2011 ID NG Program Evaluation - id2011ngprogramevaluation (Idaho; Natural Gas State Program Evaluation)

ID NG Program Evaluation, 2011, page 1Official PDF1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2011 Natural Gas State Program Evaluation for IDAHO 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: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 1#

ID NG Program Evaluation, 2011, page 22011 Natural Gas State Program Evaluation -- CY 2011 Natural Gas State Agency: Idaho Rating: Agency Status: Date of Visit: 06/18/2012 - 06/22/2012 Agency Representative: Ellis Hire, Program Manager PHMSA Representative: Patrick Gaume, State Liaison Commission Chairman to whom follow up letter is to be sent: Name/Title: Mr. Paul Kjellander, President Agency: Idaho Public Utilities Commission Address: (472 W Washington St, 83702) PO Box 83720 City/State/Zip: Boise, Idaho 83720-0074 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 2011 (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 15 C Program Performance 41 41 D Compliance Activities 14 14 E Incident Investigations 3 3 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 103 103 State Rating................................................................................................................................................... 100.0 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 2#

ID NG Program Evaluation, 2011, 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 (A1a) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A1. Yes, Attachment 1 agrees with Attachment 3. ---on Attachment 1 now that 'F' is restored as an appropriate code, use 'F' for Interstate and Interstate LNG transmission lines. It is noted that you had Attachment 1 amended in FedStar. 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 (A1b) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: A2. Yes, with 160 inspection days. Is an increase from 128 reported last year due to OQ, IMP, & other re-inspections in addition to the usual Standard Inspections. 3 Accuracy verification of Operators and Operators Inspection Units in State - Progress Report Attachment 3 (A1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A3. Yes, okay . 1 1 4 Were all federally reportable incident reports listed and information correct? - Progress Report Attachment 4 (A1d) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A4. Yes, 0 incidents, okay. 1 1 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 (A1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A5. Yes, 1 violation, 1 compliance action. okay . 1 1 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: A6. Yes, the files are still paper, but now with mostly electronic backup. All files were easy to find, and were together in the file cabinet . 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 (A1g) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A7. Yes. 1.09 insp-yr, and training is complete. (CRM & HAZWOPER is either waitlisted or scheduled). 1 1 8 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report Attachment 8 (A1h) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A8. Yes, okay. 1 1 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 3#

ID NG Program Evaluation, 2011, page 49 List of Planned Performance - Did state describe accomplishments on Progress Report in 1 1 detail - Progress Report Attachment 10 (H1-3) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: A9. Yes. Okay. IPUC completed all 3 first round PAPEI in 2011 and the first third of 2012. Both operators with transmission lines had TIMP re-inspections in 2011. OQ re-inspections of all 3 operators occurred in 2011 and the first third of 2012. Ellis attended Regional and National NAPSR, & responds to all surveys, and shares best practices at Western NAPSR. (Ellis needs to get on a NAPSR/NARUC Committee). 10 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: A10. The 2009 Intermountain Gas Co "annual Exit Interview" has resulted in the appointment of a Compliance Manager who liaisons between the company and the IPUC. Some of the benefits include better communication, better coordination for all inspections, and a quicker response concerning any found possible violations. With this change, all three regulated Idaho Operators now have Compliance Managers and they are all doing similar work. Total points scored for this section: 10 Total possible points for this section: 10 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 4#

ID NG Program Evaluation, 2011, page 5PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspections (B1a) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: B1. Yes, See the 2012 Program Operating Procedures (POP) 1.2.2, & 3.8. 2 2 2 IMP Inspections (including DIMP) (B1b) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: B2. Yes, POP 1.2.2, & 3.10. 3 OQ Inspections (B1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: B3. Yes, POP 1.2.2 & 3.9 1 1 4 Damage Prevention Inspections (B1d) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: B4. Yes, POP 1.2.2 & 3.2. 5 On-Site Operator Training (B1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: B5. Yes, POP 3.13. 1 1 6 Construction Inspections (B1f) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: B6. Yes, POP 1.2.2 & 3.11. 1 1 7 Incident/Accident Investigations (B1g) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: B7. Yes, POP 3.15 DUNS: 102589939 2011 Natural Gas State Program Evaluation 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 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 Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 5#

ID NG Program Evaluation, 2011, page 6Evaluator Notes: Inspections' B8. Yes. POP 3.23 & Table 1.2.1, 'Table of Inspection Units'; and Attachment B 'Selection Criteria for Operator 9 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only B9. It is IPUC practice to inspect every Unit every year, and with few exceptions that practice is achieved. There is a high level of cooperation and shared goals between IPUC and operators to achieve and maintain safety in Idaho's pipeline systems. Total points scored for this section: 15 Total possible points for this section: 15 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 6#

ID NG Program Evaluation, 2011, 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 (A12) Yes = 5 No = 0 A. Total Inspection Person Days (Attachment 2): 160.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 1.09 = 239.80 Ratio: A / B 160.00 / 239.80 = 0.67 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: C1. Yes. 160 AFO days, 1.09 insp-yr =160/(1.09*220), =.667, .667>.38, okay 5 5 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: C2. Yes. Both inspectors are trained for standard, OQ, and IMP 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 (A5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: C3. Yes, Ellis has a professional knowledge of the 49 CFR 190-194 regulations 2 2 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 Evaluator Notes: C4. Yes, 12/29/11 letter, & 2/27/12 response. All 4 issues were responded to 2 2 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 (A3) 2 2 Yes = 2 No = 0 Evaluator Notes: C5. Yes, in-state in May, 2008, & also with Oregon at Portland in June, 2009. A Training Seminar has been scheduled in November of 2012 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: C6. Yes, most Units are inspected yearly. OQ & IMP for all 3 operators were re-inspected in 2011 & the first third of 2012. Damage Prevention is part of Std Insp. PAPEI was done in 2012 for all 3 operators DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 7#

ID NG Program Evaluation, 2011, page 87 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: C7. Yes, Idaho uses the federal forms. A check of OQ, IMP, and Standard inspections showed the reports to be complete. U, NA, and NC items were explained. I also observed that the inspection reports are consistent with the NOPV letters. 8 Did the state review operator procedures for determining if exposed cast iron pipe was examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Chapter 5.1 (B7) Yes = 1 No = 0 Evaluator Notes: C8. NA no cast iron in Idaho and they never had any. 1 NA 9 Did the state review operator procedures for surveillance of cast iron pipelines, including appropriate action resulting from tracking circumferential cracking failures, study of leakage history, or other unusual operating maintenance condition? (Note: See GPTC Appendix G-18 for guidance) (NTSB) Chapter 5.1 (B8) Yes = 1 No = 0 Evaluator Notes: C9. NA no cast iron in Idaho and they never had any. 1 NA 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: C10. Yes. Effective October, 2010 they created an addendum sheet and placed these questions on it. The addendum sheet is attached to Standard Inspections. 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 (B10,E5) Yes = 1 No = 0 Evaluator Notes: C11. Yes, by reviewing the operator's annual reports and then asking the operators to explain during the headquarters audit for each Operator each year. In addition work and repair tickets are used to ensure failure analysis is done. 12 Has the state reviewed Operator Annual reports, along with Incident/Accident reports, for accuracy and analyzed data for trends and operator issues? Data Initiative (G6-9,G16) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: C12. Yes, annual report reviews are done every year in March or April during Headquarters audits. Some of the data trends monitored are for increase in corrosion, damages, leaks, etc. Such review of Avista caused them to create a riser replacement program that was started in 4th Qtr 2009. Avista replaced 40 risers in 2009, 36 in 2010, & additional risers in 2011. This is now an established replacement program. Incident reports are reviewed for completeness, probable cause, final report, timeliness, & necessary procedural changes. IPUC generates a Qtrly report that is compiled by Bud and Ellis. This results in a consensus evaluation of the effectiveness of their program, and is the major tool for planning the next year's work. Reports are received, follow up is made, paperwork is checked, lessons learned are derived, Incident causes and regulatory compliance are determined, and site visit reports are reviewed. Operators are encouraged to share lessons learned. Inspector duties are outlined in POP & POP 6.6 specifically. Operator data is also reviewed per a supplemental question during Standard Inspections. DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 8#

ID NG Program Evaluation, 2011, page 913 Did state input all applicable OQ, IMP inspection results into federal database in a timely 2 2 manner? This includes replies to Operator notifications into IMDB database. Chapter 5.1 (G10-12) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: C13. Yes. The OQ & IMP databases were reviewed and the re-inspections have been done and they, along with the OQ Protocol 9 inspections, have all been uploaded into the databases 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: C14. Yes, this is addressed during the annual Headquarters audits of the two Operators with transmission lines. There are no recent or planned changes to transmission lines in ID. Effective October, 2010 they created an addendum sheet and placed this question on it. The addendum sheet is attached to Standard Inspections 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 (I1-3) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: C15. Yes, D&A is addressed during every HQ inspection. There was one positive test in 2008, none in 2009, 2010, 2011, & one so far in 2012. Operator procedures were followed. This question is asked verbally when using the short form. It is on the long form and the long form is mostly used during HQ inspections. 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 (I4-7) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: C16. Yes. OQ re-inspections were done for all 3 operators in 2011 & first third 2012. In addition Protocol 9 inspections are done with most Unit inspections. The Federal form is used and uploaded into the IMDB 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: C17. Yes. TIMP re-inspections were done on both transmission operators in Nov & Dec 2011. Some IMP related questions are also asked during every HQ inspection. 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 Info Only = No Points Evaluator Notes: Info Only Info Only C18. Yes. Work is in progress. All three operators are scheduled for DIMP inspections during 2nd half of 2012. 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: DUNS: 102589939 2011 Natural Gas State Program Evaluation 2 2 Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 9#

ID NG Program Evaluation, 2011, page 10C19. Yes. All three operators had PAPEI during the first third of 2012. 40 violations or guidance items have been identified. IPUC personnel observe that the PAPEI guidance material is better than the protocol material. 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: C20. Yes. Ellis meets regularly with the Idaho Utility Coordinating Council. They, as part of the IUCC, communicate with operators, excavators, other underground utilities, and the public at their meetings. In addition the IPUC has hosted it own meetings with participation of the various stakeholders. IPUC shares enforcement data access information with the public on their PUC website. In addition all finalized records can be requested through FOIA. 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: C21. NA no SRCR in 2009, 2010, 2011, or to date 2012 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: C22. Yes. This is addressed in the operator annual reports. In addition, this is addressed during the annual Headquarters audits. Effective October, 2010 IPUC created an addendum sheet and placed this question on it. The addendum sheet is attached to Standard Inspections. 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: C23. Yes. IPUC works with NAPSR, NARUC, T&Q, NTSB, & PHMSA, and responds to all surveys. 1 1 24 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: C24 IPUC attempted to utilize other State existing database systems to no success. They are now looking forward to using the Federal IA Program. IPUC participated in all surveys or information requests from NAPSR or PHMSA. IPUC was successful in applying for and receiving a $100,000 'State Damage Prevention Program' grant through PHMSA for improving element 3, Public Education, and element 5, Stakeholder Involvement and Education. Specifically 60% of the grant will be used to establish Stakeholder chapters in each county where the stakeholders will meet to discuss work projects that may impact underground facilities. Most of the rest will be used to present CGA safety notices through local and state wide media outlets. IPUC Pipeline Safety Division has increased their construction inspection activity. Immediate benefits included intervention to stop excavation at an improperly marked site, identification of problems with mis-locates, and stopping the excavations of non-certified excavators. PAPEI Inspections have been done on all three operators The IPUC now uses the DOT 3.1.11 long form for Operator Drug and Alcohol Misuse Program inspections for covered pipeline personnel. Idaho Operators are D & A inspected frequently, (almost annually), to ensure compliance with the Department of Transportation drug-free workplace policies. Results of these inspections are documented on the Department of Transportation's Substance Abuse Program forms and coordinated with the Office of Substance Abuse, Investigations and Compliance. OQ re-inspections have been done on all three operators. DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 10#

ID NG Program Evaluation, 2011, page 11TIMP re-inspections have been done on both transmission operators. DIMP inspections are scheduled in 2012 for all three operators. Total points scored for this section: 41 Total possible points for this section: 41 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 11#

ID NG Program Evaluation, 2011, 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 (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: D1. Yes. See POP 1.6, 5.6, & 5.7 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 Evaluator Notes: D2. Yes. NOPV are documented and consistent with the inspection results. NOPV are sent to company VPs. Procedures are in place, see POP 1.6 & 5.7. Final resolutions are documented and placed in the appropriate file. 3 Did the state issue compliance actions for all probable violations discovered? (B15) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: D3. Yes, The NOPV is consistent with the inspection results. Procedures are in place, see POP 1.6 & 5.7 2 2 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: D4. Yes, due process is afforded to all. In 2011 there were no formal actions. It is an available process, but is rarely needed (Show Cause Hearing). Most Operators are cooperative. Even fines are seldom necessary. See POP 1.6 & 5.7. Per POP, it includes notices, response times, dispute opportunity, & show cause hearings. 5 Is the program manager familiar with state process for imposing civil penalties? Were civil penalties considered for repeat violations (with severity consideration) or violations resulting in incidents/accidents? (describe any actions taken) (B27) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: 2 2 D5. Yes, Ellis is quite familiar with IPUC rules and procedures. See POP 1.6 & 5.7 6 Can the State demonstrate it is using their enforcement fining authority for pipeline safety Info Only Info Only violations? (new question) Info Only = No Points Evaluator Notes: D6. IPUC is fortunate in that all 3 operators have a strong commitment to pipeline safety. The operators are very responsive concerning corrective actions which negate the need for civil penalties. A clause for subjecting the operator to civil penalties if they fail to comply started being used in 2012. IPUC has NOT issued a civil penalty in the last 7 years. Per POP 1.6 a penalty can be recommended through a Decision Memo to the Commission, but one has not been requested in the last 7 years. The violations over the last 7 years have not posed an 'imminent danger to the public' and therefore civil penalties have not been assessed. I provided the IPUC with the clause PHMSA uses for subjecting the operator to civil penalties if they fail to comply with the regulations. 7 General Comments: Info Only Info Only DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 12#

ID NG Program Evaluation, 2011, page 13Info Only = No Points Evaluator Notes: D7. It is IPUC practice to inspect every Unit every year, and with few exceptions that practice is achieved. There is a high level of cooperation and shared goals between IPUC and operators to achieve and maintain safety in Idaho's pipeline systems. Total points scored for this section: 14 Total possible points for this section: 14 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 13#

ID NG Program Evaluation, 2011, page 14PART 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: E1. Yes. See POP 2.2, 6.0, & 6.2. Appendix E ? Federal/State Cooperation in Case of an Incident/Accident' is being followed. IPUC uses the Federal Incident form. The IPUC has a good understanding of the MOU between NTSB and DOT (PHMSA). All federally reportable incidents are investigated and a report is made 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: E2. Yes, see 3.15, 6.1, & 6.6. telephonic contact, and data (including emails and State Fire Marshall reports) is filed. Most incidents are responded to by the State Fire Marshall or local fire dept. 3 Were all incidents investigated, thoroughly documented, and with conclusions and 3 NA 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: E3. NA for 2011. There were no federally reportable incidents. 4 Did the state initiate compliance action for violations found during any incident/accident investigation? (D6) Yes = 1 No = 0 Evaluator Notes: 1 NA E4. NA for 2011. There were no federally reportable incidents. Procedures are in place, see POP 1.6 & 5.7. 5 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 (D7) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: E5. NA for 2011. This support of the PHMSA Western Region has been provided in the past. 1 NA 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 Evaluator Notes: E6. NA for 2011. Usually Yes per their state reports presented at the NAPSR WR Meetings. 1 NA 7 General Comments: Info Only = No Points DUNS: 102589939 2011 Natural Gas State Program Evaluation Info Only Info Only Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 14#

ID NG Program Evaluation, 2011, page 15Evaluator Notes: meters. E7. IPUC is committed to pipeline safety and maximizing lessons learned. Most incidents in Idaho are related to weather; snow, ice, roof slide offs, & one drunk on an icy road. U shaped shelters are starting to be installed over certain high risk Total points scored for this section: 3 Total possible points for this section: 3 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 15#

ID NG Program Evaluation, 2011, 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 (E1) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: F1. Yes, IPUC does this per POP 7.7. Effective October, 2010 they created an addendum sheet and placed this question on it. The addendum sheet is attached to Standard Inspections. 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: F2. Yes, it is in the Std Insp Form, under Damage Prevention. IPUC also checks the operator's 'Excavator Damage Report' for Avista, Intermountain Gas Co (IGC), and Questar. Effective October, 2010 they created an addendum sheet and placed this question on it. The addendum sheet is attached to Standard Inspections. 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: F3. Yes, the 3 operators, many other underground utilities, both One-Call centers, IPUC, and some excavators are members of CGA, however MEMBERSHIP IS NOT MANDITORY. Two of the 3 operators have adopted DIRT, and a third operator is moving to adopt DIRT. The IPUC is active in the CGA. The Idaho One-Call Law requires mandatory one-call membership for companies with underground facilities. The Idaho One-Call Law addresses many of the 9 elements within Damage Prevention of the 2006 PIPES Act, but enforcement has not been effectively addressed and mandatory excavator membership in One-Call is not required. IPUC is working to develop Effective civil penalties; most recently through the Idaho Coalition of Damage Prevention. Many members of CGA are active in this coalition and they are targeting effective legislation for a workable civil penalty 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: F4. Yes, per Digline Inc., Notifications and locates are by county, hits are reported by both county and operator. Hits per thousand is a calculated number. It is noted that this information is now required on the annual reports. Also have # calls and # damages in ID that can be disaggregated into more specific areas. DIRT started being used in 2009, and is addressed during every Headquarters audit. 5 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: F5. Damage Prevention is doing well with the exception of effective civil penalties. I reviewed with IPUC that an ANPRM for effective civil penalties is moving forward which will be used where effective civil penalties have not been developed at the State level. Total points scored for this section: 8 Total possible points for this section: 8 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 16#

ID NG Program Evaluation, 2011, 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: Avista Utilities, opid 31232 Name of State Inspector(s) Observed: Ellis Hire, Pipeline Program Manager/Inspector IPUC Location of Inspection: Sandpoint Dist. Office, Sandpoint, ID Date of Inspection: 6/18-19/12 Name of PHMSA Representative: Patrick Gaume Evaluator Notes: G1. Avista Utilities, opid 31232, Ellis Hire, Pipeline Program Manager/Inspector IPUC, Sandpoint Dist. Office, Sandpoint, ID, 6/18-19/12, Patrick Gaume. 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 G2. Yes, the Operator was notified in advance and they had up to 7 personnel participating in 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 Evaluator Notes: G3. Yes, Form 2, Standard Inspection Report of Gas Distribution Operator, Rev 05/06/11. 2 2 4 Did the inspector thoroughly document results of the inspection? (F4) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: G4. Yes, two days of field inspection were observed and the field notes were thorough. This was a follow up field inspection of a full standard inspection that was done earlier in 2012. The Field portion of the Inspection Form was completely filled out. 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: G5. Yes. Multi-meters, digital pressure gauges, half cells, clamp on amp meters, line locate equipment, hand tools, keys, locks, PPE, maps, communication devices 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: G6. Yes, This was a Field portion of a Std Insp of a Distr Unit DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 17#

ID NG Program Evaluation, 2011, page 187 Did the inspector have adequate knowledge of the pipeline safety program and regulations? (Evaluator will document reasons if unacceptable) (F8) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: G7. Yes, Ellis showed good & adequate knowledge of the pipeline safety program goals and regulations 2 2 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: G8. Yes. Avista was found to be in full compliance; No violations were found. Best Practices of meter shelters, emergency valve pavement markings, Their methods for tagging valves, the greasing of odorant valves to stop micro leaks, and the use of PEET valves for pressure gauge connection were noted and commented on 9 During the exit interview, did the inspector identify probable violations found during the 1 1 inspections? (if applicable) (F10) Yes = 1 No = 0 Evaluator Notes: G9. Yes. Avista was found to be in full compliance; No violations were found. Best Practices of meter shelters, emergency valve pavement markings, Their methods for tagging valves, the greasing of odorant valves to stop micro leaks, and the use of PEET valves for pressure gauge connection were noted and commented on 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 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 DUNS: 102589939 2011 Natural Gas State Program Evaluation Info Only Info Only Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 18#

ID NG Program Evaluation, 2011, page 19B. 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: Total points scored for this section: 12 Total possible points for this section: 12 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 19#

ID NG Program Evaluation, 2011, page 20PART H - Interstate Agent State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? (C1) 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"? (C2) 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? (C3) 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.) (C4) 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? (C5) 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? (C6) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: not an interstate agent 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? (C7) 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: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 20#

ID NG Program Evaluation, 2011, page 21PART I - 60106 Agreement State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? (B21) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 1 NA 2 Are results documented demonstrating inspection units were reviewed in accordance with state inspection plan? (B22) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 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.) (B23) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 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? (B24) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 1 NA 5 Did the state give written notice to PHMSA within 60 days of all probable violations found? (B25) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 1 NA 6 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? (B26) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. 1 NA 7 General Comments: Info Only = No Points Evaluator Notes: NA, not a 60106 partner. IPUC is a 60105 partner. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 102589939 2011 Natural Gas State Program Evaluation Idaho IDAHO PUBLIC UTILITIES COMMISSION, Page: 21#