2015 GA NG Program Evaluation - ga2015ngprogramevaluation (Georgia; Natural Gas State Program Evaluation)

GA NG Program Evaluation, 2015, page 1Official PDF1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2015 Gas State Program Evaluation for GEORGIA PUBLIC SERVICE 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: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 1#

GA NG Program Evaluation, 2015, page 22015 Gas State Program Evaluation -- CY 2015 Gas State Agency: Georgia Rating: Agency Status: Date of Visit: 03/28/2016 - 04/01/2016 Agency Representative: Michelle Thebert Director, Facilities Protection Unit Georgia Public Service Commission PHMSA Representative: Agustin Lopez, PHMSA, State Programs Don Martin, PHMS State Programs Clint Stephens, PHMSA State Programs Commission Chairman to whom follow up letter is to be sent: Name/Title: Chuck Eaton, Chairman Agency: Georgia Public Service Commission Address: 244 Washington Street City/State/Zip: Atlanta, Georgia 30334 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 2015 (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 9 B Program Inspection Procedures 13 13 C Program Performance 50 50 D Compliance Activities 15 13 E Incident Investigations 11 11 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 119 116 State Rating................................................................................................................................................... 97.5 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 2#

GA NG Program Evaluation, 2015, page 3PART A - Progress Report and Program Documentation Review Points(MAX) Score 1 Accuracy of Jurisdictional Authority and Operator/Inspection Units Data - Progress 1 1 Report Attachment 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Reviewed progress report and compared with Program data base. The total number of unit inspections were verified with no issues identified. 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: with no issues identified. Reviewed state files and database to verify the inspection types and days on Attachment 2. Inspection activities were verified 3 Accuracy verification of Operators and Operators Inspection Units in State - Progress 1 1 Report Attachment 3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Verified Attachment 3 by reviewing PDM and annual reports. Also reviewed state database for accuracy. There were no issued identified with Attachment 3. 4 Were all federally reportable incident reports listed and information correct? - Progress 1 1 Report Attachment 4 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Verified Attachment 4 by reviewing state files and PDM. Incident files were well kept all reportable incidents were listed and investigated. There were no issues identified with Attachment 4. 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Reviewed state files to verify compliance information submitted in Attachment 5. Compliance carry over and found and civil penalties were verified with no issued identified. There was a civil penalty of $6 million assessed to one operator in 2014 but was settled for $250,000 in 2015. 6 Were pipeline program files well-organized and accessible? - Progress Report 2 1 Attachment 6 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: There were some paperwork missing from some files. When reviewing files it was hard to follow the inspections from start to close due to missing correspondence. Some operators request hearings through email which are not kept in the files. GA PSC should keep copies of all emails and correspondence that pertain to the inspections to be able to demonstrate closure of each case. 7 Was employee listing and completed training accurate and complete? - Progress Report 1 1 Attachment 7 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Compared SABA database with GA PSC inspectors to verify completed training. Attachment 7 was accurate and there were no issued identified. DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 3#

GA NG Program Evaluation, 2015, page 48 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report Attachment 8 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: 1 1 Only issue is the amount of civil penalty is below PHMSA guidelines. GA PSC will continue to pursue raising the amount of civil penalty to PHMSA guidelines. This issue is identified in the Progress Report review with a 2 point deduction. 9 List of Planned Performance - Did state describe accomplishments on Progress Report in 1 1 detail - Progress Report Attachment 10 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: The GPSC's planned goals for 2016 is to continue to improve their inspection efficiency and effectiveness, as well as to ensure adequate communications with all natural gas operators in GA. They plan to address all outstanding violations that exceed the 5-year comprehensive inspection cycle. They plan to conduct comprehensive inspections, based on a 5-year cycle, as well as using a risk-based approach for these inspections. They will continue to conduct Drug & Alcohol, Construction, Operator Qualification, and other additional inspections, on an as needed basis. During their April 2016 Pipeline Safety Seminar, there will be several new topics and a new format, including industry-led safety training and demonstrations. Regarding internal goals, Opening Interview and Exit Interview forms will continued to be utilized for all inspections. In addition, an Inspector Evaluation form will be created and used by the Director to determine inspector qualifications to lead an inspection, as required by the state guidelines. This will be implemented during the fall of 2016. The GPSC's long term goals include fostering the improved working relationships with the natural gas operators, as well as continued review and modification of our internal processes. The use of a tiered penalty structure for violations and other enforcement actions will continue, including the observed issues enforcement letter. They continue to get closer to their goals of a more efficient turn- around on inspection reports and correspondence.They are continually looking for various ideas and suggestions for improvement. They have a excellent working relationship with PHMSA's Southern Region, as well as the State Programs Liaison. They continue to improve Their correspondence methods and written documentation for the operators. 10 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: A5. They issued a civil penalty of $6 million in 2014 but settled for $250,000 in 2015. This seems to be a small settlement compared to the amount of civil penalty. A6. Point was deducted for not having complete inspection files. During review of the files certain documents were missing from some files that couldn't demonstrate the closure of the cases. Specifically the files were missing the responses from operator requesting a hearing or meeting in response to the GPSC probable violations. This was due to the requests being made by email and a copy of request not being placed in the operator files. GPSC needs to make copies of all correspondence from operator and place in files in order to track the each case from start to closure. Total points scored for this section: 9 Total possible points for this section: 10 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 4#

GA NG Program Evaluation, 2015, page 5PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspection procedures should give guidance to state inspectors that insure 2 2 consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Pipeline Safety Inspection Program has procedures for inspections. Section IV has pre and post inspection activities along with all types of inspections performed. Inspections are performed at least every 60 months on each operator. There are no issues with the procedure. 2 IMP and DIMP Inspection procedures should give guidance to state inspectors that insure 1 1 consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Pipeline Safety Inspection Program manual has IMP and DIMP inspection procedures. All inspectors leading IMP and DIMP inspections must have taken T&Q required courses. Inspectors must use PHMSA forms and conduct Protocol A on all transmission operators on an annual basis. IMP and DIMP must be conducted every 60 months on each operator. There are no issues with procedures. 3 OQ Inspection procedures should give guidance to state inspectors that insure 1 1 consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Pipeline Safety Inspection Program manual has procedure to conduct OQ inspections. Inspections are performed on each operator every 60 months. Results of OQ inspection are uploaded to PHMSA database within 30 days of the final inspection report. 4 Damage Prevention Inspection procedures should give guidance to state inspectors that 1 1 insure consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post- inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Pipeline Safety Inspection Program manual has damage prevention procedures. This includes Training, Public Education, Enforcement, and review of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617. There are no issues with the procedure. 5 Any operator training conducted should be outlined and appropriately documented as 1 1 needed. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Pipeline Safety Inspection Program manual has operator training procedures. Training is conducted during State Seminar and by request of operators. On site Training is performed either with one operator or multiple operators. There are no issues with the procedures. 6 Construction Inspection procedures should give guidance to state inspectors that insure consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 1 1 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 5#

GA NG Program Evaluation, 2015, page 6Evaluator Notes: Pipeline Safety Inspection Program manual has construction procedures outlined. The procedure includes construction activities, evaluation of design and the integrity testing of new or replacement facilities. It also includes a review of the Operators, or their contractors, directional drilling/boring procedures and includes actions to protect their facilities from the dangers posed by drilling and other trench less technologies. There are no issues with the procedures. 7 Does inspection plan address inspection priorities of each operator, and if necessary each 6 6 unit, based on the following elements? Yes = 6 No = 0 Needs Improvement = 1-5 a. Length of time since last inspection (Within five year interval) Yes No Needs Improvement b. Operating history of operator/unit and/or location (includes leakage, incident and compliance activities) Yes No Needs Improvement 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: GPSC has inspection plan that address inspection priorities for each unit and is based on each element. a. All operators are inspected at least once every 60 months. b. Procedures address the need to increase inspections due to leak history, accident history, annual report information and other risk factors. c. Procedures address the need for increased inspections due on going activities by operator which include construction, changes to procedures, unaccounted for gas, etc. d. Units are mainly broken down by counties or metropolitan areas. For larger metro areas units may be broken down into several units. e. Procedures identify the high risk inspection process due to certain threats. f. Yes, units are broken down appropriately and in accordance to their procedures. 8 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only GPSC is mainly complying with section B of the Evaluation. They have good procedures in place and inspection plan. Total points scored for this section: 13 Total possible points for this section: 13 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 6#

GA NG Program Evaluation, 2015, page 7PART 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 Yes = 5 No = 0 5 5 A. Total Inspection Person Days (Attachment 2): 965.50 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 10.00 = 2200.00 Ratio: A / B 965.50 / 2200.00 = 0.44 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: Total inspection person-days is acceptable. Reviewed database to verify how person-days are tracked and compare with progress report. There were no issues with the ratio of total inspection person-days to total person days. 2 Has each inspector and program manager fulfilled the T Q Training Requirements? (See 5 5 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? 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 e. Verify inspector has obtained minimum qualifications to lead any applicable standard inspection as the lead inspector. Yes No Needs Improvement Evaluator Notes: Yes. Inspectors met all T&Q training requirements to lead IMP, DIMP and standard inspections. Root cause training has been taken by several of GA inspectors. Program manager is completing all required training this year. There are no issues identified with training requirements. 3 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 = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: Yes. Michelle Thebert has been the Program Manager for several years now and is very knowledgeable of the pipeline safety program. She has taken several T&Q courses and is scheduled to attend other courses. 4 Did state respond to Chairman's letter on previous evaluation within 60 days and correct 2 2 or address any noted deficiencies? (If necessary) Chapter 8.1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the Chairman responded within the 60 day requirement. Letter was sent on April 24 ,2015 and response was received on June 23, 2015. 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 Yes = 2 No = 0 Evaluator Notes: Yes. GPSC holds a T&Q seminar every year which is well attended by the operators. 2 2 6 Did state inspect all types of operators and inspection units in accordance with time intervals established in written procedures? Chapter 5.1 5 5 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 7#

GA NG Program Evaluation, 2015, page 8Yes = 5 No = 0 Needs Improvement = 1-4 Evaluator Notes: In reviewing the IMP databases and the GPSC records, the interval between the comprehensive IMP inspections exceeded the requirement of 60 months per their procedures and the State Guidelines. The only IMP inspections performed on operators were Protocol A inspections. The GPSC needs to conduct comprehensive IMP plan inspections every 60 months. Since PHMSA's guidelines to inspect every operator within 5 years was implemented several years ago there is no point deduction. 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the PSC utilizes the PHMSA forms to document their inspections. Inspection reports were reviewed for completion and accuracy with no issues found. 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 Yes = 1 No = 0 Evaluator Notes: Yes, the PSC utilizes the PHMSA forms to conduct inspections which cover exposed cast iron procedures. Inspection reports were reviewed during the evaluation to verify the review of these procedures. 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 Yes = 1 No = 0 Evaluator Notes: Yes, the PSC utilizes the PHMSA form which covers the surveillance of cast iron pipeline procedures. There was one operator that discovered some cast iron which the PSC is aware. The PSC reviewed their procedures and is in the process of completing their inspection. 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 Yes = 1 No = 0 Evaluator Notes: Yes, the PSC reviews the operator procedures during their inspections. They utilize the PHMSA inspection form which covers the emergency response procedures for leaks. Reviewed inspection reports during evaluation to confirm the procedures are being checked. 11 Did the state review operator records of previous accidents and failures including 1 1 reported third party damage and leak response to ensure appropriate operator response as required by 192.617? Chapter 5.1 Yes = 1 No = 0 Evaluator Notes: Yes, the PSC conduct accident investigations and review Forms 7100 to assure operator response. They also review operator records during their inspections to ensure the appropriate response in accordance with 192.617 12 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 Evaluator Notes: DUNS: 110305872 2015 Gas State Program Evaluation 2 2 Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 8#

GA NG Program Evaluation, 2015, page 9Yes, the PSC reviews the annual reports and incident reports and analyze for operator issues. They use the results to risk rank the inspection and increase inspection intervals. The reports are also verified in Pipeline Data Mart and with PRIMIS data. 13 Did state input all applicable OQ, DIMP/IMP inspection results into federal database in a 2 2 timely manner? This includes replies to Operator notifications into IMDB database. Chapter 5.1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Had several OQ inspections that were uploaded past 6 months from completing inspections. Section IV, #3 of procedures state that OQ and IMP results will be uploaded within 30 days of completing the inspection. The PSC must make sure they are following their procedure in the future to avoid point deductions. 14 Has state confirmed intrastate transmission operators have submitted information into NPMS database along with changes made after original submission? Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: The PSC verifies NPMS updates during their inspections. Inspection reports were reviewed by the PSC to assure NPMS updates are being completed by operators. 15 Is the state verifying operators are conducting drug and alcohol tests as required by 2 2 regulations? This should include verifying positive tests are responded to in accordance with program. 49 CFR 199 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the PSC conducts drug and alcohol inspections to assure compliance with the regulations. Reviewed inspection reports with no issues identified. 16 Is state verifying operators OQ programs are up to date? This should include verification 2 2 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The PSC conducts field verifications Protocol 9 inspections during their inspections to assure qualifications of the operators. Program reviews are conducted every 60 months. OQ database has uploaded inspection reports. 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The PSC has not conducted IMP program reviews in the last 60 months. The only program review recently conducted was of AGL in October 2015. The only other IMP inspections performed are Protocol A on operators. The PSC has not performed any field verification inspection on any operator. The PSC needs to improve on their IMP inspections to assure each operator is in compliance. In addition, the PSC needs to conduct field verification inspections to monitor remedial actions. 18 Is state verifying operator's gas distribution integrity management Programs (DIMP)? 2 2 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 have been complete by December 2014 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The PSC completed all first round DIMP inspections by December 2014. They did not conduct any DIMP inspection in 2015 just follow up inspections. DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 9#

GA NG Program Evaluation, 2015, page 1019 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 conducted every four years per RP1162 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: 2 2 The PSC performed PA follow up inspection in 2015. Review operator effectiveness during the follow up inspections. 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). Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, the PSC meets with operators by request to discuss any issues. Also, all of the PSC inspection are made available to the public by docket numbers on their website. 21 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) 1 1 Reports? Chapter 6.3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: The PSC has the procedure to respond to SRC. The PSC also reviews the reports during their inspections and verifies them using PDM. 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? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, the PSC asked the question during their inspections. They utilize their form to document the operators response and actions. 23 Did the state participate in/respond to surveys or information requests from NAPSR or PHMSA? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, Michelle Thebert responds to all NAPSR and PHMSA surveys. 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. No = 0 Needs Improvement = .5 Yes = 1 Evaluator Notes: Georgia PSC has not issued any waivers or special permits. 1 1 25 Did the state attend the National NAPSR Board of Directors Meeting in CY being evaluated? No = 0 Needs Improvement = .5 Yes = 1 Evaluator Notes: Yes they attended the National NAPSR meeting in Phoenix, AZ. 1 1 26 DUNS: 110305872 2015 Gas State Program Evaluation Discussion on State Program Performance Metrics found on Stakeholder Communication 2 2 site - http://primis.phmsa.dot.gov/comm/states.htm No = 0 Needs Improvement = 1 Yes = 2 a. Discussion of Potential Accelerated Actions (AA's) based on any negative trends Yes No Needs Improvement Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 10#

GA NG Program Evaluation, 2015, page 11b. NTSB P-11-20 Meaningful Metrics Yes No Needs Improvement Evaluator Notes: The PSC reviews performance metrics found in PRIMIS but needs to analyze for any negative trends and take action to lower the negative trends. Currently trends are positive except for hazardous leaks, which is and improvement but actions should be considered to improve further. 27 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: 6. The PSC needs to inspect operators at intervals in accordance with their procedures. All types of inspection should be performed at least once every 60 months specifically IMP inspections. 13. The PSC needs to improve on the uploading of the OQ inspections into the PHMSA Database. Their procedure states that they will upload inspections 30 days after completing inspection but in some cases it was taking over 6 months. 17. The PSC has not conducted IMP program reviews in the last 60 months. The only program review recently conducted was of AGL in October 2015. The only other IMP inspections performed are Protocol A on operators. The PSC has not performed any field verification inspection on any operator. The PSC needs to improve on their IMP inspections to assure each operator is in compliance. In addition, the PSC needs to conduct field verification inspections to monitor remedial actions. Total points scored for this section: 50 Total possible points for this section: 50 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 11#

GA NG Program Evaluation, 2015, page 12PART 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 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: Yes. The GPSC has procedures which has steps to the resolution of probable violation. Rule 515-9-3-01 and 07 is the law which requires the PSC to follow for processing probable violations. The PSC also conducts follow-up inspection to assure probable violations are corrected and no breakdowns and delays in the process. 2 Did the state follow compliance procedures (from discovery to resolution) and adequately 4 3 document all probable violations, including what resolution or further course of action is needed to gain compliance? Chapter 5.1 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. Document probable violations Yes No Needs Improvement c. Resolve probable violations Yes No Needs Improvement d. Routinely review progress of probable violations Yes No Needs Improvement e. Were applicable civil penalties outlined in correspondence with operator(s) Yes No Needs Improvement Evaluator Notes: a. Compliance actions are were sent to company officials or to municipal officials. b. Reviewed files and the PSC is documenting probable violations in their inspection reports along with compliance letters. c. There seems to be a breakdown or delay in the processing of AGL's compliance resolution. In reviewing several AGL reports it seems that there were some compliance actions that haven't been resolved, in some instances taking over a year. In addition, during the evaluation it was noted that in an Integrity Management Program (IMP) Inspection conducted in October 2015, there was a serious probable violation noted by the GPSC inspector which involved the reclassification of transmission pipelines to distribution mains. As of the date of the Field Evaluation on April 12-14, 2016 the inspection report or the issuance of a Notice of Probable Violation (NOPV) was still incomplete. The GPSC Pipeline Safety Inspection Procedures, Section V state that the inspection report will be submitted typically within 30 days of the start of the inspection. The lapse of six months from the start of the IMP inspection without completing the inspection report or issuing an NOPV is not per your procedures. The GPSC needs to improve on processing the inspection reports and the issuance of NOPV to resolve probable violations. d. The GPSC reviews progress of probable violations by conducting follow-up of open cases during each inspection. e. Civil Penalties are outlined in each compliance action if applicable. The PSC did collect and issue civil penalties in 2015. 3 Did the state issue compliance actions for all probable violations discovered? Yes = 2 No = 0 Needs Improvement = 1 2 1 Evaluator Notes: During the field and HQ evaluation it was noted that during an IMP inspection in October 2014 the PSC discovered that an operator was violating the regulation by reclassifying their transmission lines to distribution. As of April 2015 the PSC has not taken any action against the operator. This being a serious issue, taking over 6 months to resolve or issue a non compliance is not acceptable. The PSC needs to improve and take compliance action immediately with serious violations are discovered. 4 Did compliance actions give reasonable due process to all parties? Including "show 2 2 cause" hearing if necessary. Yes = 2 No = 0 Evaluator Notes: Yes, the PSC compliance actions gives reasonable due process to all parties. Their procedures and rule gives due process and allows for formal or informal hearings. DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 12#

GA NG Program Evaluation, 2015, page 135 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the program manager is familiar with the civil penalty process. Civil Penalties were issued in 2015 and collected. The PSC issued civil penalties due to incidents in which they conducted investigations. There is a current incident which is still pending enforcement action due to operator not conducting adequate investigation to find the root cause of the incident. 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, the GPSC issued civil penalties of $112,500 and collected $250,000 from previous year. The state has civil penalty authority and has demonstrated the use of the civil penalties. 7 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: 2(c).There seems to be a breakdown or delay with the GPSC when dealing with AGL. In reviewing the files there seemed to be some time between the issuance of a probable violation to the resolution. There does not seem to be an issue with other private operators or municipals. the GPSC needs to improve the time frame it takes to resolve probable violations with AGL. 3.During the field and HQ evaluation it was noted that during an IMP inspection in October 2014 the PSC discovered that an operator was violating the regulation by reclassifying their transmission lines to distribution. As of April 2015 the PSC has not taken any action against the operator. This being a serious issue, taking over 6 months to resolve or issue a non compliance is not acceptable. When the GPSC discovers a serious violations immediate action needs to be taken to address or resolve the issue. The reclassification of a transmission pipeline to distribution is a safety concern that needs to be resolved immediately. The GPSC needs to improve in this area. Total points scored for this section: 13 Total possible points for this section: 15 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 13#

GA NG Program Evaluation, 2015, page 14PART E - Incident Investigations Points(MAX) Score 1 Does the state have written procedures to address state actions in the event of an incident/ 2 2 accident? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Pipeline Safety Inspection Program manual has procedures for receiving incident notifications under Section VIII. Also Rule 515-9-5-01 has Emergency procedures detailing the actions of the PSC. 2 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 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: Pipeline Safety Inspection Program manual has procedures detailing the response to receiving and responding to incidents. Operators are given a Pipeline Safety Inspector assigned to them to contact in case of an incident. PSC conducts their investigation for the cause and for any violation of the regulations. a. Although the PSC is aware of the MOU between NTSB and PHMSA, they must include it in their procedures which explains the MOU. procedures. b. The PSC must include the acknowledgement between federal and state cooperation in case of incident into their 3 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 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: The PSC conducted and investigation on all reportable incidents. Investigation reports were compared to all reported incidents. 4 Were all incidents investigated, thoroughly documented, and with conclusions and 3 3 recommendations? 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. the PSC incident reports were reviewed during the evaluation and found that all were documented with observations, contributing factors, recommendations and violations were found. There were several incidents in which the PSC issued probable violations. 5 Did the state initiate compliance action for violations found during any incident/accident 1 1 investigation? Yes = 1 No = 0 Evaluator Notes: Yes, in reviewing the incident investigation reports, there were several instances in which the PSC issued non compliance actions. Investigation reports were reviewed during the evaluation and found no issues. DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 14#

GA NG Program Evaluation, 2015, page 156 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 report data from operators concerning incidents/accidents and investigate discrepancies) Chapter 6 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: 1 1 The Georgia PSC assists PHMSA southern region with any question they may have about incident follow-up actions. 7 Does state share lessons learned from incidents/accidents? (sharing information, such as: at NAPSR Region meetings, state seminars, etc) Yes = 1 No = 0 Evaluator Notes: Yes the PSC shares lessons learned during the NAPSR region meetings and at state seminar. 1 1 8 General Comments: Info Only = No Points Evaluator Notes: The Georgia PSC is mainly meeting the requirements of Part E. Info Only Info Only Total points scored for this section: 11 Total possible points for this section: 11 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 15#

GA NG Program Evaluation, 2015, page 16PART 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The GPSC utilizes PHMSA forms to perform and document inspections. The questions are incorporated in the form and are covered by the inspectors during their inspections. Reviewed inspection reports to assure drilling/boring procedures are reviewed and checked during the inspections. No issues identified. 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? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: GPSC inspectors cover damage prevention procedures during comprehensive inspections and during incidents if necessary. The PSC has also dedicated one inspector (Mike Small) to review damage prevention procedures and 3rd party damage incidents for any violations of the regulations. 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.) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: PSC rule 515-9-6-01 requires operator to adopt Commission recognized best practices which include CGAs best practices. State inspectors also promote best practices during their inspections and seminars. 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. Collect data and review PRIMIS data to use on the risk ranking for their inspections. The Georgia Utility Facility Protection Act (GUFPA) also collects data and does analysis per Title 25 section 89 515-9-4. 5 General Comments: Info Only = No Points Evaluator Notes: The Georgia PSC is mainly meeting the requirements of Part F. Info Only Info Only Total points scored for this section: 8 Total possible points for this section: 8 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 16#

GA NG Program Evaluation, 2015, page 17PART 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: Atlanta Gas and Light ( AGL)- April 11-15, 2016 ; and (Lawrenceville Gas - May 10 - 12, 2016) Name of State Inspector(s) Observed: Chris Swann- April 11-15, 2016 ; and (Lynn Buffington - May 10 - 12, 2016) Location of Inspection: (Marietta, GA- April 11-15, 2016) ; and (Lawrenceville, GA - May 10 - 12, 2016) Date of Inspection: (AGL -April 11-15, 2016) ; (Lawrenceville Gas - May 10 - 12, 2016) Name of PHMSA Representative: Agustin Lopez, Clint Stephens - April 11-15, 2016 ; (Don Martin - May 10 - 12, 2016) Evaluator Notes: April 11-15, 2016; Evaluated Mr. Chris Swann conduct an inspection of AGL's transmission pipeline in Marietta, GA. Mr. Swann reviewed specific procedures and records during the office portion of the inspection. He utilized a PHMSA form to conduct the inspection and used it as a guide. He performed a field inspection of AGL's facilities which included valve sites, rectifiers, road crossings and regulator stations. Mr. Swann performed and excellent job and is very knowledgeable of the pipeline safety rules and regulations. Lawrenceville Gas - May 10 - 12, 2016 - Observed Lynn Buffington leading a Standard Distribution Inspection. This inspection involved records review and field inspection for leak detection and repair, overpressure protection and valve maintenance portion of a standard inspection. The remaining portions of the standard inspection will be completed after the evaluation site visit. Mr. Buffington was assisted by Daphne Jones. Lawrenceville Gas is a municipal gas distribution operator with approximately 46,700 service lines and 1345 miles of main. 2 Was the operator or operator's representative notified and/or given the opportunity to be 1 1 present during inspection? Yes = 1 No = 0 Evaluator Notes: April 11-15, 2016: Yes, the operator was notified in advance with enough notice to give the opportunity to have their representatives present. Lawrenceville Gas - May 10 - 12, 2016 - Mr. Buffington sent an email to Mike Hutchins, Lawrenceville Gas Director, on April 15, 2016. Representatives were present. 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) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: April 11-15, 2016: Yes, Mr. Swann utilized a PHMSA form to guide him through the inspection. Lawrenceville Gas - May 10 - 12, 2016 - Mr. Buffington utilized PHMSA Inspection Form 2 during the inspection and did use it as a guide as he progressed through the inspection. 4 Did the inspector thoroughly document results of the inspection? Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: April 11-15, 2016; Yes, Mr. Swann documented his inspection on the form and also took notes to document his inspection. Lawrenceville Gas - May 10 - 12, 2016 - Mr. Buffington entered results in to Form 2 as he progressed through the inspection. Additional work sheet forms were also completed during the inspection. 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.) 1 1 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 17#

GA NG Program Evaluation, 2015, page 18Yes = 1 No = 0 Evaluator Notes: perform their tasks. April 11-15, 2016;Yes, the operator was required to take p/s readings and read rectifiers and they had the proper equipment to Lawrenceville Gas - May 10 - 12, 2016 - Yes, and if calibration is required, dates of calibration were reviewed. 2 2 6 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) Yes = 2 No = 0 Needs Improvement = 1 a. Procedures b. Records c. Field Activities d. Other (please comment) Evaluator Notes: April 11-15, 2016; Inspector reviewed procedures, records and performed a field inspection of AGL's facilities. He performed a very thorough review and inspection. Lawrenceville Gas - May 10 - 12, 2016 - No issues identified with areas covered. 7 Did the inspector have adequate knowledge of the pipeline safety program and 2 2 regulations? (Evaluator will document reasons if unacceptable) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: April 11-15, 2016: Yes, Mr. Swann was very knowledgeable of the pipeline safety program and regulations. He performed an excellent job. Lawrenceville Gas - May 10 - 12, 2016 - Mr. Buffington has been in an inspector's role for many years and has completed all of the required training at PHMSA's Training and Qualifications facility. He exhibited very good knowledge of the pipeline safety regulations. 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) Yes = 1 No = 0 Evaluator Notes: April 11-15, 2016:Yes, Mr. Swann conducted an exit interview to close the inspection. He notified the operator of any outstanding issues and concerns that arouse due to the inspection. Lawrenceville Gas - May 10 - 12, 2016- Yes, on May 12th. The City Manager was in attendance along with the representatives of Lawrenceville Gas present during the inspection. 9 During the exit interview, did the inspector identify probable violations found during the 1 1 inspections? (if applicable) Yes = 1 No = 0 Evaluator Notes: April 11-15, 2016:Yes, Mr. Swann identified several issues that were probable violations. The operator still needed to supply further documentation to resolve the issues. Lawrenceville Gas - May 10 - 12, 2016 - The inspector stated that no probable violations were found during the inspection and none were unresolved from previous inspections. He stated a subsequent inspection would be scheduled to cover portions of the regulations not covered during this week. 10 General Comments: 1) What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) 2) Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) 3) Other. Info Only = No Points Info Only Info Only DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 18#

GA NG Program Evaluation, 2015, page 19a. 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 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 Evaluator Notes: April 11-15, 2016 AGL; abnormal operations, casing readings, cathodic protection readings, inspection of ROW, leak survey, maop, overpressure protection, valve maintenance, OQ, atmospheric corrosion and compliance follow-up were covered during inspection. Inspector did a good review of previous compliance actions which is good practice. Lawrenceville Gas - May 10 - 12, 2016 - leak detection and repair, overpressure protection and valve maintenance were covered during the evaluation. Total points scored for this section: 12 Total possible points for this section: 12 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 19#

GA NG Program Evaluation, 2015, page 20PART H - Interstate Agent State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 2 Are results documented demonstrating inspection units were reviewed in accordance with "PHMSA directed inspection plan"? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 3 Did the state submit documentation of the inspections within 60 days as stated in its latest Interstate Agent Agreement form? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 4 Were 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.) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 5 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 6 Did the state give written notice to PHMSA within 60 days of all probable violations found? Evaluator Notes: Not an interstate agent. Yes = 1 No = 0 Needs Improvement = .5 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Not an interstate agent. 1 NA 8 General Comments: Info Only = No Points Evaluator Notes: Not an interstate agent. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 20#

GA NG Program Evaluation, 2015, page 21PART I - 60106 Agreement State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 2 Are results documented demonstrating inspection units were reviewed in accordance with state inspection plan? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 3 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.) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 4 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 5 Did the state give written notice to PHMSA within 60 days of all probable violations found? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 6 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Does not have a 60106 Agreement. 1 NA 7 General Comments: Info Only = No Points Evaluator Notes: Does not have a 60106 Agreement. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 110305872 2015 Gas State Program Evaluation Georgia GEORGIA PUBLIC SERVICE COMMISSION, Page: 21#