP current due to other non-systemic or location- specific causes, TOA must document and repair these instances in accordance with the timelines prescribed in § 192.465(d). TOA must submit to the Director all CP survey results and a report detailing repairs annually, at intervals not to exceed 15 months. Should TOA receive notice from either Walsenburg or Black Hills Energy that either entity will no longer be able to provide supportive services to TOA as described above, TOA shall immediately notify PHMSA and submit a proposed plan for compliance within 30 days to be approved by the Director.#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 914. Reporting. TOA will submit documentation demonstrating compliance with each provision of paragraph 13 to the Director as specified in provisions A, B, C, D and E. 15. 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 the extension. The Director shall respond in writing to any such request. III. Review and Approval Process: 16. 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, Respondent will take all actions as approved by the Director, subject to Respondent's right to invoke the dispute resolution procedures with respect to any conditions the Director identifies. If the Director disapproves all or any portion of the submission, the Director will provide Respondent a written notice of the deficiencies. Respondent will correct all deficiencies within the time specified by the Director and resubmit it for approval. If the Director does not act on a submission or any document or plan submitted under this paragraph within 60 days of submission and Respondent has indicated the submission requires timely action, the Director will provide an estimated date of completion or otherwise provide guidance to Respondent ton how to proceed. IV. Dispute Resolution: 17. The Director and Respondent will informally attempt to resolve any disputes arising under this Agreement, including any decision of the Director under the terms of Section II (Corrective Measures). If Respondent and the Director are unable to informally resolve the dispute within 15 calendar days after the dispute is first raised, in writing, to the Director, Respondent may submit a written request for a determination resolving the dispute from the Associate Administrator for Pipeline Safety, PHMSA. Such request must be made in writing and provided to the Director, counsel for the Western Region, and to the Associate Administrator for Pipeline Safety, no later than 10 calendar days from the 15-day deadline for informal resolution referenced in this paragraph. Along with its request, Respondent must provide the Associate Administrator with all information Respondent believes is relevant to the dispute. Decisions of the Associate Administrator under this paragraph will constitute final agency action. The existence of a dispute and 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. V. Enforcement: 18. This Agreement is subject to all enforcement authorities available to PHMSA under 49 U.S.C. § 60101, et seq., and 49 C.F.R. Part 190. All work plans and associate schedules set forth or referenced in Section II will be automatically incorporated into this Agreement and are enforceable in the same manner.#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 10VI. Effective Date: 19. Effective Date, as used herein, is the date on which the Consent Order is issued by the Associate Administrator, PHMSA, incorporating the terms of this Agreement. VII. Recordkeeping and Information Disclosure: 20. Unless otherwise required in this Agreement, Respondent agrees to maintain records demonstrating compliance with all requirements of this Agreement for a period of at least five (5) years following completion of all work to be performed. For any reports, plans, or other 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. VIII. Modification: 21. 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. 22. Respondent agrees to perform all the terms of this Agreement within the timeframes established within this Agreement, including pursuant to modifications under Section VIII, unless performance is delayed by a force majeure. For purposes of this Agreement, a force majeure is defined by an event arising from causes beyond the control of the Operator, or any entity controlled by Operator or Operator's contractors, which delays or prevents performance of any obligation under this Agreement despite Respondent's commercially reasonable efforts to fulfill the obligation. 23. If a force majeure event occurs or has occurred that may delay the performance of any term of this Agreement beyond the approved timeframe, Respondent shall notify the Director, in writing, within 5 business days of when Respondent knew that the event might cause a delay. Such notice shall identify the cause of the delay or anticipated delay and the anticipated duration of the delay, state the measures taken or to be taken to prevent or minimize the delay, and estimate the timetable for implementation of those measures. Failure to comply with the notice provision of this paragraph and to undertake reasonable efforts to avoid and minimize the delay shall waive any claim of force majeure by Respondent. 24. If the Director determines, upon notification by Respondent, that a delay or anticipated delay in performance is or was attributable to a force majeure, then the Director will extend the time period for the performance of that term for a reasonable period. The Director will notify Respondent, in writing, of the length of any extension of performance of such terms#

52024028NOPSO_Consent Agreement and Order_03242025_(24-311812)_text.pdf, page 11affected by the force majeure. Any such extensions shall not alter Respondent's obligation to perform or complete other terms of this Agreement that are not affected by the force majeure. X. Termination: are satisfied, as reasonably and timely determined by the Director. The Agreement shall not This Agreement will remain in effect until the Corrective Measures in Section I terminate until the Director confirms, in writing, that the Agreement is terminated in accordance with this paragraph. Nothing in this Agreement prevents Respondent from completing any of the written confirmation from PHMSA when this Consent Agreement is terminated, and the Director obligations earlier than the deadlines provided for in this Agreement. Respondent may request will provide such confirmation. XI. Ratification: The Parties' undersigned representatives certify that they are fully authorized to to this document. enter into the terms and conditions of this Agreement and to execute and legally bind such party 27. The Parties hereby agree to all findings, conditions, and terms of this Agreement. For Town of Aguilar: Ertinda Epinias, Mayor, Town of Aguilar Date For PHMSA: Dustin Hubbard, Director, Westem Region, Office of Pipeline Safery Date#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 1Official PDFVIA E-MAIL TO: AGUILARCOMAYOR@GMAIL.COM July 23, 2024 Donald Gonzales Mayor Town of Aguilar 101 W. Main St. PO Box 538 Aguilar CO, 81020 CPF 5-2024-028-NOPSO Dear Mayor Gonzales: 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 your natural gas distribution system in Aguilar, Colorado to ensure pipeline safety. 1 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 720-963-3160. Sincerely, Dustin Hubbard Director, Western Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration Enclosure: Notice of Proposed Safety Order 1 The OPID for this asset is: 81 (Town of Aguilar).#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WESTERN REGION LAKEWOOD, CO 80228 ____________________________________ ) In the Matter of ) ) Town of Aguilar, ) CPF No. 5-2024-028-NOPSO ) Respondent ) ____________________________________) NOTICE OF PROPOSED SAFETY ORDER Background and Purpose Pursuant to Chapter 601 of title 49, United States Code, the Colorado Public Utilities Commission (COPUC) and the Pipeline and Hazardous Materials Safety Administration (PHMSA) have initiated an on-site inspection and information review of the safety of Town of Aguilar’s (TOA) natural gas distribution system in Aguilar, Colorado. As a result of the on-site inspection 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. Specifically, TOA failed to maintain records to indicate appropriate odorization of its combustible gases past September 2022. It is therefore unclear whether the combustible gas in TOA’s distribution lines is properly odorized, as required by § 192.625(a). Additionally, TOA failed to provide written procedures in response to a gas line emergency, as required by § 192.615(a). Consequently, TOA failed to train the appropriate operating personnel on emergency procedures and verify that the training was effective, as required by § 192.615(b)(2). Pursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of Proposed Safety Order, notifying you of the preliminary findings of the investigation, and proposing that you take measures to ensure that the public, property, and the environment are protected from the potential risk. Preliminary Findings • From July 18, 2023, to October 26, 2023, representatives of the Colorado Public Utilities Commission (COPUC), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected TOA’s natural gas distribution system in Aguilar, Colorado. The natural gas distribution system is composed of 8.25 miles of coated steel and PE mains and 272#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 3services. 7.25 miles of mains have diameters of 2” or less and 1 mile of mains have diameters of over 2” thru 4”. All services have a diameter of 1” or less. 2 • 49 C.F.R. § 192.625(a) states a combustible gas in a distribution line must contain a natural odorant or be odorized so that at a concentration in air of one-fifth of the lower explosive limit, the gas is readily detectable by a person with a normal sense of smell. Additionally, to ensure the proper concentration of odorant, § 192.625(f) requires each operator to conduct periodic sampling of combustible gases using an instrument capable of determining the percentage of gas in air at which the odor becomes readily detectable. Although TOA provided some gas odorization test records and monthly odorant readings from 2021 and 2022, it is unclear at this time if the combustible gas in TOA’s distribution lines is properly odorized as TOA failed to maintain records to indicate appropriate odorization of its combustible gases past September 2022. • Approximately 8 miles of TOA’s mains were installed from 1960-1969. Approximately 0.25 miles of main and 234 services were installed from 1990-1999. The remaining 38 services have been installed since 2020. Older pipelines have integrity issues due to the manufacturing process, aging coatings that can have coating disbondment, shielding of cathodic protection, and cathodic protection levels at less than 49 C.F.R. § 192.463 requirements. Without adequate odorization of natural gas, integrity issues leading to leaks could remain undetected. This would impair the serviceability or integrity of the pipelines leading to an increased threat of failure. • 49 C.F.R. § 192.615(a) states each operator shall establish written procedures to minimize the hazard resulting from a gas pipeline emergency and § 192.615(b)(2) states each operator shall train the appropriate operating personnel to assure that they are knowledgeable of the emergency procedures and verify that the training is effective. During the inspection, TOA failed to provide written procedures in response to a gas line emergency. Therefore, TOA failed to train the appropriate operating personnel on emergency procedures and verify that the training was effective, as required by § 192.615(b)(2). Furthermore, TOA did not have an operator qualified personnel to perform any operations and maintenance tasks. TOA indicated the town has not had a gas employee since August 2022. Without operating personnel possessing the requisite operator qualifications to perform operations and maintenance tasks, or adequate emergency response training, the consequence of any failure is greatly magnified. • TOA is unable to demonstrate if the combustible gas in TOA’s distribution lines is properly odorized. Unodorized gas poses an immediate threat to public safety and the environment. Without odorization, natural gas leaks cannot be easily detected by smell. This increases the likelihood that leaks could go unnoticed, leading to potentially catastrophic consequences such as explosions or fires. TOA must immediately conduct the required testing to verify odorant levels meet the requirements of § 192.625(a) to ensure the safety of the pipelines. 2 2022 Annual Report#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 4Proposed 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 manufacturer, 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, 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 pipeline without corrective measures would pose 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 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#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 5Be 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 5-2024-028-NOPSO 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 TOA a safety order incorporating the following remedial requirements with respect to the affected pipeline: 1. 2. 3. 4. 5. TOA must conduct the required testing to verify odorant levels meet the requirements of § 192.625(a) to ensure the safety of the pipelines. The testing must be conducted by an operator qualified personnel possessing the requisite operator qualifications as required by § 192.805(b). TOA must establish written procedures to minimize the hazard resulting from a gas pipeline emergency as required by § 192.615(a) and to train appropriate operating personnel on emergency procedures specific to TOA’s distribution system including but not limited to the location and operation of emergency valves as required by § 192.615(b)(2). TOA must conduct a leakage survey on all distribution lines according to § 192.723 to ensure the safety of the pipelines. In instances where leaks are discovered, Grade 1 leaks must be repaired or replaced/renewed immediately, Grade 2 leaks must be repaired or replaced/renewed within 1 year. Grade 3 leaks must be repaired or replaced/renewed within 2 years. TOA must conduct a cathodic protection survey on all distribution lines according to § 192.465 to ensure the safety of the pipelines. In instances where inadequate potentials are a result of an electrical short to an adjacent foreign structure, a rectifier malfunction, an interruption of power source, or an interruption of CP current due to other non- systemic or location-specific causes, TOA must document and repair these instances. TOA must take temporary pressure restrictions on TOA’s distribution lines. TOA must take a 20% reduction in operating pressure using the pipeline’s operating pressure. If TOA believes it cannot meet this requirement because it needs to maintain minimum flows to meet customer demands, it must immediately notify PHMSA and request approval, explaining the reason(s) why temporarily reducing pressure pursuant to the requirements set forth above is infeasible. In its written proposal to PHMSA, TOA must propose an alternative means to assure pipeline safety.#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 66. 7. 8. 9. 10. 11. Once TOA has completed corrective measures 1 and 3, TOA must notify the Director in writing and may request that the pressure restriction(s) be lifted. Within 30 days after a safety order is issued, develop and submit to the Director for approval a written remedial work plan that includes corrective measures. The work plan must include: (A) The performance of additional field testing, inspections, and evaluations to determine whether and to what extent the conditions described in this Notice are present elsewhere on the affected pipeline system. Make the results of the inspections, field excavations, and evaluations available to PHMSA or its representative; (B) The performance of repairs or other corrective measures that fully remediate the identified risk conditions. Include provisions for continuing long-term periodic testing and integrity verification measures to ensure the ongoing safe operation of the pipeline considering the results of the analyses, inspections, and corrective measures undertaken pursuant to the safety order; and (C) A proposed schedule for completion of the actions required by paragraphs (A) and (B) of this Item. Revise the remedial work plan as necessary to incorporate new information obtained during the evaluations and associated remedial activities. Submit any such plan revisions to the Director for prior approval. The Director may approve plan elements incrementally. The remedial work plan shall become incorporated into the safety order. Implement the work plan as it is approved by the Director, including any revisions to the plan. Submit quarterly reports to the Director that: (1) include 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 Director 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. Respondent may appeal any decision of the Director to the Associate Administrator for Pipeline Safety. Decisions of the Associate Administrator shall be final. 12. It is requested (not mandated) that TOA maintain documentation of the safety improvement costs associated with fulfilling this Safety Order and submit the total to Dustin Hubbard, Director, Western Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost#

52024028NOPSO_Notice of Proposed Safety Order_07232024_(24-311812)_text.pdf, page 7associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 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 Director, Western Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance Registry PHP-500 J. Luo, J. Berry (#24-311812) Tyra Avila, Town Administrator - aguilartownclerk@gmail.com Sara Porras, Deputy Clerk - aguilardeputyclerk@gmail.com Stephanie Coca, Assistant Administrator - aguilarassist@gmail.com Casey Hensley, COPUC Program Manager - Casey.Hensley@state.co.us __________________ Date issued#