# 2013 CO NG Program Evaluation - co2013ngprogramevaluation (Colorado; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA co2013ngprogramevaluation
- **title:** 2013 CO NG Program Evaluation - co2013ngprogramevaluation (Colorado; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2013-01-01
- **effective on:** Not available
- **summary:** 2013 PHMSA natural gas program evaluation for Colorado.
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- **source url:** https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/subdoc/391/co2013ngprogramevaluation.pdf
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1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2013 Natural Gas State Program Evaluation for COLORADO PUBLIC UTILITIES COMMISSION Document Legend PART: O -- Representative Date and Title Information A -- Progress Report and Program Documentation Review B -- Program Inspection Procedures C -- Program Performance D -- Compliance Activities E -- Incident Investigations F -- Damage Prevention G -- Field Inspections H -- Interstate Agent State (If Applicable) I -- 60106 Agreement State (If Applicable) DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 1

2013 Natural Gas State Program Evaluation -- CY 2013 Natural Gas State Agency: Colorado Rating: Agency Status: Date of Visit: 05/12/2014 - 05/16/2014 Agency Representative: Steve Pott, Chief Pipeline Safety Joe Molloy, Inspector Bran Fry, Inspector Fred Johnson, Inspector III PHMSA Representative: Glynn Blanton, DOT/PHMSA State Programs Commission Chairman to whom follow up letter is to be sent: Name/Title: Joshua B. Epel, Chairman Agency: Colorado Public Utilities Commission Address: 1560 Broadway Suite 250 City/State/Zip: Denver, Colorado 80202 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 2013 (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 progress report attachments provide the basis for determining the state's pipeline safety grant allocation. Field Inspection (PART G): 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 G, the PHMSA representative should include a written summary which thoroughly documents the inspection. Scoring Summary PARTS Possible Points Points Scored A Progress Report and Program Documentation Review 10 10 B Program Inspection Procedures 15 13 C Program Performance 45 44 D Compliance Activities 15 15 E Incident Investigations 9 9 F Damage Prevention 8 8 G Field Inspections 12 12 H Interstate Agent State (If Applicable) 0 0 I 60106 Agreement State (If Applicable) 0 0 TOTALS 114 111 State Rating................................................................................................................................................... 97.4 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 2

PART A - Progress Report and Program Documentation Review Points(MAX) Score 1 Accuracy of Jurisdictional Authority and Operator/Inspection Units Data - Progress Report Attachment 1 (A1a) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Attachment 1 found all information was correct. No areas of concern. 1 1 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 (A1b) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: A review of Attachment 2 indicated Drug & Alcohol inspections are now being recorded when the inspector is performing a standard or drug inspection. In the past, this information was not being recorded nor credited to the program's activities. Other information listed was reviewed and found correct in accordance with office records. No issues of concern. 3 Accuracy verification of Operators and Operators Inspection Units in State - Progress 1 1 Report Attachment 3 (A1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Attachment 3 found the number of operators and inspection units match correctly with CO PUC office records. However, it was noted that Black Hills Electric Utility who operates an intrastate transmission line did not list their ID number 32564 beside their name on attachment 3. Steve Pott will enter this information in next year's progress report. 4 Were all federally reportable incident reports listed and information correct? - Progress 1 1 Report Attachment 4 (A1d) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of PHMSA Pipeline Data Mart found only three incident reports were filed by one operator for incidents in CY2013. A discussion with Steve Pott determined five additional gas incidents were listed because they consider them significant even though they do not meet the reporting requirements of 191.3. We suggested in the future listing the additional incidents in the Note Section of Attachment 4 for clarification to the reader. 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 (A1e) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: A review of Attachment 5 found the number of carried over violations plus violations found minus number corrected equal the correct number. Additionally, number of civil penalties 6 and dollars collected $27,240.00 was an improvement from previous years. Three penalties assessed on Xcel Energy Company (192.303, 192.317, 192.751), three penalties on Pleasant View Mobile Home Park (192.605, 192.615, 192.453) and one penalty on Colorado Natural Gas (192.614). Dollars assessed were $30,000 against Xcel Energy and Pleasant View and $24,540 against Colorado Natural Gas. Dollars collected were Xcel $25,000, Pleasant View $500 and Colorado $1,740. 6 Were pipeline program files well-organized and accessible? - Progress Report 2 2 Attachment 6 (A1f, A4) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: A review of office record files and discussion with Program Manager found the information to be accessible. Program files are maintained in the Program Manager's office. 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 (A1g) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: A detailed review of all employees listed on Attachment 7 was compared to SABE training transcript. The Gas IM Lead DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 3

Inspector has completed the PL31C course as of May 7, 2013. A loss of points occurred in the previous review due to failure to complete the course prior to performing the IM inspection. A review of all employees training documentation indicated great improvement has been made in attending training to courses at TQ. All CPUC inspectors, except Bryan Fry who has until 2018, have completed the seven required courses within five years. No areas of concern. 8 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report 1 1 Attachment 8 (A1h) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of PHMSA State Program rules and regulations in SharePoint confirm the civil penalty amounts for pipeline safety are the same as the Federal amounts. All Federal regulations pertaining to Part 192, 193, 198 and 199 have been adopted. No areas of concern. 9 List of Planned Performance - Did state describe accomplishments on Progress Report in detail - Progress Report Attachment 10 (H1-3) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: 1 1 A detailed description of the CO PUC annual and long term goals was provided in attachment 10. No areas of concern. 10 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only No areas of concerns were found and CPUC has generally met the requirements of this section of the review. Total points scored for this section: 10 Total possible points for this section: 10 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 4

PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspections (B1a) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document Section 5, page38 indicated all intrastate operators will be inspected at intervals not to exceed two to three years and based on risk assessment. 2 IMP Inspections (including DIMP) (B1b) 1 0 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document found again the plan does not include an established frequency or risk based approached method to schedule IMP and DIMP inspections. This is the second year this has occurred therefore a loss of one point occurred. 3 OQ Inspections (B1c) 1 0 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document found again the plan does not include an established frequency or risk based approached method to schedule OQ inspections. This is the second year this has occurred therefore a loss of one point occurred. 4 Damage Prevention Inspections (B1d) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document, Section 5, page 35 indicated Damage Prevention Activities are included. The frequencies of inspections are driven by Public Awareness and Colorado 811 meetings established in the first quarter of the year. 5 On-Site Operator Training (B1e) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document, Section 5, page 33 indicated on- site operator training is provided on an as need or TQ Seminar. 6 Construction Inspections (B1f) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document, Section 5, page 33 indicated this inspection is performed daily or as information is provided by the operator. 7 Incident/Accident Investigations (B1g) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document, Section 5, page 34 indicated this information is listed. No areas of concern. 8 Does inspection plan address inspection priorities of each operator, and if necessary each 6 6 unit, based on the following elements? (B2a-d, G1,2,4) Yes = 6 No = 0 Needs Improvement = 1-5 a. Length of time since last inspection Yes No Needs Improvement b. Operating history of operator/unit and/or location (includes leakage, incident and compliance activities) Yes No Needs Improvement DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 5

c. Type of activity being undertaken by operators (i.e. construction) Yes No Needs Improvement d. Locations of operators inspection units being inspected - (HCA's, Geographic areas, Population Density, etc) Yes No Needs Improvement e. Process to identify high-risk inspection units that includes all threats - (Excavation Damage, Corrosion, Natural Forces, Outside Forces, Material and Welds, Equipment, Yes No Needs Improvement Operators and any Other Factors) f. Are inspection units broken down appropriately? Yes No Needs Improvement Evaluator Notes: Yes, a review of Colorado Public Utilities Commission (CPUC) Program Guidelines document Appendix tab 9 shows all the items listed above are included in their inspection plan. 9 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: Loss of points occurred: B.2: A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document found again the plan does not include an established frequency or risk based approached method to schedule IMP and DIMP inspections. This is the second year this has occurred therefore a loss of one point occurred. B.3 A review of Colorado Public Utilities Commission (CPUC) Program Guidelines document found again the plan does not include an established frequency or risk based approached method to schedule OQ inspections. This is the second year this has occurred therefore a loss of one point occurred. Total points scored for this section: 13 Total possible points for this section: 15 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 6

PART C - Program Performance Points(MAX) Score 1 Was ratio of Total Inspection person-days to total person days acceptable? (Director of State Programs may modify with just cause) Chapter 4.3 (A12) Yes = 5 No = 0 5 5 A. Total Inspection Person Days (Attachment 2): 447.50 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 3.83 = 843.33 Ratio: A / B 447.50 / 843.33 = 0.53 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: A. Total Inspection Person Days (Attachment 2) = 447.5 B. Total Inspection Person Days Charged to the program (220*Number of Inspection person years (Attachment 7) = 843.33326 Formula: Ratio = A/B = 447.5/843.33326 = 0.53 The ratio was 0.53 which exceeded the minimum of 0.32. Therefore, 5 points awarded. 2 Has each inspector and program manager fulfilled the T Q Training Requirements? (See 5 5 Guidelines for requirements) Chapter 4.4 (A8-A11, G19) Yes = 5 No = 0 Needs Improvement = 1-4 a. Completion of Required OQ Training before conducting inspection as lead? Yes No Needs Improvement b. Completion of Required DIMP*/IMP Training before conducting inspection as lead? *Effective Evaluation CY2013 Yes No Needs Improvement c. Root Cause Training by at least one inspector/program manager Yes No Needs Improvement d. Note any outside training completed Yes No Needs Improvement Evaluator Notes: Yes, CPUC personnel have completed the mandatory training for Gas Integrity Management in CY2013. Steve Pott is the lead inspector for DIMP/IMP. One individual is on schedule to complete mandatory gas courses within five years. 3 Did state records and discussions with state pipeline safety program manager indicate 2 2 adequate knowledge of PHMSA program and regulations? Chapter 4.1,8.1 (A5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, Steve Pott has over twenty-two years of experience and demonstrates a good working knowledge about the pipeline safety program and regulations. No issues. 4 Did state respond to Chairman's letter on previous evaluation within 60 days and correct or address any noted deficiencies? (If necessary) Chapter 8.1 (A6-7) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: PHMSA State Program letter to CPUC Chairman Epel, dated June 13, 2013 required a response to Zach Barrett, Director PHMSA State Programs within sixty days. The response letter was received on August 28, 2013. A request by Steve Pott the response letter is provided outside of the due date was granted by Zach Barrett. Therefore, no loss of points occurred on this question. 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 (A3) 2 2 Yes = 2 No = 0 Evaluator Notes: Yes, TQ seminar was held in Colorado Springs, CO at the Double Tree Hotel on February 11-13, 2014. The number of attendees was approximately two hundred and fifty. DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 7

6 Did state inspect all types of operators and inspection units in accordance with time intervals established in written procedures? Chapter 5.1 (B3) Yes = 5 No = 0 Needs Improvement = 1-4 5 5 Evaluator Notes: Yes, a review of files and data base indicated all inspection units are reviewed within the required time schedule. 7 Did inspection form(s) cover all applicable code requirements addressed on Federal 2 2 Inspection form(s)? Did State complete all applicable portions of inspection forms? Chapter 5.1 (B4-5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, a review of files and information in CPUC procedure manual indicate they utilize the federal inspection forms for all operators. 8 Did the state review operator procedures for determining if exposed cast iron pipe was 1 1 examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Chapter 5.1 (B7) Yes = 1 No = 0 Evaluator Notes: Yes, this is listed in the federal standard inspection document they use. No areas of concern. Currently, Xcel Energy Company has ten miles of cast iron pipe and anticipates all of the material will be removed on or before December 31, 2014. 9 Did the state review operator procedures for surveillance of cast iron pipelines, including 1 1 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) Chapter 5.1 (B8) Yes = 1 No = 0 Evaluator Notes: Yes, this item is reviewed with the operator and listed in the federal standard inspection form used by CPUC staff members. No issues of concern. 10 Did the state review operator emergency response procedures for leaks caused by 1 1 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) Chapter 5.1 (B9) Yes = 1 No = 0 Evaluator Notes: Yes, this item is reviewed with the operator and listed in the federal standard inspection form used by CPUC staff members. No issues of concern. 11 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? Chapter 5.1 (B10,E5) Yes = 1 No = 0 Evaluator Notes: Yes, this information is review during their inspection visits. 1 1 12 Has the state reviewed Operator Annual reports, along with Incident/Accident reports, for 2 2 accuracy and analyzed data for trends and operator issues? Data Initiative (G6-9,G16) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: of concern. Yes, CPUC staff members review each operator's annual reports and contact the operator if a discrepancy is found. No areas DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 8

13 Did state input all applicable OQ, IMP inspection results into federal database in a timely 2 1 manner? This includes replies to Operator notifications into IMDB database. Chapter 5.1 (G10-12) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, OQ inspections were conducted and the results for eighteen operators were found in PHMSA's OQ database. This is an improvement from last year's review. Additionally, a review of IMP federal database found no inspections were conducted in CY2013. A review of office files found an IMP inspection was performed on Source Gas (Rocky Mountain Natural Gas) on August 6, 2013 but the input results pertaining to the inspection was not unloaded into the federal database. Therefore, a loss of one point occurred. 14 Has state confirmed intrastate transmission operators have submitted information into NPMS database along with changes made after original submission? (G14) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: Yes, this is reviewed by staff members by accessing the NPMS database and reviewing the operators under their jurisdiction. They are Black Hills Energy, Xcel Energy and Source Gas. 15 Is the state verifying operators are conducting drug and alcohol tests as required by regulations? This should include verifying positive tests are responded to in accordance with program. 49 CFR 199 (I1-3) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: 2 2 Yes, a review of inspection reports found this item was checked using PHMSA's form 13. CPUC completed the initial review of all operators' drug and alcohol testing programs in past years but continue to review this item during each inspection visit. 16 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 determined in the operators plan. 49 CFR 192 Part N (I4-7) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, this is checked during the standard inspection visits. 2 2 17 Is state verifying operator's gas transmission integrity management programs (IMP) are 2 2 up to date? This should include a previous review of IMP plan, along with monitoring progress on operator tests and remedial actions. In addition, the review should take in to account program review and updates of operators plan(s). 49 CFR 192 Subpart 0 (I8-12) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, this is checked during the standard inspection visits. They have verified the IMP plans and checked to make sure the operator has taken remedial action to correct any outstanding issues they found. 18 Is state verifying operator's gas distribution integrity management Programs (DIMP)? This should include a review of DIMP plans, along with monitoring progress. In addition, the review should take in to account program review and updates of operators plan(s). 49 CFR 192 Subpart P DIMP ? First round of program inspections should be complete by December 2014 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: CPUC has made progress in completing 57% of the DIMP inspections in CY2013. A review of files found 8 of the 14 operators under their jurisdiction have been reviewed. CPUC is on schedule to complete all inspections before the due date of December, 2014. DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 9

19 Is state verifying operators Public Awareness programs are up to date and being followed. State should also verify operators have evaluated Public Awareness programs for effectiveness as described in RP1162. 49 CFR 192.616 (I13-16) PAPEI Effectiveness Inspections should be complete by December 2013 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, CPUC completed all PAPEI inspections before the due date of December, 2013. A review of office files found fourteen out of fourteen operators have been completed and uploaded into the data base. No areas of concern. 20 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). (G20-21) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, this is accomplished via Colorado Public Utilities Commission's web site and mailings to all operators. 21 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) Reports? Chapter 6.3 (B6) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No safety related condition reports were submitted in CY2013. 1 NA 22 Did the State ask Operators to identify any plastic pipe and components that has shown a 1 1 record of defects/leaks and what those operators are doing to mitigate the safety concerns? (G13) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, this is accomplished during the inspection visit and asking questions to the operator. No areas of concern. 23 Did the state participate in/respond to surveys or information requests from NAPSR or PHMSA? (H4) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, they have responded to information and surveys conducted by NAPSR and NARUC. No issues. 1 1 24 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. Info Only = No Points Evaluator Notes: Info Only Info Only No waivers or special permits have been issued by CPUC to any operator. 25 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: C.13 a review of files found an IMP inspection was performed on Source Gas (Rocky Mountain Natural Gas) on August 6, 2013 but the input results pertaining to the inspection was not unloaded into the federal database. Therefore, a loss of one point occurred. Total points scored for this section: 44 Total possible points for this section: 45 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 10

PART D - Compliance Activities Points(MAX) Score 1 Does the state have written procedures to identify steps to be taken from the discovery to 4 4 resolution of a probable violation? Chapter 5.1 (B12-14, B16, B1h) Yes = 4 No = 0 Needs Improvement = 1-3 a. Procedures to notify an operator (company officer) when a noncompliance is identified Yes No Needs Improvement b. Procedures to routinely review progress of compliance actions to prevent delays or breakdowns Yes No Needs Improvement Evaluator Notes: a. Yes, this procedure is identified on pages 30 & 35 of the CO PUC Guidelines for State Participating in the Pipeline Safety Program. b. Yes, this is located on page 42 under the title Tracking Pipeline Safety Activities / Violations. No areas of concern. 2 Did the state follow compliance procedures (from discovery to resolution) and adequately 4 4 document all probable violations, including what resolution or further course of action is needed to gain compliance? Chapter 5.1 (B11,B18,B19) Yes = 4 No = 0 Needs Improvement = 1-3 a. Were compliance actions sent to company officer or manager/board member if municipal/government system? Yes No Needs Improvement b. Were probable violations documented? Yes No Needs Improvement c. Were probable violations resolved? Yes No Needs Improvement d. Was the progress of probable violations routinely reviewed? Yes No Needs Improvement Evaluator Notes: Yes, a review of files and letters clearly show probable violations were issued to the officer of the company, documented, violations cleared and tracked in accordance to their procedures. No areas of concern. 3 Did the state issue compliance actions for all probable violations discovered? (B15) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: Yes, probable violations were issued when discovered by staff members during their inspection visits. A review of files found fifty nine violations were cited in CY2013. No areas of concern. 4 Did compliance actions give reasonable due process to all parties? Including "show 2 2 cause" hearing if necessary. (B17, B20) Yes = 2 No = 0 Evaluator Notes: Yes, the operator is allowed an opportunity to present information on the findings of facts/correct the violation or request a hearing. CPUC Rule Numbers 4935/4936/4938 describes the "show cause" procedure. 5 Is the program manager familiar with state process for imposing civil penalties? Were 2 2 civil penalties considered for repeat violations (with severity consideration) or violations resulting in incidents/accidents? (describe any actions taken) (B27) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, Steve Pott is familiar with imposing civil penalties. In this regard, three separate civil penalties were assessed in CY2013 against Xcel Energy, Pleasant View Mobile Home Park and Colorado Natural Gas Company. 6 Can the State demonstrate it is using their enforcement fining authority for pipeline safety 1 1 violations? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, in CY2011 CPUC assessed a civil penalty against Xcel Energy of $150,000 and collected the amount in CY2011. Additionally, in CY2013 three civil penalties were assessed and collected against three operators for non-compliance. DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 11

7 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only No areas of concerns were found and CPUC has generally met the requirements of this section of the review. Total points scored for this section: 15 Total possible points for this section: 15 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 12

PART E - Incident Investigations Points(MAX) Score 1 Does state have adequate mechanism to receive and respond to operator reports of 2 2 incidents, including after-hours reports? And did state keep adequate records of Incident/ Accident notifications received? Chapter 6 (A2,D1-3) Yes = 2 No = 0 Needs Improvement = 1 a. Acknowledgement of MOU between NTSB and PHMSA (Appendix D) Yes No Needs Improvement b. Acknowledgement of Federal/State Cooperation in case of incident/accident (Appendix E) Yes No Needs Improvement Evaluator Notes: A discussion with Steve Pott indicated he was familiar with the location of the two MOU documents and cooperation between PHMSA and State Programs when an accident or incident occurs in Colorado. The MOU's are located in CPUC guidelines document. No issues. 2 If onsite investigation was not made, did state obtain sufficient information from the 1 1 operator and/or by other means to determine the facts to support the decision to not go on-site? Chapter 6 (D4) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A review individual file folders on incidents or non-reportable incidents found three reportable and five non-reportable incidents. Detailed notes and findings of facts were well organized. No issues of concern. 3 Were all incidents investigated, thoroughly documented, and with conclusions and 3 3 recommendations? (D5) Yes = 3 No = 0 Needs Improvement = 1-2 a. Observations and document review Yes No Needs Improvement b. Contributing Factors Yes No Needs Improvement c. Recommendations to prevent recurrences when appropriate Yes No Needs Improvement Evaluator Notes: Yes, a review of file folders confirms investigations were thoroughly documented with findings of facts and recommendations. No issues. 4 Did the state initiate compliance action for violations found during any incident/accident 1 1 investigation? (D6) Yes = 1 No = 0 Evaluator Notes: No violations were issued pertaining to the reportable and non-reportable incidents that occurred in CY2013. No issues of concern. 5 Did the state assist region office by taking appropriate follow-up actions related to the 1 1 operator incident reports to ensure accuracy and final report has been received by PHMSA? (validate report data from operators concerning incidents/accidents and investigate discrepancies) Chapter 6 (D7) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, a review of the reportable incidents on Xcel Energy facilities that occurred on February 9, March 17 & 19 confirm appropriate follow-up action related to the operator's incident reports were communicated to Pete Katchmar, PHMSA Western Region. No issues. 6 Does state share lessons learned from incidents/accidents? (sharing information, such as: at NAPSR Region meetings, state seminars, etc) (G15) Yes = 1 No = 0 1 1 Evaluator Notes: At the NAPSR Western Region Meetings, CPUC presents their State of the State Report which includes information on the DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 13

incidents that occurred in Colorado. The presentation includes information on the cause of the incidents and any probable violations cited. 7 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only No areas of concerns were found and CPUC has generally met the requirements of this section of the review. Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 14

PART F - Damage Prevention Points(MAX) Score 1 Has the state reviewed directional drilling/boring procedures of each pipeline operator or 2 2 its contractor to determine if they include actions to protect their facilities from the dangers posed by drilling and other trench less technologies? NTSB (E1) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, two questions are located in the Standard Inspection Report of a Gas Distribution System about directional drilling and boring procedures. Fred Johnson during field inspection will review the contractor or company construction crew's procedures and verify the correct boring heads are used for the project. 2 Did the state inspector check to assure the pipeline operator is following its written 2 2 procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? (E2) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, during a construction or other type of field inspection, the inspector is verifying the operator's written procedure pertaining to excavation, marking and positive response. 3 Did the state encourage and promote practices for reducing damages to all underground 2 2 facilities to its regulated companies? (i.e. such as promoting/adopting the CGA Best Practices encouraging adoption of the 9 Elements, etc.) (E3) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: CPUC continues to work with Colorado 811 on attending meetings with contractors and utility representatives promoting public awareness and damage prevention. At the meetings, they are promoting CGA Best Practices and compliance with the state's damage prevention law. 4 Has the agency or another organization within the state collected data and evaluated 2 2 trends on the number of pipeline damages per 1,000 locate requests? (This can include DIRT and other data shared and reviewed by the pipeline safety program) (E4,G5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, CPUC requires the natural gas distribution operators to report damage on their facilities to their organization annually, by March 15th. This is a CPUC rule number 4915 which was updated CY2013. The damage reports are reviewed by staff and evaluated on trends and number of pipeline damages per 1,000 locate request. 5 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only No areas of concerns were found and CPUC has generally met the requirements of this section of the review. Total points scored for this section: 8 Total possible points for this section: 8 DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 15

PART G - Field Inspections Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only Info Only Info Only = No Points Name of Operator Inspected: Anadarko Petroleum Company Name of State Inspector(s) Observed: Joe Molloy, Inspector & Steve Pott, Chief Gas Pipeline Safety Location of Inspection: Brighton, Colorado Date of Inspection: May 13, 2014 Name of PHMSA Representative: Glynn Blanton, US DOT/PHMSA Evaluator Notes: The following Anadarka Petroleum Company representatives were present during the office portion review of the company's records and procedures. Roger Knight, Staff EHS Representative Benjamin Malotte, EHS Representative II Brad Engler, Kerr-McGee Gathering LLC, Field Foreman/Corrosion Tech Chad Gabel, Kerr-McGee Gathering LLC, Fieldman Anadarako Petroleum is a gas and liquid gathering system located in Brighton, CO. This was a Standard Gas Gathering Inspection conducted on their facilities using the Standard Inspection Report-Gas Gathering Operator form. 2 Was the operator or operator's representative notified and/or given the opportunity to be present during inspection? (F2) Yes = 1 No = 0 Evaluator Notes: 1 1 Yes, Mr. Roger D. Knight, Staff EHS Representative was conducted by Steve Pott two weeks prior to the inspection. 3 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) (F3) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: concern. Yes, Joe Molloy and Steve Pott used the Federal Standard Inspection Report Form with a modification to the front page to obtain information about the gas gathering operator's information on contacts, operations and other relative data. No areas of 4 Did the inspector thoroughly document results of the inspection? (F4) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, this observer noted comments and information about answer to questions was entered on the standard inspection form. Additionally questions were asked about the operator's lines and how the lines were installed. Anadarko representatives stated, "They built the system on DOT's Class 3 requirements and consider all pipeline as jurisdictional." They patrol their lines via walking or flying on a routine time period. 5 Did the inspector check to see if the operator had necessary equipment during inspection 1 1 to conduct tasks viewed? (Maps,pyrometer,soap spray,CGI,etc.) (F5) Yes = 1 No = 0 Evaluator Notes: Yes, maps, data and the company's operation procedures manual were provided to Joe Molloy and Steve Pott during the discussion and inspection of the facility. DUNS: 106621282 2013 Natural Gas State Program Evaluation Colorado COLORADO PUBLIC UTILITIES COMMISSION, Page: 16

6 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) (F7) Yes = 2 No = 0 Needs Improvement = 1 a. Procedures 2 2 b. Records c. Field Activities d. Other (please comment) Evaluator Notes: ways. This was a field inspection which consists of a review of maps, records, corrosion control readings, operations procedures and patrolling. No outside field inspection was conducted due to recent snow and muddy conditions along pipeline right of 7 Did the inspector have adequate knowledge of the pipeline safety program and 2 2 regulations? (Evaluator will document reasons if unacceptable) (F8) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, both Joe Molloy and Steve Pott demonstrated a working knowledge of the pipeline safety regulations. No issues of concern. 8 Did the inspector conduct an exit interview? (If inspection is not totally complete the 1 1 interview should be based on areas covered during time of field evaluation) (F9) Yes = 1 No = 0 Evaluator Notes: Yes, both inspectors asked questions and presented information to the operator on making improvements in their procedures manual and awareness campaigns. No violations or areas of concerns were noted or found during the inspection. 9 During the exit interview, did the inspector identify probable violations found during the inspections? (if applicable) (F10) Yes = 1 No = 0 Evaluator Notes: No probable violations were found or noted during the audit. 1 1 10 General Comments: What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) Other. 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
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