Enstar Natural Gas Company — Pipeline Safety Interpretation

Page 1U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Avenue, SE Washington, D.C. 20590 JUL - 2 2009 Mr. David W. Bredin Director of Operations Enstar Natural Gas Company P.O. Box 190288 40 I E. International Airport Road Anchorage, AK 99519-0288 Dear Mr. Bredin: In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) you requested an interpretation of 49 CFR § 191.3 of the Federal pipeline safety regulations. You stated that a number of structural fires occur every year in Enstar's service area that cause a release of natural gas. You stated that although these structural fires often result in over $50,000 of property damage meeting the threshold in the § 191.3 definition of an incident, these structural fires are not caused from the release of natural gas. Rather, these fires are caused by other events such as a chimney fire, arson, or an electrical short and then the fire subsequently bums the gas meter or the plastic service line riser melts causing the release of natural gas. You have asked whether a release of gas meeting the applicable threshold caused by a structural fire that started for reasons other than a gas leak is a reportable incident. Pursuant to Chapter 601, Title 49, United States Code, PHMSA has responsi bility for protecting against risks to life, property, and the environment posed by pipelines. In carrying out its responsibilities, PHMSA has established requirements for the reporting of incidents, safety related conditions, and annual pipeline summary data by operators of gas pipeline facilities located in the United States or Puerto Rico, including pipelines within the limits of the Outer Continental Shelf as that term is defined in the Outer Continental Shelf Lands Act (43 U.S.c. 1331). Under 49 CFR Part 191, pipeline operators are required to report releases of gas from DOT regulated pipelines (Le., up to the outlet of the meter) that meet the applicable threshold in § 191.3 regardless of the cause of the event that caused the release. Therefore, under current requirements, Enstar needs to continue reporting incidents such as the ones described above consistent with past general guidance to industry from our agency on this topic. However, we are continuing to examine our policy for reporting these events to better improve the overall usefulness of incident information collection and should our policy change, we will alert industry through advisory bulletins or federal register notification, as appropriate. We appreciate your request for clarification on this topic. The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarification of the Regulations (49 CFR Parts 190-199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations.#

Page 2., 2 If I can further assist you with this, or any other pipeline safety regulatory matter, please contact me at (202) 366-4046. Sincerely, o .Ga Director, Office of Regulations The Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety provides written clarification of the Regulations (49 CFR Parts 190·199) in the form of interpretation letters. These letters reflect the agency's current application of the regulations to the specific facts presented by the person requesting the clarification. Interpretations do not create legally-enforceable rights or obligations and are provided to help the public understand how to comply with the regulations.#

Page 3Natural Gas Company 401 E. International Airport Road P.O. Box 190288 Anchorage, AK 99519-0288 (907) 277-5551 www.enstarnaturalgas.com November 21, 2006 Mr. Ted Wilke, Acting Associate Administrator Office of Pipeline Safety Pipeline and Hazardous Material Safety Administration U.S. Department of Transportation 400 Seventh Street, S.W., Rm. 2103 Washington D.C. 20590-0001 RE: Clarification Request on Reporting Incidents Dear Mr. Wilke, This letter is a request for clarification on whether certain situations meet the definition of "Incident" as defined in 49CFR 191.3 and need to be reported per 49CFR 191.5. Multiple times annually there are structure fires in ENSTAR's Service Area which cause a release of natural gas (i.e. the gas meter burns or polyethylene service line riser melts and there is a release of natural gas) and there is more than $50,000 in property damage to the structure. The cause of the structure fire is not from the release of natural gas nor does natural gas contribute to the damage caused by the fire. In all cases, the cause of the fire is not natural gas related, i.e. the cause may be electrical, chimney fire, arson etc. It has been ENSTAR's practice to report these situations as Incidents, even though the cause of the fire it not related to natural gas. We believe these situations meet the definition of Incident per 49CFR 191.3, i.e. there has been an event that involves the release of gas from a pipeline and the estimated property damages is more than $50,000. We have recently been questioned by the PHMSA Western Region Office as to why we are reporting these situations as Incidents. We respectfully request direction as to whether these situations meet the definition of Incident and whether they need to be reported as such. We would prefer not to report these situations unless the cause of the fire is from the release of natural gas or natural gas contributes significantly to the damage. Thank you in advance from your prompt attention to this clarification request. Should you have any questions do not hesitate to call me at 907-264-3745. Sincerely, E~lLPanY David W. Bredin Director of Operations cc: Chrls;Hoidal PHMSA Western Region Director ~#