# 2009 NV NG Program Evaluation - nv2009ngprogramevaluation (Nevada; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA nv2009ngprogramevaluation
- **title:** 2009 NV NG Program Evaluation - nv2009ngprogramevaluation (Nevada; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2009-01-01
- **effective on:** Not available
- **summary:** 2009 PHMSA natural gas program evaluation for Nevada.
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- **source url:** https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/subdoc/1086/nv2009ngprogramevaluation.pdf
**body:**

1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2009 Natural Gas State Program Evaluation for PUBLIC UTILITIES COMMISSION NEVADA Document Legend PART: O -- Representative Date and Title Information A -- General Program Qualifications B -- Inspections and Compliance - Procedures/Records/Performance C -- Interstate Agent States D -- Incident Investigations E -- Damage Prevention Initiatives F -- Field Inspection G -- PHMSA Initiatives - Strategic Plan H -- Miscellaneous I -- Program Initiatives DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 1

2009 Natural Gas State Program Evaluation -- CY 2009 Natural Gas State Agency: Nevada Rating: Agency Status: Date of Visit: 10/18/2010 - 10/20/2010 Agency Representative: Clark Stoner, Program Manager PHMSA Representative: Rex Evans Commission Chairman to whom follow up letter is to be sent: Name/Title: Mr. Sam Thompson, Chairman Agency: Public Utilities Commision of Nevada Address: 150 East William St. City/State/Zip: Carson City, NV 89701 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 2009 (not the status of performance at the time of the evaluation). All items for which criteria have not been established should be answered based on the PHMSA representative's judgment. A deficiency in any one part of a multiple part question should be scored as needs improvement. Determine the answer to the question then select the appropriate point value. If a state receives less then the maximum points, include a brief explanation in the space provided for general comments/regional observations. If a question is not applicable to a state, select NA. Please ensure all responses are COMPLETE and ACCURATE, and OBJECTIVELY reflect state program performance. Increasing emphasis is being placed on performance. This evaluation together with selected factors reported in the state's annual certification/agreement attachments provide the basis for determining the state's pipeline safety grant allocation. Field Inspection (PART F): The field inspection form used will allow different areas of emphasis to be considered for each question. Question 13 is provided for scoring field observation areas. In completing PART F, the PHMSA representative should include a written summary which thoroughly documents the inspection. Scoring Summary PARTS Possible Points Points Scored A General Program Qualifications 26 25 B Inspections and Compliance - Procedures/Records/Performance 22.5 22 C Interstate Agent States 0 0 D Incident Investigations 7 7 E Damage Prevention Initiatives 9 9 F Field Inspection 11 11 G PHMSA Initiatives - Strategic Plan 9.5 9.5 H Miscellaneous 3 3 I Program Initiatives 9 9 TOTALS 97 95.5 State Rating................................................................................................................................................... 98.5 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 2

PART A - General Program Qualifications Points(MAX) Score 8 7 1 Did the state submit complete and accurate information on the attachments to its most current 60105(a) Certification/60106 (a) Agreement? (NOTE: PHMSA Representative to verify certification/agreement attachments by reviewing appropriate state documentation. Score a deficiency in any one area as "needs improvement". Attachment numbers appear in parenthesis) Previous Question A.1, Items a-h worth 1 point each Yes = 8 No = 0 Needs Minor Improvement = 3-7 Needs Major Improvement = 2 a. State Jurisdiction and agent status over gas facilities (1) b. Total state inspection activity (2) c. Gas facilities subject to state safety jurisdiction (3) d. Gas pipeline incidents (4) e. State compliance actions (5) f. State record maintenance and reporting (6) g. State employees directly involved in the gas pipeline safety program (7) h. State compliance with Federal requirements (8) SLR Notes: SWG incident 1/8/2009 was not listed on certification. Reviewed Telephonic reports in FedSTAR and process to make sure all incidents are accounted for. Investigation was completed but not listed on certifications. Non-compliance for Dayton Mobile Home park was also not documented on compliance action. 2 Did the state have an adequate mechanism to receive operator reporting of incidents to ensure state compliance with 60105(a) Certification/60106(a) Agreement requirements (fatality, injury requiring hospitalization, property damage exceeding $50,000 - Mechanism should include receiving "after hours" reports)? (Chapter 6) Previous Question A.2 Yes = 1 No = 0 SLR Notes: Nevada statute NAC 704.230, anything over $5000. After hours call list distributed to operators 1 1 3 Has the state held a pipeline safety TQ seminar(s) in the last 3 years? (NOTE: Indicate date of last seminar or if state requested seminar, but T&Q could not provide, indicate date of state request for seminar. Seminars must be held at least once every 3 calendar years.) (Chapter 8.5) Previous Question A.4 Yes = 2 No = 0 SLR Notes: Last TQ seminar was in July 2009 2 2 4 Were pipeline safety program files well-organized and accessible?(NOTE: This also includes electronic files) (Chapter 5) Previous Question A.5 Yes = 1 No = 0 1 1 SLR Notes: place or the other. Discussed electronic vs paper files. They are migrating to all electronic, advised that when all go to electronic to make sure files are complete and in one 5 Did state records and discussions with the state pipeline safety program manager indicate adequate knowledge of PHMSA program and regulations? (Chapter 4.1, Chapter 8.1) Previous Question A.6 Yes = 2 No = 0 Needs Improvement = 1 SLR Notes: No issues 2 2 6 Did the state respond in writing within 60 days to the requested items in the Chairman's letter following the Region's last program evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8 Yes = 1 No = 0 SLR Notes: Letter was dated 2-2-10. 1 1 7 What actions, if necessary, did the State initiate as a result of issues raised in the Chairperson's letter from the previous year? Did actions correct or address deficiencies from previous year's evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8/A.9 Yes = 1 No = 0 DUNS: 878878743 2009 Natural Gas State Program Evaluation 1 1 Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 3

SLR Notes: Yes, they added information to procedures on on-site training as requested. Personnel and Qualifications 8 Has each inspector fulfilled the 3 year TQ training requirement? If No, has the state been granted a waiver regarding TQ courses by the Associate Administrator for Pipeline Safety? (NOTE: If the State has new inspectors who have not attended all TQ courses, but are in a program which will achieve the completion of all applicable courses within 3 years of taking first course (5 years to sucessfully complete), or if a waiver has been granted by the applicable Region Director for the state, please answer yes.) (Chapter 4.4) Previous Question A.10 Yes = 3 No = 0 SLR Notes: All have completed minimum 3 3 9 Brief Description of Non-TQ training Activities: Info Only = No Points For State Personnel: Info Only Info Only For Operators: Damage prevention training at NRCGA For Non-Operator Entities/Parties, Information Dissemination, Public Meetings: Other locating and damage prevention training through NRCGA SLR Notes: 10 Did the lead inspectors complete all required T&Q OQ courses and Computer Based Training (CBT) before conducting OQ Inspections? (Chapter 4.4.1) Previous Question A.12 Yes = 1 No = 0 1 1 SLR Notes: OQ seminar. Clark and Jason have completed. Darryl has retired. Recommended all inspectors need to complete OQ CBT at a minimum and recommend checking out 11 Did the lead inspectors complete all required TQ Integrity Management (IMP) Courses/Seminars and CBT before conducting IMP Inspections? (Chapter 4.4.1) Previous Question A.13 Yes = 1 No = 0 SLR Notes: Clark has completed all IMP training. I recommend having remainder of staff complete IMP training as soon as practical. 1 1 12 Was the ratio acceptable of Total inspection Person-days to Total Person-days charged to the program by state inspectors? (Region Director may modify points for just cause) (Chapter 4.3) Previous Question B.12 Yes = 5 No = 0 A. Total Inspection Person Days (Attachment 2): 802.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 5.75 = 1265.00 Ratio: A / B 802.00 / 1265.00 = 0.63 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 SLR Notes: No issues 5 5 13 SLR Notes: DUNS: 878878743 2009 Natural Gas State Program Evaluation Have there been modifications or proposed changes to inspector-staffing levels? (If yes, describe) Previous Info Only Info Only Question B.13 Info Only = No Points Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 4

Darryl has retired. They are looking to replace him at Las Vegas office. Reviewed staffing formula which works out to 3. 14 Part-A General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Total points scored for this section: 25 Total possible points for this section: 26 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 5

PART B - Inspections and Compliance - Procedures/Records/ Performance Points(MAX) Score Inspection Procedures 1 Does the State have a written inspection plan to complete the following? (all types of operators including LNG) 6.5 6.5 (Chapter 5.1) Previous Question B.1 + Chapter 5 Changes + Incorporate LNG Yes = 6.5 No = 0 Needs Improvement = 50% Deduction a Standard Inspections (Including LNG) (Max points = 2) b IMP Inspections (Including DIMP) (Max points = .5) c OQ Inspections (Max points = .5) d Damage Prevention (Max points = .5) e On-Site Operator Training (Max points = .5) f Construction Inspections (Max points = .5) g Incident/Accident Investigations (Max points = 1) h Compliance Follow-up (Max points = 1) Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement SLR Notes: Recommend expansion of IMP procedures. They have new database they are migrating to. On-site training procedure was added per 2009 evaluation. 2 Did the written Procedures for selecting operators adequately address key concerns? (Chapter 5.1) Previous 2 2 Question B.2, items a-d are worth .5 point each Yes = 2 No = 0 Needs Improvement = 50% Deduction a Length of time since last inspection Yes No Needs Improvement b History of Operator/unit and/or location (including leakage , incident and compliance history) Yes No Needs Improvement c Type of activity being undertaken by operator (construction etc) Yes No Needs Improvement d For large operators, rotation of locations inspected Yes No Needs Improvement SLR Notes: Section 6.3. They have limited number of operators. SWG and NV Power make up almost all of their mileage. Inspection Performance 3 Did the state inspect all types of operators and inspection units in accordance with time intervals established in its written procedures? (Chapter 5.1) Previous Question B.3 Yes = 2 No = 0 SLR Notes: They indicate they will inspect every other year. They are in Las Vegas and on SWG properties virtually every day. 2 2 4 Did the state inspection form cover all applicable code requirements addressed on the Federal Inspection forms? (Chapter 5.1 (3)) Previous Question B.4 Yes = 1 No = 0 SLR Notes: They use PHMSA form 2 and other PHMSA forms. 1 1 5 Did state complete all applicable portions of inspection forms? (Chapter 5.1 (3)) Previous Question B.5 Yes = 1 No = 0 SLR Notes: Review of inspection form indicated they did thorough review 1 1 6 Did the state initiate appropriate follow-up actions to Safety Related Condition Reports? (Chapter 6.3) Previous Question B.6 Yes = .5 No = 0 SLR Notes: None - NA DUNS: 878878743 2009 Natural Gas State Program Evaluation .5 NA Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 6

7 Did the state review operator procedures for determining if exposed cast iron pipe was examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Previous Question B.7 Yes = .5 No = 0 SLR Notes: Records indicate no known Cast Iron in state. NA .5 NA 8 Did the state review operator procedures for surveillance of cast iron pipelines, including appropriate action resulting from tracking circumferential cracking failures, study of leakage history, or other unusual operating maintenance condition? (Note: See GPTC Appendix G-18 for guidance) (NTSB) Previous Question B.8 Yes = .5 No = 0 SLR Notes: Records indicate no known Cast Iron in state. NA .5 NA 9 Did the state review operator emergency response procedures for leaks caused by excavation damage near buildings and determine whether the procedures adequately address the possibility of multiple leaks and underground migration of gas into nearby buildings Refer to 4/12/01 letter from PHMSA in response to NTSB recommendation P-00-20 and P-00-21? (NTSB) Previous Question B.9 Yes = .5 No = 0 SLR Notes: They indicated SWG and SPP both have procedures. I discussed this and recommended this be added to checklist for operators. .5 .5 10 Did the state review operator records of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617? (NTSB) Previous Question B.10 Yes = 1 No = 0 SLR Notes: They indicated SWG and SPP both have procedures. I discussed this and recommended this be added to checklist for operators. 1 1 11 SLR Notes: Compliance - 60105(a) States Did the state adequately document sufficient information on probable violations? (Chapter 5.2) Previous Question B.14 Yes = 1 No = 0 Needs Improvement = .5 1 1 12 Does the state have written procedures to identify the steps to be taken from the discovery to the resolution of a probable violation as specified in the "Guidelines for State Participating in the Pipeline Safety Program"? (Chapter 5.1) Previous Question D(1).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Procedures manual ok - no issues 1 1 13 SLR Notes: Does the state have written procedures to notify an operator when a noncompliance is identified as specified in the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(4)) Previous Question D (1).2 Yes = 1 No = 0 Needs Improvement = .5 1 1 14 Does the state have a written procedure for routinely reviewing the progress of compliance actions to prevent delays or breakdowns of the enforcement process, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(5)) Previous Question D(1).3 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Their enforcement process is formal and docketed. 1 1 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 7

15 Has the State issued compliance actions for all probable violations discovered? (Note : PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation) Previous Question D(1).4 Yes = 1 No = 0 SLR Notes: No issues, compliance action started on Dayton MHP see below 1 1 16 SLR Notes: Did the state follow its written procedures for reviewing compliance actions and follow-up to determine that prompt corrective actions were taken by operators, within the time frames established by the procedures and compliance correspondence, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? Previous Question D(1).5 Yes = 1 No = 0 Needs Improvement = .5 1 1 17 SLR Notes: NA If compliance could not be established by other means, did state pipeline safety program staff request formal action, such as a "Show Cause Hearing" to correct pipeline safety violations? (check each states enforcement procedures) Previous Question D(1).6 No = 0 Yes = 1 1 NA 18 Did the state adequately document the resolution of probable violations? (Chapter 5.1 (6)) Previous Question 1 .5 D(1).7 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: In review of files, it was discovered non-compliance was found on Dayton Mobile Home park. This is LPG with about 23 customers. Letters sent to operator, but file was not clear on documentation and follow-up of resolution to the non-compliance. Follow-up is needed with this operator. 19 SLR Notes: Were compliance actions sent to a company officer? (manager or board member if municipal/government system) (Chapter 5.1(4)) Previous Question D(1).8 Yes = .5 No = 0 .5 .5 20 SLR Notes: Did the compliance proceedings give reasonable due process to all parties? (check each states enforcement procedures) Previous Question D(1).9 Yes = 1 No = 0 Needs Improvement = .5 1 1 Compliance - 60106(a) States 21 Did the state use the current federal inspection form(s)? Previous Question D(2).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: 1 NA 22 SLR Notes: Are results adequately documented demonstrating inspection units were reviewed in accordance with state inspection plan? Previous Question D(2).2 Yes = 1 No = 0 Needs Improvement = .5 1 NA 23 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(2).3 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: DUNS: 878878743 2009 Natural Gas State Program Evaluation 1 NA Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 8

24 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Previous Question D(2).4 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 25 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(2).5 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 26 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? Previous Question D(2).6 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 27 Part B: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Total points scored for this section: 22 Total possible points for this section: 22.5 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 9

PART C - Interstate Agent States Points(MAX) Score 1 Did the state use the current federal inspection form(s)? Previous Question D(3).1 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 2 Are results documented demonstrating inspection units were reviewed in accordance with "PHMSA directed inspection plan"? Previous Question D(3).2 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 3 Did the state submit documentation of the inspections within 60 days as stated in its latest Interstate Agent Agreement form? Previous Question D(3).3 Yes = 1 No = 0 1 NA SLR Notes: 4 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(3).4 Yes = 1 No = 0 1 NA SLR Notes: 5 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Previous Question D(3).5 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 6 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(3).6 Yes = 1 No = 0 SLR Notes: 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? Previous Question D(3).7 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 8 Part C: General Comments/Regional Observations Info Only = No Points SLR Notes: Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 10

PART D - Incident Investigations Points(MAX) Score 1 Are state personnel following the procedures for Federal/State cooperation in case of an incident? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6.1) Previous Question E.1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: There are no issues with this 1 1 2 Are state personnel familiar with the jurisdictional authority and Memorandum of Understanding between NTSB and PHMSA? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6 ? Appendix D) Previous Question E.2 Yes = .5 No = 0 SLR Notes: .5 .5 3 Did the state keep adequate records of incident notifications received? Previous Question E.3 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: They have $5k reporting level and leave annual open docket for all these 1 1 4 If an onsite investigation of an incident was not made, did the state obtain sufficient information by other means to determine the facts and support the decision not to go on-site? Previous Question E.4 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: No issues 1 1 5 Were investigations thorough and conclusions and recommendations documented in an acceptable manner? Previous Question E.5, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Observations and Document Review b. Contributing Factors c. Recommendations to prevent recurrences where appropriate SLR Notes: Reviewed previous incident reports. They are very thoroughly conducted and documented. No issues 2 2 Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement 6 Did the state initiate enforcement action for violations found during any incident investigation(s)? Previous Question E.6 Variation Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: This relates to January 2009 incident. Violation was regarding one-call law. 1 1 7 Did the state assist region office by taking appropriate follow-up actions related to the operator incident reports to ensure accuracy and final report has been received by PHMSA? (validate annual report data from operators concerning incidents/accidents and investigate discrepancies) (Chapter 6) Previous Question E.7/E.8 Yes = .5 No = 0 SLR Notes: No issues .5 0.5 8 Part D: General Comments/Regional Observations Info Only = No Points SLR Notes: Info Only Info Only DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 11

Total points scored for this section: 7 Total possible points for this section: 7 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 12

PART E - Damage Prevention Initiatives Points(MAX) Score 1 Has the state reviewed directional drilling/boring procedures of each pipeline operator or its contractor to determine if they include actions to protect their facilities from the dangers posed by drilling and other trench less technologies? Previous Question B.11 Yes = 2 No = 0 Needs Improvement = 1 2 2 SLR Notes: they have noted procedures reviewed for SWG and SPP, recommend this also be put on checklist 2 Did the state inspector check to assure the pipeline operator is following its written procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? New 2008 Yes = 2 No = 0 2 2 SLR Notes: They have been doing this for several years. No issues 3 Did the state encourage and promote the adoption of the Common Ground Alliance Best Practices document to its regulated companies as a means of reducing damages to all underground facilities? Previous Question A.7 Yes = 2 No = 0 Needs Improvement = 1 2 2 SLR Notes: Active in NRCGA. No issues 4 Has the agency or another organization within the state collected data and evaluated trends on the number of pipeline damages per 1,000 locate requests? New 2008 Yes = 1 No = 0 1 1 SLR Notes: They collect and reported this data. 5 Did the state review operators' records of accidents and failures due to excavation damage to ensure causes of failure are addressed to minimize the possibility of recurrence as required by 192.617? Yes = 2 No = 0 2 2 SLR Notes: All damages reviewed. No issues. Very active in this area 6 Part E: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 13

PART F - Field Inspection Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only = No Points Name of Operator Inspected: Southwest Gas Corporation Northern Division Name of State Inspector(s) Observed: Jason Dunphy Location of Inspection: SWG Office, 400 Eagle Station Lane, Carson City, NV Date of Inspection: October 20, 2010 Name of PHMSA Representative: Rex Evans Info Only Info Only SLR Notes: 2 Was the operator or operator's representative notified and/or given the opportunity to be present during inspection? New 2008 Yes = 1 No = 0 SLR Notes: Operator in attendance 1 1 3 Did the inspector use an acceptable inspection form/checklist and was the form/checklist used as a guide for the inspection? (New regulations shall be incorporated) Previous Question F.2 Yes = 2 No = 0 SLR Notes: Yes, checklist completed on computer during office visit 2 2 4 Did the inspector thoroughly document results of the inspection? Previous Question F.3 Yes = 2 No = 0 SLR Notes: Yes, no issues 2 2 5 Did the inspector check to see if the operator had necessary equipment during inspection to conduct tasks viewed? (Maps, pyrometer, soap spray, CGI, etc.) New 2008 Yes = 1 No = 0 1 1 SLR Notes: 6 What type of inspection(s) did the state inspector conduct during the field portion of the state evaluation? (i.e. Standard, Construction, IMP, etc) New 2008 Info Only = No Points SLR Notes: A Standard inspection of SWG Records was conducted along with field observation of regulator station maintenance. Info Only Info Only 7 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) New 2008, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Procedures b. Records c. Field Activities/Facilities d. Other (Please Comment) 2 2 SLR Notes: DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 14

No issues 8 Did the inspector have adequate knowledge of the pipeline safety program and regulations? (Liaison will document reasons if unacceptable) Previous Question F.8 Yes = 2 No = 0 SLR Notes: Yes 2 2 9 Did the inspector conduct an exit interview? (If inspection is not totally complete the interview should be based on areas covered during time of field evaluation) Previous Question F.10 Yes = 1 No = 0 SLR Notes: No issues 1 1 10 During the exit interview, did the inspector identify probable violations found during the inspections? Previous Question F.11 Yes = 1 No = 0 SLR Notes: No compliance actions found 1 NA 11 What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) Info Only = No Points SLR Notes: Field inspection of regulator station maintenance, valve operation and CP status at station Info Only Info Only 12 SLR Notes: Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) Info Only = No Points Info Only Info Only 13 Field Observation Areas Observed (check all that apply) Info Only = No Points a. Abandonment b. Abnormal Operations c. Break-Out Tanks d. Compressor or Pump Stations e. Change in Class Location f. Casings g. Cathodic Protection h. Cast-iron Replacement i. Damage Prevention j. Deactivation k. Emergency Procedures l. Inspection of Right-of-Way m. Line Markers n. Liaison with Public Officials o. Leak Surveys p. MOP q. MAOP r. Moving Pipe s. New Construction t. Navigable Waterway Crossings DUNS: 878878743 2009 Natural Gas State Program Evaluation Info Only Info Only Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 15

u. Odorization v. Overpressure Safety Devices w. Plastic Pipe Installation x. Public Education y. Purging z. Prevention of Accidental Ignition A. Repairs B. Signs C. Tapping D. Valve Maintenance E. Vault Maintenance F. Welding G. OQ - Operator Qualification H. Compliance Follow-up I. Atmospheric Corrosion J. Other SLR Notes: 14 Part F: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Overall good job of record review and field observation of regulator station maintenance. They examined records of CY2008-CY2009 maintenance activities of the Northern Nevada Division. Records reviewed included leak surveys,valves, CP, patrols, odorization, leaks, etc. No issues Total points scored for this section: 11 Total possible points for this section: 11 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 16

PART G - PHMSA Initiatives - Strategic Plan Points(MAX) Score Risk base Inspections - Targeting High Risk Areas 1 Does state have process to identify high risk inspection units? Yes = 1.5 No = 0 Risk Factors (criteria) to consider may include: Miles of HCA's, Geographic area, Population Density Length of time since last inspection History of Individual Operator units (leakage, incident and compliance history, etc.) Threats - (Excavation Damage, Corrosion, Natural Forces, Other Outside Forces, Material or Welds, Equipment, Operations, Other) SLR Notes: Process is in procedures. The two operators they have, they have analysis on problem areas and emphasize inspections appropriately. 1.5 1.5 2 Are inspection units broken down appropriately? (see definitions in Guidelines) Yes = .5 No = 0 .5 0.5 SLR Notes: Had brief discussion that they were best able to determine this based on operations of the companies they inspect. Again, for the most part they have two operators that make up 99% of everything they do. No issues 3 Consideration of operators DIMP Plan? (if available and pending rulemaking) Info Only = No Points SLR Notes: The do leak analysis and have good foundation for analyzing DIMP Info Only Info Only 4 Does state inspection process target high risk areas? Yes = .5 No = 0 SLR Notes: See previous. No issues in this area. They do a good job targeting high risk areas, such as PVC and Damage Prevention areas. .5 0.5 Use of Data to Help Drive Program Priority and Inspections 5 Does state use data to analyze effectiveness of damage prevention efforts in the state? (DIRT or other data, etc) Yes = .5 No = 0 SLR Notes: Very involved in NRCGA. Ken Jones does a great deal of analysis which was shared during review. .5 0.5 6 Has state reviewed data on Operator Annual reports for accuracy? Yes = .5 No = 0 SLR Notes: Again, Ken Jones showed annual report analysis for past several years. No issues .5 0.5 7 Has state analyzed annual report data for trends and operator issues? Yes = .5 No = 0 SLR Notes: Yes, along with previous question data is analyzed .5 0.5 8 Has state reviewed data on Incident/Accident reports for accuracy? Yes = .5 No = 0 SLR Notes: Yes, they also review $5000 reports per their state law .5 0.5 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 17

9 Does state do evaluation of effectiveness of program based on data? (i.e. performance measures, trends, etc.) Yes = .5 No = 0 SLR Notes: Yes, they do a great deal of analysis and show data trends. .5 0.5 10 Did the State input all operator qualification inspection results into web based database provided by PHMSA in a timely manner upon completion of OQ inspections? Previous Question B.15 Yes = .5 No = 0 SLR Notes: No issues, Protocol 9 has been uploaded frequently .5 0.5 11 Did the State submit their replies into the Integrity Management Database (IMDB) in response to the Operators notifications for their integrity management program? Previous Question B.16 Yes = .5 No = 0 SLR Notes: Clark indicated no replies were requested. .5 NA 12 Have the IMP Federal Protocol forms been uploaded to the IMDB? Previous Question B.17 Yes = .5 No = 0 SLR Notes: Previously completed. some by Western Region .5 0.5 13 Did the State ask Operators to identify any plastic pipe and components that has shown a record of defects/leaks and what those operators are doing to mitigate the safety concerns? Previous Question B.18 Yes = .5 No = 0 SLR Notes: SWG and NV Energy both participate in PPDC .5 0.5 14 Has state confirmed transmission operators have submitted information into National Pipeline Mapping System (NPMS) database along with any changes made after original submission? Yes = .5 No = 0 SLR Notes: Per communicaition via email with both companies. .5 0.5 Accident/Incident Investigation Learning and Sharing Lessons Learned 15 Has state shared lessons learned from incidents/accidents? (i.e. NAPSR meetings and communications) Yes = .5 No = 0 SLR Notes: VIA Region mtgs, etc .5 0.5 16 Does the State support data gathering efforts concerning accidents? (Frequency/Consequence/etc) .5 0.5 Yes = .5 No = 0 SLR Notes: No issues 17 SLR Notes: Does state have incident/accident criteria for conducting root cause analysis? Info Only = No Points Info Only Info Only 18 Does state conduct root cause analysis on incidents/accidents in state? Info Only = No Points DUNS: 878878743 2009 Natural Gas State Program Evaluation Info Only Info Only Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 18

SLR Notes: 19 Has state participated on root cause analysis training? (can also be on wait list) Yes = .5 No = 0 .5 0.5 SLR Notes: Clark on waitlist, recommend other inspectors also taking course Transparency - Communication with Stakeholders 20 Other than pipeline safety seminar does State communicate with stakeholders? (Communicate program data, pub awareness, etc.) Yes = .5 No = 0 .5 0.5 SLR Notes: the communicate via local training. Heavy involvement in NRCGA. 21 Does state share enforcement data with public? (Website, newsletters, docket access, etc.) Yes = .5 No = 0 .5 0.5 SLR Notes: information is in public dockets and accessible. 22 Part G: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: They do a very good job in data analysis and examining their operator trends. Total points scored for this section: 9.5 Total possible points for this section: 9.5 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 19

PART H - Miscellaneous Points(MAX) Score 1 What were the major accomplishments for the year being evaluated? (Describe the accomplishments, NAPSR Activities and Participation, etc.) Yes = .5 No = 0 .5 0.5 SLR Notes: enforcement. The have developed a database for inspections and time. Hosted NAPSR region meeting. Many damage prevention program accomplishments with their 2 What legislative or program initiatives are taking place/planned in the state, past, present, and future? (Describe initiatives (i.e. damage prevention, jurisdiction/authority, compliance/administrative, etc.) Yes = .5 No = 0 .5 0.5 SLR Notes: in 2007 session they got Damage Prevention enforcement. Decreased mark zone from 30-24 inches.Ticket life 14-28 days. This time they are trying to get automatic adoption of Part 192 regs, and incident reporting that matches federal reporting limits. 3 Any Risk Reduction Accomplishments/Projects? (i.e. Cast iron replacement projects,bare steel,third-party damage reductions, etc.) Yes = .5 No = 0 .5 0.5 SLR Notes: PVC replacement projects from SWG, annual leak surveys, Black-wrap pipe replacement, and Damage Prevention Enforcement. 4 Did the state participate in/respond to surveys or information requests from NAPSR or PHMSA? Yes = 1 No = 0 1 1 SLR Notes: All ok 5 Sharing Best Practices with Other States - (General Program) Yes = .5 No = 0 .5 0.5 SLR Notes: 6 Part H: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Total points scored for this section: 3 Total possible points for this section: 3 DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 20

PART I - Program Initiatives Points(MAX) Score Drug and Alcohol Testing (49 CFR Part 199) 1 Has the state verified that operators have drug and alcohol testing programs? Yes = 1 No = 0 SLR Notes: Yes 1 1 2 Is the state verifying that operators are conducting the drug and alcohol tests required by the operators program (random, post-incident, etc.) Yes = .5 No = 0 SLR Notes: Yes .5 0.5 3 Is the state verifying that any positive tests are responded to in accordance with the operator's program? Yes = .5 No = 0 SLR Notes: Yes .5 0.5 Qualification of Pipeline Personnel (49 CFR Part 192 Subpart N) 4 Has the state verified that operators have a written qualification program? Yes = 1 No = 0 1 1 SLR Notes: again. Original HQ inspections done in 2004, they indicated field eval every two years. Suggested they look at possibly conducting full OQ program evaluations 5 Has the state reviewed operator qualification programs for compliance with PHMSA rules and protocols? Yes = .5 No = 0 SLR Notes: No issues .5 0.5 6 Is the state verifying that persons who perform covered tasks for the operator are qualified in accordance with the operator's program? Yes = .5 No = 0 SLR Notes: On inspections ok .5 0.5 7 Is the state verifying that persons who perform covered task for the operator are requalified at the intervals specified in the operator's program? Yes = .5 No = 0 SLR Notes: No issues, suggested full plan review to make sure no issues. They check cards on site or company records when viewing jobs. .5 0.5 Gas Transmission Pipeline Integrity Management (49 CFR Part 192 Subpart O) 8 Has the state verified that all operators with transmission pipelines have either adopted an integrity management program (IMP), or have properly determined that one is not required? Yes = 1 No = 0 1 1 SLR Notes: Yes, in CY2005 and CY2008. Peter Katchmar Western Region lead SWG 9 Has the state verified that in determining whether a plan is required, the operator correctly calculated the potential impact radii and properly applied the definition of a high consequence area? Yes = .5 No = 0 .5 0.5 SLR Notes: DUNS: 878878743 2009 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 21

Done as part of original IMP review 10 Has the state reviewed operator IMPs for compliance with Subpart O? (In accordance with State Inspection plan) Yes = .5 No = 0 SLR Notes: Yes, previously suggested they enhance state IMP procedures as a result of San Bruno issues. .5 0.5 11 Is the state monitoring operator progress on the inspections, tests and remedial actions required by the operator's IMP, including that they are being done in the manner and schedule called for in its IMP? Yes = .5 No = 0 SLR
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