# 2010 AL NG Program Evaluation - al2010ngprogramevaluation (Alabama; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA al2010ngprogramevaluation
- **title:** 2010 AL NG Program Evaluation - al2010ngprogramevaluation (Alabama; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2010-01-01
- **effective on:** Not available
- **summary:** 2010 PHMSA natural gas program evaluation for Alabama.
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1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2010 Natural Gas State Program Evaluation for Alabama Public Service Commission Document Legend PART: O -- Representative Date and Title Information A -- General Program Qualifications B -- Inspections and Compliance - Procedures/Records/Performance C -- Interstate Agent States D -- Incident Investigations E -- Damage Prevention Initiatives F -- Field Inspection G -- PHMSA Initiatives - Strategic Plan H -- Miscellaneous I -- Program Initiatives DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 1

2010 Natural Gas State Program Evaluation -- CY 2010 Natural Gas State Agency: Alabama Rating: Agency Status: Date of Visit: 05/02/2011 - 05/06/2011 Agency Representative: Wallace Jones, Sr., Director of Pipeline Safety PHMSA Representative: Don Martin Commission Chairman to whom follow up letter is to be sent: Name/Title: Lucy Baxley, President Agency: Alabama Public Service Commission Address: 100 N Union St, RSA Union City/State/Zip: Montgomery, Alabama 36104 60105(a): Yes 60106(a): No Interstate Agent: No INSTRUCTIONS: Complete this evaluation in accordance with the Procedures for Evaluating State Pipeline Safety Program. The evaluation should generally reflect state program performance during CY 2010 (not the status of performance at the time of the evaluation). All items for which criteria have not been established should be answered based on the PHMSA representative's judgment. A deficiency in any one part of a multiple part question should be scored as needs improvement. Determine the answer to the question then select the appropriate point value. If a state receives less then the maximum points, include a brief explanation in the space provided for general comments/regional observations. If a question is not applicable to a state, select NA. Please ensure all responses are COMPLETE and ACCURATE, and OBJECTIVELY reflect state program performance. Increasing emphasis is being placed on performance. This evaluation together with selected factors reported in the state's annual certification/agreement attachments provide the basis for determining the state's pipeline safety grant allocation. Field Inspection (PART F): The field inspection form used will allow different areas of emphasis to be considered for each question. Question 13 is provided for scoring field observation areas. In completing PART F, the PHMSA representative should include a written summary which thoroughly documents the inspection. Scoring Summary PARTS Possible Points Points Scored A General Program Qualifications 26 26 B Inspections and Compliance - Procedures/Records/Performance 25.5 25.5 C Interstate Agent States 0 0 D Incident Investigations 6 6 E Damage Prevention Initiatives 9 9 F Field Inspection 11 11 G PHMSA Initiatives - Strategic Plan 9.5 9.5 H Miscellaneous 3 3 I Program Initiatives 9 9 TOTALS 99 99 State Rating................................................................................................................................................... 100.0 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 2

PART A - General Program Qualifications Points(MAX) Score 1 Did the state submit complete and accurate information on the attachments to its most current 60105(a) Certification/60106 (a) Agreement? (NOTE: PHMSA Representative to verify certification/agreement attachments by reviewing appropriate state documentation. Score a deficiency in any one area as "needs improvement". Attachment numbers appear in parenthesis) Previous Question A.1, Items a-h worth 1 point each Yes = 8 No = 0 Needs Minor Improvement = 3-7 Needs Major Improvement = 2 a. State Jurisdiction and agent status over gas facilities (1) b. Total state inspection activity (2) c. Gas facilities subject to state safety jurisdiction (3) d. Gas pipeline incidents (4) e. State compliance actions (5) f. State record maintenance and reporting (6) g. State employees directly involved in the gas pipeline safety program (7) h. State compliance with Federal requirements (8) SLR Notes: No accuracy issues were found with the APSC's 2011 Cerification submittal documents. 8 8 2 Did the state have an adequate mechanism to receive operator reporting of incidents to ensure state compliance with 60105(a) Certification/60106(a) Agreement requirements (fatality, injury requiring hospitalization, property damage exceeding $50,000 - Mechanism should include receiving "after hours" reports)? (Chapter 6) Previous Question A.2 Yes = 1 No = 0 1 1 SLR Notes: Yes. APSC pipeline safety regulations requires operators to provide telephonic notice to the APSC when an incident occurs. An electronic log of incidents reported to the APSC is maintained by the administrative assistant. The APSC has a mechanism to receive and respond to after hour incident reports. 3 Has the state held a pipeline safety TQ seminar(s) in the last 3 years? (NOTE: Indicate date of last seminar or if state requested seminar, but T&Q could not provide, indicate date of state request for seminar. Seminars must be held at least once every 3 calendar years.) (Chapter 8.5) Previous Question A.4 Yes = 2 No = 0 SLR Notes: The APSC holds a seminar annually. The last seminar was conducted in December, 2010. 2 2 4 Were pipeline safety program files well-organized and accessible?(NOTE: This also includes electronic files) (Chapter 5) Previous Question A.5 Yes = 1 No = 0 1 1 SLR Notes: The APSC maintains hard copy files and electronic files. The inspection reports for 2010 were easy to access for a random selection of reports to review. All information requests were completed in a timely manner. 5 Did state records and discussions with the state pipeline safety program manager indicate adequate knowledge of PHMSA program and regulations? (Chapter 4.1, Chapter 8.1) Previous Question A.6 Yes = 2 No = 0 Needs Improvement = 1 2 2 SLR Notes: Yes. Wallace Jones, Administrator of the APSC, is excellent knowledge of the requirements in managing a pipeline safety program as outlined in the "Guidelines For States Participating in the Pipeline Safety Program". Wallace has been active supporting NAPSR initiatives. 6 Did the state respond in writing within 60 days to the requested items in the Chairman's letter following the Region's last program evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8 Yes = 1 No = 0 SLR Notes: The APSC responded in 57 days. 1 1 7 What actions, if necessary, did the State initiate as a result of issues raised in the Chairperson's letter from the previous year? Did actions correct or address deficiencies from previous year's evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8/A.9 Yes = 1 No = 0 DUNS: 961833431 2010 Natural Gas State Program Evaluation 1 1 Alabama Alabama Public Service Commission, Page: 3

SLR Notes: The APSC implemented the collection of data to monitor measures that will assist the APSC in determining the effectiveness of its pipeline safety program. In 2011 the APSC will begin trending the data. Personnel and Qualifications 8 Has each inspector fulfilled the 3 year TQ training requirement? If No, has the state been granted a waiver regarding TQ courses by the Associate Administrator for Pipeline Safety? (NOTE: If the State has new inspectors who have not attended all TQ courses, but are in a program which will achieve the completion of all applicable courses within 3 years of taking first course (5 years to sucessfully complete), or if a waiver has been granted by the applicable Region Director for the state, please answer yes.) (Chapter 4.4) Previous Question A.10 Yes = 3 No = 0 3 3 SLR Notes: Upon a review of the APSC's training records and information contained in the SABA training database, it appears that the APSC has completed the required training or is progressing toward the requirements within the expected timeframes. 9 Brief Description of Non-TQ training Activities: Info Only = No Points For State Personnel: ANGA Spring and Fall training classes were attended. Alabama One Call Alabama Public Awareness Cooperative Training (APACT). For Operators: Provide fire training and plastic fusion qualification. Provide safety training for adhoc requests. For Non-Operator Entities/Parties, Information Dissemination, Public Meetings: Provide fire training for fire fighting community or any entity that requests it. SLR Notes: See above. Info Only Info Only 10 Did the lead inspectors complete all required T&Q OQ courses and Computer Based Training (CBT) before conducting OQ Inspections? (Chapter 4.4.1) Previous Question A.12 Yes = 1 No = 0 SLR Notes: Yes. Required training was completed prior to leading OQ inspections. 1 1 11 Did the lead inspectors complete all required TQ Integrity Management (IMP) Courses/Seminars and CBT before conducting IMP Inspections? (Chapter 4.4.1) Previous Question A.13 Yes = 1 No = 0 1 1 SLR Notes: The two inspectors leading integrity management inspections have completed IMP training requirements prior to performing IMP inspections. 12 Was the ratio acceptable of Total inspection Person-days to Total Person-days charged to the program by state inspectors? (Region Director may modify points for just cause) (Chapter 4.3) Previous Question B.12 Yes = 5 No = 0 5 5 A. Total Inspection Person Days (Attachment 2): 981.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 8.76 = 1927.20 Ratio: A / B 981.00 / 1927.20 = 0.51 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 SLR Notes: 2011 Certification. Yes. The APSC exceeded the minimum ratio or 0.38. The ratio was 0.51 based upon the APSC's 981 inspection person days shown on Attachment 2 of its 13 Have there been modifications or proposed changes to inspector-staffing levels? (If yes, describe) Previous Question B.13 Info Only = No Points SLR Notes: DUNS: 961833431 2010 Natural Gas State Program Evaluation Info Only Info Only Alabama Alabama Public Service Commission, Page: 4

There are currently no plans to modify the inspector staffing levels in the APSC. 14 Part-A General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: The APSC has generally complied with Part A requirements. Total points scored for this section: 26 Total possible points for this section: 26 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 5

PART B - Inspections and Compliance - Procedures/Records/ Performance Points(MAX) Score Inspection Procedures 1 Does the State have a written inspection plan to complete the following? (all types of operators including LNG) 6.5 6.5 (Chapter 5.1) Previous Question B.1 + Chapter 5 Changes + Incorporate LNG Yes = 6.5 No = 0 Needs Improvement = 50% Deduction a Standard Inspections (Including LNG) (Max points = 2) b IMP Inspections (Including DIMP) (Max points = .5) c OQ Inspections (Max points = .5) d Damage Prevention (Max points = .5) e On-Site Operator Training (Max points = .5) f Construction Inspections (Max points = .5) g Incident/Accident Investigations (Max points = 1) h Compliance Follow-up (Max points = 1) Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement SLR Notes: The APSC procedures state that each operator and unit, including LNG facilities, will be inspected annually. OQ Protocol 9 and Damage Prevention are covered during each standard inspection. Follow up inspections are conducted after other inspections that result in non-compliance actions. Operators are required to notify the APSC on new construction projects. Construction inspections are scheduled based on notifications by operators. All reportable accidents are investigated by the APSC as they occur. On site operator training is conducted on an as need basis. The first round of Gas IMP Program inspections have been completed. 2 Did the written Procedures for selecting operators adequately address key concerns? (Chapter 5.1) Previous 2 2 Question B.2, items a-d are worth .5 point each Yes = 2 No = 0 Needs Improvement = 50% Deduction a Length of time since last inspection Yes No Needs Improvement b History of Operator/unit and/or location (including leakage , incident and compliance history) Yes No Needs Improvement c Type of activity being undertaken by operator (construction etc) Yes No Needs Improvement d For large operators, rotation of locations inspected Yes No Needs Improvement SLR Notes: The APSC procedures cover the items above. The APSC's inspection frequency states that each operator and unit will be inspected annually. The APSC has developed a risk ranking process that it implemented in 2011. Inspection Performance 3 Did the state inspect all types of operators and inspection units in accordance with time intervals established in its written procedures? (Chapter 5.1) Previous Question B.3 Yes = 2 No = 0 2 2 SLR Notes: The APSC procedures require that each operator and unit be inspected each calendar year. The APSC reported on its 2011 Certification - Attachment 1 that all operators and units were inspected during 2010. 4 Did the state inspection form cover all applicable code requirements addressed on the Federal Inspection forms? (Chapter 5.1 (3)) Previous Question B.4 Yes = 1 No = 0 1 1 SLR Notes: For standard inspections, the APSC utilizes an inspection form developed by the APSC. The APSC form was developed by revising the federal form to remove questions related to reviewing an operator's Operation and Maintenance Procedures. The APSC conducts a full standard inspection including a review of the Operation and Maintenance Procedures once each three years. When conducting the full standard inspection including O&M Procedures review, the federal form is used. The federal form is used for OQ, LNG, and Gas IMP inspections. 5 Did state complete all applicable portions of inspection forms? (Chapter 5.1 (3)) Previous Question B.5 Yes = 1 No = 0 SLR Notes: Upon a review of randomly selected inspection files, applicable portions of the forms were completed. 1 1 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 6

6 Did the state initiate appropriate follow-up actions to Safety Related Condition Reports? (Chapter 6.3) Previous Question B.6 Yes = .5 No = 0 SLR Notes: There were no safety related condition reports filed during 2010. .5 NA 7 Did the state review operator procedures for determining if exposed cast iron pipe was examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Previous Question B.7 Yes = .5 No = 0 .5 .5 SLR Notes: 8 Did the state review operator procedures for surveillance of cast iron pipelines, including appropriate action resulting from tracking circumferential cracking failures, study of leakage history, or other unusual operating maintenance condition? (Note: See GPTC Appendix G-18 for guidance) (NTSB) Previous Question B.8 Yes = .5 No = 0 .5 .5 SLR Notes: The APSC reviewed all operator's O&M Procedures for this requirement soon after the NTSB issued its recommendation. The APSC continues to review this requirement with Question 3 (e) on its standard inspection form as it inspects operators' O&M Procedures. 9 Did the state review operator emergency response procedures for leaks caused by excavation damage near buildings and determine whether the procedures adequately address the possibility of multiple leaks and underground migration of gas into nearby buildings Refer to 4/12/01 letter from PHMSA in response to NTSB recommendation P-00-20 and P-00-21? (NTSB) Previous Question B.9 Yes = .5 No = 0 SLR Notes: Yes. The APSC's standard inspection form questions 4 (b)(12) and (13) cover this safety recommendation. .5 .5 10 Did the state review operator records of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617? (NTSB) Previous Question B.10 Yes = 1 No = 0 SLR Notes: Yes. The APSC's standard inspection form Question 14 has the inspector review leak repair records and actions. 1 1 Compliance - 60105(a) States 11 Did the state adequately document sufficient information on probable violations? (Chapter 5.2) Previous 1 1 Question B.14 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Upon a review of randomly selected inspection files, each probable violation noted in the inspection form and non-compliance notification to operators had descriptions of the actions the operators failed to take to comply with the regulations. 12 Does the state have written procedures to identify the steps to be taken from the discovery to the resolution of a 1 1 probable violation as specified in the "Guidelines for State Participating in the Pipeline Safety Program"? (Chapter 5.1) Previous Question D(1).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Yes. The APSC's procedures require that the inspector conduct a followup inspection to confirm whether or not corrective action has been taken by the operator or to followup during the next scheduled inspection. 13 Does the state have written procedures to notify an operator when a noncompliance is identified as specified in the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(4)) Previous Question D (1).2 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The APSC's procedures state that a written notification will be sent to the operator notifying the operator of any non-compliance. 1 1 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 7

14 Does the state have a written procedure for routinely reviewing the progress of compliance actions to prevent delays or breakdowns of the enforcement process, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(5)) Previous Question D(1).3 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: operator. Yes. The APSC's procedures require that the inspector conduct a followup inspection to confirm whether or not corrective action has been taken by the 15 Has the State issued compliance actions for all probable violations discovered? (Note : PHMSA representative 1 1 has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation) Previous Question D(1).4 Yes = 1 No = 0 SLR Notes: Upon a review of randomly selected inspection files, all inspections with discovered probable violations had letters of non-compliance in the files. 16 Did the state follow its written procedures for reviewing compliance actions and follow-up to determine that 1 1 prompt corrective actions were taken by operators, within the time frames established by the procedures and compliance correspondence, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? Previous Question D(1).5 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Upon a review of randomly selected inspection files, the files contained responses from operators within the deadlines given by the APSC. The APSC had conducted followup inspections with operators to confirm if corrective action had taken place. 17 If compliance could not be established by other means, did state pipeline safety program staff request formal action, such as a "Show Cause Hearing" to correct pipeline safety violations? (check each states enforcement procedures) Previous Question D(1).6 No = 0 Yes = 1 SLR Notes: The APSC did not have a need to request a "show cause" hearing before the commission. 1 1 18 Did the state adequately document the resolution of probable violations? (Chapter 5.1 (6)) Previous Question 1 1 D(1).7 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Upon a review of randomly inspection files, inspectors initial each response item as acceptable and complete a form which documents acceptance of the operator's remedial action. The APSC maintains a record of active probable violations until closure of the inspection file. 19 Were compliance actions sent to a company officer? (manager or board member if municipal/government system) (Chapter 5.1(4)) Previous Question D(1).8 Yes = .5 No = 0 .5 .5 SLR Notes: Upon a review of randomly selected inspection reports, compliance letters were sent to a company officer of private firms and the appropriate individual in a municipal or government system. 20 Did the compliance proceedings give reasonable due process to all parties? (check each states enforcement procedures) Previous Question D(1).9 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: Yes. The APSC's rules and procedures provide operators with an opportunity to argue their position as to whether a probable violation occurred. The operator is provided with an opportunity to present its case in a "show cause" hearing before a presiding officer or the commission. Compliance - 60106(a) States 21 Did the state use the current federal inspection form(s)? Previous Question D(2).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: 1 1 APSC will use federal form once every three years. APSC is utilizing in 2011. The APSC used its form for 2010 which is a form created from the federal form by deleting questions related to procedures. The APSC's forms cover all federal regulatory requirements. 22 Are results adequately documented demonstrating inspection units were reviewed in accordance with state inspection plan? Previous Question D(2).2 DUNS: 961833431 2010 Natural Gas State Program Evaluation 1 NA Alabama Alabama Public Service Commission, Page: 8

Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: 23 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(2).3 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 24 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Previous Question D(2).4 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 25 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(2).5 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 26 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? Previous Question D(2).6 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 27 Is the program manager familiar with state process for imposing civil penalties? Were civil penalties considered for repeat violations (with severity consideration) or violations resulting in incidents/accidents? (describe any actions taken) Info Only = No Points Info Only NA SLR Notes: 28 Part B: General Comments/Regional Observations Info Only = No Points SLR Notes: The APSC has generally complied with Part B requirements. Info Only Info Only Total points scored for this section: 25.5 Total possible points for this section: 25.5 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 9

PART C - Interstate Agent States Points(MAX) Score 1 Did the state use the current federal inspection form(s)? Previous Question D(3).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 2 Are results documented demonstrating inspection units were reviewed in accordance with "PHMSA directed inspection plan"? Previous Question D(3).2 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 3 Did the state submit documentation of the inspections within 60 days as stated in its latest Interstate Agent Agreement form? Previous Question D(3).3 Yes = 1 No = 0 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 4 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(3).4 Yes = 1 No = 0 1 NA SLR Notes: The APSC does not have an interstate agent agreement. 5 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Previous Question D(3).5 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 6 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(3).6 Yes = 1 No = 0 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? Previous Question D(3).7 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The APSC does not have an interstate agent agreement. 1 NA 8 Part C: General Comments/Regional Observations Info Only = No Points SLR Notes: The APSC does not have an interstate agent agreement. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 10

PART D - Incident Investigations Points(MAX) Score 1 Are state personnel following the procedures for Federal/State cooperation in case of an incident? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6.1) Previous Question E.1 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: There three natural gas incidents during 2010. The APSC was aware of the procedures and was in communication with PHMSA's Southern Region Office. 2 Are state personnel familiar with the jurisdictional authority and Memorandum of Understanding between NTSB and PHMSA? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6 ? Appendix D) Previous Question E.2 Yes = .5 No = 0 .5 .5 SLR Notes: Yes. The APSC's program manager correctly stated the contents of the MOU between PHMSA and the NTSB. He was aware that the MOU is contained in the Appendices of the Guidelines. 3 Did the state keep adequate records of incident notifications received? Previous Question E.3 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: files. The APSC maintains a log of incident reports telephonically reported. Reports and documentation of each incident investigated is maintained in the APSC's 4 If an onsite investigation of an incident was not made, did the state obtain sufficient information by other means to determine the facts and support the decision not to go on-site? Previous Question E.4 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: One incident was not investigated on site. The incident on Riviera Utilities system in Gulf Shores, AL had occurred approximatley two months prior to discovery that it was a reportable incident. A decision to replace the damaged pipeline at a water crossing caused a revision in the repair damages which exceeded $50,000. The APSC gathered sufficient information after the fact to complete its investigation of the incident. 5 Were investigations thorough and conclusions and recommendations documented in an acceptable manner? Previous Question E.5, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Observations and Document Review 2 2 b. Contributing Factors c. Recommendations to prevent recurrences where appropriate Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement SLR Notes: above. The APSC collected facts in an acceptable manner. The APSC should consider organizing its written investigation reports into three sections as described 6 Did the state initiate enforcement action for violations found during any incident investigation(s)? Previous Question E.6 Variation Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: There were no probable violations by an operator discovered during the APSC's investigation. 1 NA 7 Did the state assist region office by taking appropriate follow-up actions related to the operator incident reports to ensure accuracy and final report has been received by PHMSA? (validate annual report data from operators concerning incidents/accidents and investigate discrepancies) (Chapter 6) Previous Question E.7/E.8 Yes = .5 No = 0 SLR Notes: Yes. PHMSA's Southern Region confirmed that the APSC has complied with this requirement. .5 0.5 8 Part D: General Comments/Regional Observations Info Only = No Points SLR Notes: DUNS: 961833431 2010 Natural Gas State Program Evaluation Info Only Info Only Alabama Alabama Public Service Commission, Page: 11

The APSC has generally complied with Part D requirements. Total points scored for this section: 6 Total possible points for this section: 6 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 12

PART E - Damage Prevention Initiatives Points(MAX) Score 1 Has the state reviewed directional drilling/boring procedures of each pipeline operator or its contractor to determine if they include actions to protect their facilities from the dangers posed by drilling and other trench less technologies? Previous Question B.11 Yes = 2 No = 0 Needs Improvement = 1 2 2 SLR Notes: review. Yes. The APSC conducts reviews of operators' OM procedures on a three year rotational basis. Directional drilling/boring procedures are a part of the 2 Did the state inspector check to assure the pipeline operator is following its written procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? New 2008 Yes = 2 No = 0 2 2 SLR Notes: Yes. The APSC's standard inspection form Question 25 has the inspector review the operator's damage prevention program and records. 3 Did the state encourage and promote the adoption of the Common Ground Alliance Best Practices document to 2 2 its regulated companies as a means of reducing damages to all underground facilities? Previous Question A.7 Yes = 2 No = 0 Needs Improvement = 1 SLR Notes: Wallace Jones participates in the Alabama Damage Prevention Council where he has encouraged stakeholder representatives to use CGA Best Practices. The APSC includes damage prevention topics during its annual pipeline safety seminar. 4 Has the agency or another organization within the state collected data and evaluated trends on the number of pipeline damages per 1,000 locate requests? New 2008 Yes = 1 No = 0 SLR Notes: The APSC collects this information each year and uses the information in its relative risk ranking model. 1 1 5 Did the state review operators' records of accidents and failures due to excavation damage to ensure causes of failure are addressed to minimize the possibility of recurrence as required by 192.617? Yes = 2 No = 0 2 2 SLR Notes: Yes. The APSC reviews operators' compliance with damage prevention requirements under 192.614 and operators' failure investigation records pertaining to 192.617 as part of its standard inspection. Excavation damage related failures and repairs are part of this information. 6 Part E: General Comments/Regional Observations Info Only = No Points SLR Notes: The APSC has generally complied with Part E requirements. Info Only Info Only Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 13

PART F - Field Inspection Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only = No Points Info Only Info Only Name of Operator Inspected: Southeast Alabama Gas District Name of State Inspector(s) Observed: Tommy Lancaster Location of Inspection: Southeast Alabama Gas District Operations Center in Andalusia, AL. Date of Inspection: 10/27/2011 Name of PHMSA Representative: Don Martin SLR Notes: The APSC conducted a standard inspection that included a review of operation and maintenance procedures. The APSC inspector used the federal Standard Inspection Report of A Gas Distribution Operator, revision date of 5/6/2011. The APSC inspector began and concluded the inspection on the day of the evaluation visit. 2 Was the operator or operator's representative notified and/or given the opportunity to be present during inspection? New 2008 Yes = 1 No = 0 SLR Notes: Yes. The APSC inspector notified the operator of the inspection more than two weeks prior to the inspection. 1 1 3 Did the inspector use an acceptable inspection form/checklist and was the form/checklist used as a guide for the inspection? (New regulations shall be incorporated) Previous Question F.2 Yes = 2 No = 0 2 2 SLR Notes: The APSC inspector used the federal inspection - Standard Inspection Report of a Gas Operator revised 5/6/2011. The inspectors progressed through the inspection by stepping through the inspection form. 4 Did the inspector thoroughly document results of the inspection? Previous Question F.3 Yes = 2 No = 0 2 2 SLR Notes: The APSC inspector checked the appropriate blocks of all requirements covered during the inspection. Notes are included on the form to describe any probable violations, anything not applicable or not covered. 5 Did the inspector check to see if the operator had necessary equipment during inspection to conduct tasks viewed? (Maps, pyrometer, soap spray, CGI, etc.) New 2008 Yes = 1 No = 0 SLR Notes: The field portion of the inspection was scheduled for a later date after the inspection evaluation. 1 NA 6 What type of inspection(s) did the state inspector conduct during the field portion of the state evaluation? (i.e. Standard, Construction, IMP, etc) New 2008 Info Only = No Points SLR Notes: Standard inspection was observed. Procedures were reviewed. The field portion was scheduled for a later date. Info Only Info Only 7 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) New 2008, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Procedures b. Records c. Field Activities/Facilities 2 2 DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 14

d. Other (Please Comment) SLR Notes: The inspector covered procedures requirements in detail using the federal Standard Inspection Report for Gas Distribution Operators. The records portion began but was not completed at the time of the evaluation observation. 8 Did the inspector have adequate knowledge of the pipeline safety program and regulations? (Liaison will document reasons if unacceptable) Previous Question F.8 Yes = 2 No = 0 2 2 SLR Notes: Yes. Mr. Lancaster has 23 years of experience conducting pipelins safety inspections and has completed all of the Training and Qualifications courses. 9 Did the inspector conduct an exit interview? (If inspection is not totally complete the interview should be based on areas covered during time of field evaluation) Previous Question F.10 Yes = 1 No = 0 SLR Notes: The inspector did conduct an exit interview for the portion of the inspection covered on 10/27/2011. 1 1 10 During the exit interview, did the inspector identify probable violations found during the inspections? Previous 1 1 Question F.11 Yes = 1 No = 0 SLR Notes: The inspector stated that he did not find any probable violations during the inspection conducted on 10/27/2011. He explained that his inspection would not be completed prior to November 4th. 11 What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) Info Only = No Points SLR Notes: The field portion of the inspection was scheduled for the following week after the evaluation observation. Info Only Info Only 12 Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) Info Only Info Only = No Points SLR Notes: None identified. Info Only 13 Field Observation Areas Observed (check all that apply) Info Only = No Points a. Abandonment b. Abnormal Operations c. Break-Out Tanks d. Compressor or Pump Stations e. Change in Class Location f. Casings g. Cathodic Protection h. Cast-iron Replacement i. Damage Prevention j. Deactivation k. Emergency Procedures l. Inspection of Right-of-Way m. Line Markers n. Liaison with Public Officials o. Leak Surveys p. MOP q. MAOP Info Only Info Only DUNS: 961833431 2010 Natural Gas State Program Evaluation Alabama Alabama Public Service Commission, Page: 15

r. Moving Pipe s. New Construction t. Navigable Waterway Crossings u. Odorization v. Overpressure Safety Devices w. Plastic Pipe Installation x. Public Education y. Purging z. Prevention of Accidental Ignition A. Repairs B. Signs C. Tapping D. Valve Maintenance E. Vault Maintenance F. Welding G. OQ - Operator Qualification H. Compliance Follow-up I. Atmospheric Corrosion J. Other SLR Notes: The field portion was scheduled for the week following evaluation observation site visit. 14 Part F: General Comments/Regional Observations Info Only = No Points SLR Notes: The APSC generally complied with the requirements of Part F of this evaluation. DUNS: 961833431 2010 Natural Gas State Program Evaluation Info Only Info Only Total points scored for this section: 11 Total possible points for this section: 11 Alabama Alabama Public Service Commission, Page: 16

PART G - PHMSA Initiatives - Strategic Plan Points(MAX) Score Risk base Inspections - Targeting High Risk Areas 1 Does state have process to identify high risk inspection units? Yes = 1.5 No = 0 1.5 1.5 Risk Factors (criteria) to consider may include: Miles of HCA's, Geographic area, Population Density Length of time since last inspection History of Individual Operator units (leakage, incident and compliance history, etc.) Threats - (Excavation Damage, Corrosion, Natural Forces, Other Outside Forces, Material or Welds, Equipment, Operations, Other) SLR Notes: Yes. The APSC developed a relative risk ranking model during 2009. The APSC populated the data into the model during 2010. The model has been used to schedule inspections during 2011. The model produces information that can rank inspection unit risks relative to all units. 2 Are inspection units broken down appropriately? (see definitions in Guidelines) Yes = .5 No = 0 SLR Notes: Based upon the definition of inspection units in the Guidelines, it appears that the APSC's inspection units are appropriate. .5 0.5 3 Consideration of operators DIMP Plan? (if available and pending rulemaking) Info Only = No Points SLR Notes: The APSC will not have information from operators' DIMP plans until after August, 2011. Info Only Info Only 4 Does state inspection process target high risk areas? Yes = .5 No = 0 SLR Notes: The APSC has designed the model to provide trends on certain threats such as third party damage for each operator and unit. .5 0.5 Use of Data to Help Drive Program Priority and Inspections 5 Does state use data to analyze effectiveness of damage prevention efforts in the state? (DIRT or other data, etc) .5 0.5 Yes = .5 No = 0 SLR Notes: The is collecting data to conduct an analysis of damages in the state of Alabama. The APSC is a participant in the Alabama Damage Prevention Alliance 
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