# 2019 AZ NG Program Evaluation - AZ 2019 Gas Program Evaluation (Arizona; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA AZ 2019 Gas Program Evaluation
- **title:** 2019 AZ NG Program Evaluation - AZ 2019 Gas Program Evaluation (Arizona; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2019-01-01
- **effective on:** Not available
- **summary:** 2019 PHMSA natural gas program evaluation for Arizona.
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- **app url:** https://regulus.evalyn.ai/document/phmsa-state-evaluation-az-ng-program-evaluation-az-2019-gas-program-evaluation
- **source url:** https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2021-04/AZ%202019%20Gas%20Program%20Evaluation.pdf
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1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2019 Gas State Program Evaluation for ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety Document Legend PART: O -- Representative, Dates and Title Information A -- Progress Report and Program Documentation Review B -- Program Inspection Procedures C -- State Qualifications D -- Program Performance E -- Field Inspections F -- Damage prevention and Annual report analysis G -- Interstate Agent/Agreement States DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 1

2019 Gas State Program Evaluation -- CY 2019 Gas State Agency: Arizona Rating: Agency Status: Date of Visit: 10/19/2020 - 10/30/2020 Agency Representative: Eric Villa Program Manager Pipeline Safety Section Arizona Corporation Commission PHMSA Representative: David Appelbaum PHMSA State Evaluator Commission Chairman to whom follow up letter is to be sent: Name/Title: Bob Burns, Chairman Agency: Arizona Corporation Commission Address: 1200 West Washington Street - Second Floor City/State/Zip: Phoenix, Arizona 85007 60105(a): Yes 60106(a): No Interstate Agent: Yes INSTRUCTIONS: Complete this evaluation in accordance with the Evaluator Guidance for conducting state pipeline safety program evaluations. The evaluation should generally reflect state program performance during CY 2019 (not the status of performance at the time of the evaluation). 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 than the maximum points, include a brief explanation in the appropriate notes/comments section. If a question is not applicable to a state, select NA. Please ensure all responses are COMPLETE and ACCURATE, and they OBJECTIVELY reflect the state's program performance for the question being evaluated. Increasing emphasis is being placed on how the state pipeline safety programs conduct and execute their pipeline safety responsibilities (their performance). This evaluation, together with selected factors reported in the state's annual progress report attachments, provide the basis for determining the state's pipeline safety grant allocation. Scoring Summary PARTS Possible Points Points Scored A Progress Report and Program Documentation Review 0 0 B Program Inspection Procedures 15 12 C State Qualifications 10 10 D Program Performance 50 50 E Field Inspections 15 15 F Damage prevention and Annual report analysis 4 4 G Interstate Agent/Agreement States 0 0 TOTALS 94 91 State Rating................................................................................................................................................... 96.8 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 2

PART A - Progress Report and Program Documentation Review Points(MAX) Score 1 Were the following Progress Report Items accurate? Info Only = No Points a. Stats On Operators Data - Progress Report Attachment 1 b. State Inspection Activity Data - Progress Report Attachment 2 c. List of Operators Data - Progress Report Attachment 3* d. Incidents/Accidents Data - Progress Report Attachment 4* e. Stats of Compliance Actions Data - Progress Report Attachment 5* f. List of Records Kept Data - Progress Report Attachment 6 * g. Staff and TQ Training Data - Progress Report Attachment 7 h. Compliance with Federal Regulations Data - Progress Report Attachment 8 i. Performance and Damage Prevention Question Data - Progress Report Attachment 10* Info Only Info Only Evaluator Notes: Program had a few discrepancies in attachment 1. Specifically: LNG: Attachment #1 = 2 operators PDM = 3 operators INTRAstate Transmission: Attachment #1 = 10 operators PDM = 12 operators Additionally, attachment #3 reflected 944 Master Meters, but on December 31, 2019 they had 850 Master Meters. Program Manager vetted PR with PHMSA prior to submission and was given some counsel which conflicted with State Guidelines 2.7.1. and 2.7.3. PM will make a supplemental submission to correct the PR. Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 3

PART B - Program Inspection Procedures Points(MAX) Score 1 Do written procedures address pre-inspection, inspection and post inspection activities 5 3 for each of the following inspection types: Chapter 5.1 Yes = 5 No = 0 Needs Improvement = 1-4 a. Standard Inspections, which include Drug/Alcohol, CRM and Public Awareness Effectiveness Inspections b. TIMP and DIMP Inspections (reviewing largest operator(s) plans annually) c. OQ Inspections d. Damage Prevention Inspections e. On-Site Operator Training f. Construction Inspections (annual efforts) g. LNG Inspections Evaluator Notes: In an effort to improve the ACC's procedures, the PM abandoned last year's procedures manual and developed a number of flowcharts to address the requisite elements in PHMSA's State Guidelines. These flowcharts are supported by a written "policy." The combination of these documents provides a good supplement for inspectors but lacks sufficient detail to ensure the efficient, effective and consistent completion of state conducted inspection activities. Procedures are silent (missing) for Damage Prevention Inspections, as well as On-Site Operator Training. Additionally, procedures don't appear to address the requirement of continuous monitoring for IMP and DIMP inspections. 2 Do written procedures address inspection priorities of each operator, and if necessary 4 4 each unit, based on the following elements and time frames established in its procedures? Chapter 5.1 Yes = 4 No = 0 Needs Improvement = 1-3 a. Length of time since last inspection b. Operating history of operator/unit and/or location (includes leakage, incident and compliance activities) c. Type of activity being undertaken by operators (i.e. construction) d. Locations of operator's inspection units being inspected - (HCA's, Geographic area, Population Centers, etc.) e. Process to identify high-risk inspection units that includes all threats - (Excavation Damage, Corrosion, Natural Forces, Outside Forces, Material and Welds, Equipment, Operators and any Other Factors) f. Are inspection units broken down appropriately? Evaluator Notes: In an effort to improve the ACC's procedures, the PM developed a number of flowcharts to address the requisite elements in PHMSA's State Guidelines. These flowcharts are supported by a written "policy." The combination of these documents provides a good supplement for inspectors but lacks sufficient detail to ensure the efficient, effective and consistent completion of state conducted inspection activities. Procedures (by way of their "policies") identifies inspection intervals, notwithstanding the missing Damage Prevention inspections, as well as On-Site Operator Training. The ACC is transitioning to an annual inspection format. Presently, there appears to be no risk-based written procedures that help the ACC determine inspection priorities. PHMSA will not deduct any points this year on this question, but the ACC will need to demonstrate the inspection interval it utilizes eliminates the need for a risk based approach and all inspection units are inspected annually. (State Guidelines 5.1.2) 3 (Compliance Procedures) Does the state have written procedures to identify steps to be taken from the discovery to resolution of a probable violation? Chapter 5.1 Yes = 3 No = 0 Needs Improvement = 1-2 a. Procedures to notify an operator (company officer) when a noncompliance is identified b. Procedures to routinely review progress of compliance actions to prevent delays or breakdowns c. Procedures regarding closing outstanding probable violations 3 2 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 4

Evaluator Notes: Procedures for this requirement are contained in a flowchart. Flowchart refers to a "Designee" in multiple steps but doesn't define who is a "Designee." Again, procedures are weak on this topic, and as a result, a number of inspections reviewed were deficient regarding follow- up activities to ensure that proper corrective action has been taken by the operator within a specific time frame after notification of noncompliance. One point deduction PHMSA recommends the ACC rewrite procedures to provide sufficient details to ensure proper and timely follow-up activity has been completed. 4 (Incident/Accident Investigations) Does the state have written procedures to address state 3 3 actions in the event of an incident/accident? Yes = 3 No = 0 Needs Improvement = 1-2 a. Mechanism to receive, record, and respond to operator reports of incidents, including after-hours reports b. If onsite investigation was not made, do procedures require on-call staff to obtain sufficient information to determine the facts to support the decision not to go on-site. Evaluator Notes: Procedures (flowchart) indicates that an on-site investigation "may" be warranted based on factors such as incident/accident location, magnitude and consequence." It further states that "if it determined that no Significant Consequences or Magnitude exists, then no investigation is needed." Procedure (flowchart) does not define what a "Significant Consequence" is. There is a policy that dictates when a supervisor is called following the report of an incident. It then becomes the burden of the supervisor to determine if the Incident is "Significant" enough to warrant an on-site investigation. No point deduction, but the ACC will need to clarify (better describe) in the procedures when Incident/Accident Investigations must be conducted on-site. 5 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: In an effort to improve the ACC's procedures, the PM developed a number of flowcharts to address the requisite elements in PHMSA's State Guidelines. These flowcharts are supported by a written "policy." The combination of these documents provides a good supplement for inspectors but lacks sufficient detail to ensure the efficient, effective and consistent completion of state conducted inspection activities. Total points scored for this section: 12 Total possible points for this section: 15 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 5

PART C - State Qualifications Points(MAX) Score 1 Has each inspector and program manager fulfilled training requirements? (See Guidelines Appendix C for requirements) Chapter 4.4 Yes = 5 No = 0 Needs Improvement = 1-4 a. Completion of Required OQ Training before conducting inspection as lead b. Completion of Required DIMP/IMP Training before conducting inspection as lead c. Completion of Required LNG Training before conducting inspection as lead d. Root Cause Training by at least one inspector/program manager e. Note any outside training completed f. Verify inspector has obtained minimum qualifications to lead any applicable standard inspection as the lead inspector (Reference State Guidelines Section 4.3.1) Evaluator Notes: All lead inspectors in 2019 have met the TQ requirements. 5 5 2 Did state records and discussions with state pipeline safety program manager indicate adequate knowledge of PHMSA program and regulations? Chapter 4.1,8.1 Yes = 5 No = 0 Needs Improvement = 1-4 5 5 Evaluator Notes: The Program Manager, Eric Villa, has been with the ACC for 20 years, but only in the PM role since July 2019. Eric is clearly proficient with the Pipeline Safety regulations, and has a general understanding how to execute the administrative functions of the Program. 3 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 10 Total possible points for this section: 10 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 6

PART D - Program Performance Points(MAX) Score 1 Did state inspect all types of operators and inspection units in accordance with time 5 5 intervals established in written procedures? Chapter 5.1 Yes = 5 No = 0 Needs Improvement = 1-4 a. Standard (General Code Compliance) b. Public Awareness Effectiveness Reviews c. Drug and Alcohol d. Control Room Management e. Part 193 LNG Inspections f. Construction (did state achieve 20% of total inspection person-days?) g. OQ (see Question 3 for additional requirements) h. IMP/DIMP (see Question 4 for additional requirements) Evaluator Notes: Yes. The ACC was on a three year schedule to complete all inspection types, but is transitioning to an annual inspection schedule. After a thorough review, which was complicated by the absence of a spreadsheet, there was no evidence of the ACC not meeting this schedule. PHMSA recommends the ACC develop a spreadsheet or database to more easily ensure inspections are conducted within specified time intervals. 2 Did inspection form(s) cover all applicable code requirements addressed on Federal Inspection form(s)? Did State complete all applicable portions of inspection forms? Chapter 5.1. Do inspection records indicate that adequate reviews of procedures, records and field activities, including notes and the appropriate level of inspection person-days for each inspection, were performed? Yes = 10 No = 0 Needs Improvement = 1-9 a. Standard (General Code Compliance) b. Public Awareness Effectiveness Reviews c. Drug and Alcohol d. Control Room Management e. Part 193 LNG Inspections f. Construction g. OQ (see Question 3 for additional requirements) h. IMP/DIMP (see Question 4 for additional requirements) 10 10 Evaluator Notes: The ACC uses the federal inspection forms for its inspections. Upon a review of randomly selected 2019 inspection files all applicable portions of the forms were completed appropriately. 3 Is state verifying operators OQ programs are up to date? This should include verification of any plan updates and that persons performing covered tasks (including contractors) are properly qualified and requalified at intervals established in the operator's plan. 49 CFR 192 Part N Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: 2 2 Yes, this is verified during all annual inspections, incident/accident inspection and verified while in the field. 4 Is state verifying operator's integrity management Programs (IMP and DIMP)? This should include a review of plans, along with monitoring progress. In addition, the review should take in to account program review and updates of operator's plan(s). 49 CFR 192 Subpart P Yes = 2 No = 0 Needs Improvement = 1 a. Are the state's largest operator(s) plans being reviewed annually? b. Are states verifying with operators any plastic pipe and components that have shown a record of defects/leaks and mitigating those through DIMP plan? 2 2 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 7

c. Are the states verifying operators are including low pressure distribution systems in their threat analysis? Evaluator Notes: Yes, this is verified during all annual inspections. 5 Did the state review the following (these items are NTSB recommendations to PHMSA that have been deemed acceptable response based on PHMSA reviewing these items during the evaluation process): Chapter 5.1 Yes = 2 No = 0 Needs Improvement = 1 a. Operator procedures for determining if exposed cast iron pipe was examined for evidence of graphitization and if necessary remedial action was taken; b. 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); c. 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; d. 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; e. 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; f. Operator procedures for considering low pressure distribution systems in threat analysis? g. Operator compliance with state and federal regulations for regulators located inside buildings? Evaluator Notes: Yes, this is verified during all annual inspections. 2 2 6 Did the State verify Operators took appropriate action regarding advisory bulletins issued since the last evaluation? (Advisory Bulletins Current Year) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, this is verified during all annual inspections. 1 1 7 (Compliance Activities) Did the state follow compliance procedures (from discovery to resolution) and adequately document all probable violations, including what resolution or further course of action is needed to gain compliance? Chapter 5.1 Yes = 10 No = 0 Needs Improvement = 1-9 a. Were compliance actions sent to company officer or manager/board member if municipal/government system? b. Were probable violations documented properly? c. Resolve probable violations d. Routinely review progress of probable violations e. Did state issue compliance actions for all probable violations discovered? f. Can state demonstrate fining authority for pipeline safety violations? g. Does Program Manager review, approve and monitor all compliance actions? (note: Program Manager or Senior Official should sign any NOPV or related enforcement action) h. Did state compliance actions give reasonable due process to all parties? Including "show cause" hearing, if necessary. i. Within 30 days, conduct a post-inspection briefing with the owner or operator outlining any concerns 10 10 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 8

j. Within 90 days, to the extent practicable, provide the owner or operator with written preliminary findings of the inspection. (Incident investigations do not need to meet 30/90-day requirement) Evaluator Notes: All requisite elements of this question appear to have been satisfied. PHMSA again recommends the ACC assess the deployment of its fining authority to enhance pipeline safety. See question B-3 for improvement opportunities regarding follow-up activities. 8 (Incident Investigations) Were all incidents investigated, thoroughly documented, with conclusions and recommendations? Yes = 10 No = 0 Needs Improvement = 1-9 a. Does state have adequate mechanism to receive and respond to operator reports of incidents, including after-hours reports? b. Did state keep adequate records of Incident/Accident notifications received? c. If onsite investigation was not made, did the state obtain sufficient information from the operator and/or by means to determine the facts to support the decision not to go on site? d. Were onsite observations documented? e. Were contributing factors documented? f. Were recommendations to prevent recurrences, where appropriate, documented? g. Did state initiate compliance action for any violations found during any incident/accident investigation? h. Did state assist Region Office or Accident Investigation Division (AID) by taking appropriate follow-up actions related to the operator incident reports to ensure accuracy and final report has been received by PHMSA? i. Does state share any lessons learned from incidents/accidents? 10 10 Evaluator Notes: The State only had three incidents listed on Attachment #4. All appear to have been investigated and dispositioned properly. 9 Did state respond to Chairman's letter on previous evaluation within 60 days and correct 1 1 or address any noted deficiencies? (If necessary) Chapter 8.1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: PHMSA sent the ACC's Program letter on June 2, 2019 and received their response on August 2, 2019, within the 60 day requirement. 10 Did State conduct or participate in pipeline safety training session or seminar in Past 3 Years? Chapter 8.5 Info Only = No Points Evaluator Notes: Last seminar was held in June 11 and 12, 2018 Info Only Info Only 11 Has state confirmed transmission operators have submitted information into NPMS database along with changes made after original submission? Info Only = No Points Evaluator Notes: No apparent issues regarding this question. AR's and NPMS seem to align. Info Only Info Only 12 Does the state have a mechanism for communicating with stakeholders - other than state 1 1 pipeline safety seminar? (This should include making enforcement cases available to public). Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, Arizona maintains a public website and maintains a working relationship and meets with the Arizona Utility Group. Arizona is a member of; the AZ National Utility Contractors Association, One call ticket resolution committee, Arizona Emergency Response Committee Advisory Board, the Arizona and National Common Ground Alliance. Arizona participatesDUNS: 141953807 Arizona 2019 Gas State Program Evaluation ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 9

as a sponsoring member of the AZ 811 Alliance. Arizona meets quarterly with their largest LDC, Southwest Gas Corporation to discuss possible safety issues, ongoing maintenance, operational issues and vintage pipe replacement projects or other issues relevant to the safe operation of pipelines in Arizona. 13 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) Reports? Chapter 6.3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No apparent deficiencies with this question. 1 1 14 Was the State responsive to: Yes = 1 No = 0 Needs Improvement = .5 a. Surveys or information requests from NAPSR or PHMSA; b. Operator IM notifications; and c. PHMSA Work Management system tasks? Evaluator Notes: No apparent deficiencies on these questions 1 1 15 If the State has issued any waivers/special permits for any operator, has the state verified conditions of those waivers/special permits are being met? This should include having the operator amend procedures where appropriate. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: 1 1 The ACC appears to be compliant with this question. PHMSA recommends the ACC enhance written procedures to ensure an appropriate review of waivers are conducted annually. 16 Were pipeline program files well-organized and accessible? Info Only = No Points Evaluator Notes: Electronic files appear to be sufficiently organized. Inspection was performed virtually. Info Only Info Only 17 Discussion with State on accuracy of inspection day information submitted into State Inspection Day Calculation Tool (SICT). Has the state updated SICT data? Yes = 3 No = 0 Needs Improvement = 1-2 3 3 Evaluator Notes: Topic was discussed with Program Manager and State appears to be providing appropriate input and using the Tool properly. 18 Discussion on State Program Performance Metrics found on Stakeholder Communication Info Only Info Only site.\ http://primis.phmsa.dot.gov/comm/states.htm?nocache=4805 Info Only = No Points Evaluator Notes: All of the metrics are trending in the direction of improvement. It was clear from the discussion with the Program Manager and staff that the drivers of the trends are understood. 19 Did the state encourage and promote operator implementation of Pipeline Safety Management Systems (PSMS), or API RP 1173? This holistic approach to improving pipeline safety includes the identification, prevention and remediation of safety hazards. Info Only = No Points a. https://pipelinesms.org/ b. Reference AGA recommendation to members May 20, 2019 Info Only Info Only Evaluator Notes: DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 10

The ACC has not deployed any processes to satisfy this question. PHMSA advised the ACC to develop and distribute a communication in CY 2020 to avoid a point deduction next year. 20 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 50 Total possible points for this section: 50 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 11

PART E - Field Inspections Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative (enter specifics into the Info Only Info Only comments box below) Info Only = No Points a. What type of inspection(s) did the state inspector conduct during the field portion of the state evaluation? (i.e. Standard, Construction, IMP, etc) b. When was the unit inspected last? c. Was pipeline operator or representative present during inspection? d. Effort should be made to observe newest state inspector with least experience Evaluator Notes: SW Gas and their 2nd party contractor Underground Construction performed a replacement of a six inch pipe. Tasks included: procedure review, OQ's, welding and wrapping. 2 Did the inspector use an appropriate inspection form/checklist and was the form/checklist used as a guide for the inspection? (New regulations shall be incorporated) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Inspector used the Intrastate Construction form created by the ACC. 2 2 3 Did the inspector adequately review the following during the inspection 10 10 Yes = 10 No = 0 Needs Improvement = 1-9 a. Procedures (were the inspector's questions of the operator adequate to determine compliance?) b. Records (did the inspector adequately review trends and ask in-depth questions?) c. Field Activities/Facilities (did inspector ensure that procedures were being followed, including ensuring that properly calibrated equipment was used and OQ's were acceptable?) d. Other (please comment) e. Was the inspection of adequate length to properly perform the inspection? Evaluator Notes: Inspectors reviewed procedures and records for the pipeline system. They concluded with a field inspection of the facilities. 4 From your observation did the inspector have adequate knowledge of the pipeline safety program and regulations? (Evaluator will document reasons if unacceptable) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: Inspector Hurtado demonstrated proficiency with the audit. He maintained good control and command presence with the operator being inspected. 5 Did the inspector conduct an exit interview, including identifying probable violations? (If inspection is not totally completed the interview should be based on areas covered during time of field evaluation) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, Inspector did a good job describing observations and recommendations. 1 1 6 Was inspection performed in a safe, positive, and constructive manner ? Info Only = No Points a. No unsafe acts should be performed during inspection by the state inspector b. What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) c. Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) Info Only Info Only DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 12

d. Other Evaluator Notes: Inspection was done virtually, but appeared to be done safely. 7 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 15 Total possible points for this section: 15 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 13

PART F - Damage prevention and Annual report analysis Points(MAX) Score 1 Has the state reviewed Operator Annual reports, along with Incident/Accident reports, for accuracy and analyzed data for trends and operator issues. Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: The ACC uses mandatory quarterly reports for leaks and accidents/damages from operators to track this information. It gives a good real time account of the information. They also review the annual reports to track new installation of pipe and services. 2 Has the state verified that the operators analyze excavation damages for the purpose of determining root causes and minimizing the possibility of a recurrence? (? 192.617) Has the state verified that the operators have appropriately identified excavators who have repeatedly violated one-call laws and damaged their facilities. Have the operators taken steps to mitigate that risks? (? 192.1007) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The ACC has a robust DP program which meet the requisite elements of this question. 2 NA 3 Has the state reviewed the operator's annual report pertaining to Part D ? Excavation Damage? Yes = 4 No = 0 Needs Improvement = 1-3 a. Is the information complete and accurate with root cause numbers? b. Has the state evaluated the causes for the damages listed under "One-Call Notification Practices Not Sufficient" (Part D.1.a.)? c. Has the state evaluated the causes for the damages listed under "Locating Practices Not Sufficient" (Part D.1.b)? For each operator, does the state review the following? d. Is the operator or its locating contractor(s) qualified and following written procedures for locating and marking facilities? e. Is the operator appropriately requalifying locators to address performance deficiencies? f. What is the number of damages resulting from mismarks? g. What is the number of damages resulting from not locating within time requirements (no-shows)? h. Is the operator appropriately addressing discovered mapping errors resulting in excavation damages? i. Are mapping corrections timely and according to written procedures? j. Has the state evaluated the causes for the damages listed under "Excavation Practices Not Sufficient" (Part D.1.c.)? Evaluator Notes: The AC has a robust DP program which meets the requisite elements of this question. 4 NA 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? Yes = 2 No = 0 Needs Improvement = 1 a. What stakeholder group is causing the highest number of damages to the pipelines? Operator, contractor, locating company or public. b. Has the state verified the operator is appropriately focusing damage prevention education and training to stakeholders causing the most damages? c. Has the state evaluated which of the following best describes the reason for the excavation damages; i.e., operator or contractor not following written procedures, failure to maintain marks, failure to support exposed facilities, failure to use hand tools were required, failure to test-hole (pot hole), improper backfilling practices, failure to maintain clearance or insufficient excavation practices. d. Has the state verified the operator is appropriately focusing damage prevention education and training to address the causes of excavation damages? 2 2 Evaluator Notes: DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 14

The ACC collects quarterly damage reports on damages from all operators (except master meter) the information provided includes the number of tickets, number of damages and the cause of damages. This information is compiled by an assigned inspector and reviewed by the Program Manager. 5 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 4 Total possible points for this section: 4 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 15

PART G - Interstate Agent/Agreement States Points(MAX) Score 1 Were all inspections of interstate pipelines conducted using the Inspection Assistant program for documenting inspections. Info Only = No Points Evaluator Notes: Inspection were performed with II in concert with PHMSA Info Only Info Only 2 If inspections were conducted independent of a PHMSA team inspection was notice of all Info Only Info Only identified probable violations provided to PHMSA within 60 days. Info Only = No Points Evaluator Notes: No inspections were conducted independent of PHMSA. 3 If inspections were conducted independent of a PHMSA team inspection was PHMSA immediately notified of conditions which may pose an immediate safety hazard to the public or environment? Info Only = No Points Evaluator Notes: No inspections were conducted independent of PHMSA. Info Only Info Only 4 If inspections were conducted independent of a PHMSA team inspection did the state coordinate with PHMSA if inspections not were not included in the PHMSA Inspection Work Plan? Info Only = No Points Evaluator Notes: No inspections were conducted independent of PHMSA. Info Only Info Only 5 Did the state take direction from and cooperate with PHMSA for all incident investigations conducted on interstate pipelines? Info Only = No Points Evaluator Notes: There were no apparent deficiencies with this question. Info Only Info Only 6 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 141953807 2019 Gas State Program Evaluation Arizona ARIZONA CORPORATION COMMISSION, Office of Pipeline Safety, Page: 16
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