2011 NV NG Program Evaluation - nv2011ngprogramevaluation (Nevada; Natural Gas State Program Evaluation)

NV 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 PUBLIC UTILITIES COMMISSION NEVADA 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: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 1#

NV NG Program Evaluation, 2011, page 22011 Natural Gas State Program Evaluation -- CY 2011 Natural Gas State Agency: Nevada Rating: Agency Status: 60105(a): Yes 60106(a): No Interstate Agent: No Date of Visit: 09/18/2012 - 09/20/2012 Agency Representative: Paul Maguire, Engineering Manager;Clark Stoner, Senior Engineer:Jason Dunphy, Neil Pascual, Ken Jones, PHMSA Representative: Rex Evans Commission Chairman to whom follow up letter is to be sent: Name/Title: Crystal Jackson, Executive Director Agency: Public Utilities Commission of Nevada Address: 1150 East William Street City/State/Zip: Carson City, NV 89701 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 9 B Program Inspection Procedures 15 15 C Program Performance 41 39 D Compliance Activities 14 14 E Incident Investigations 9 9 F Damage Prevention 8 8 G Field Inspections 11 9.5 H Interstate Agent State (If Applicable) 0 0 I 60106 Agreement State (If Applicable) 0 0 TOTALS 108 103.5 State Rating................................................................................................................................................... 95.8 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 2#

NV 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 Report Attachment 1 (A1a) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: 1 1 All appear accurate. Might have some additions to master meter, as on going investigation on a few places discovered. 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 (A1b) Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: Inspection days reviewed. Care needs to be taken to ensure damage prevention activities is coded correctly on time sheets. 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: No issues, again see A.1 about possible addition to this with some master meter units in future. 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: No issues during info review. 1 1 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 (A1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Review of compliance actions matched information reported. 1 1 6 Were pipeline program files well-organized and accessible? - Progress Report Attachment 6 (A1f, A4) Yes = 2 No = 0 Needs Improvement = 1 2 1 Evaluator Notes: This was issue during last evaluation and continued issue. No improvement. Inspection files mixed between electronic,paper and database. Staff member on board 10 months did not know how to access files. 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 (A1g) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Information appears accurate. They had attended Hazwoper locally. 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: Auto adoption of amendments. No issues. 1 1 9 List of Planned Performance - Did state describe accomplishments on Progress Report in detail - Progress Report Attachment 10 (H1-3) 1 1 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 3#

NV NG Program Evaluation, 2011, page 4Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Very detail, very good job. 10 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 9 Total possible points for this section: 10 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 4#

NV 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: Section 6 procedures, no issues. 2 2 2 IMP Inspections (including DIMP) (B1b) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Section 6 procedures, no issues. 3 OQ Inspections (B1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Section 6 procedures. 1 1 4 Damage Prevention Inspections (B1d) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Section 13 procedures. 5 On-Site Operator Training (B1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Section 5 Procedures. 1 1 6 Construction Inspections (B1f) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Section 11 Procedures. - 1 1 7 Incident/Accident Investigations (B1g) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Section 10 procedures. DUNS: 878878743 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 Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 5#

NV NG Program Evaluation, 2011, page 6Evaluator Notes: Recommend review of inspection units for SWG and NV Energy. Units may need broken down by operations area. 9 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 15 Total possible points for this section: 15 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 6#

NV 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): 774.60 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 4.79 = 1054.17 Ratio: A / B 774.60 / 1054.17 = 0.73 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: 774.6 days, .73 ratio, no issues 5 5 2 Has each inspector and program manager fulfilled the T Q Training Requirements? (See 5 4 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: Completed own Hazwoper training. OQ - Craig and Ken, and IMP Inspections Wayne - appear to be completed by individuals not fully trained. Recommend thorough review of Training tables again. 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: No issues 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: Letter received Jan 11, 2012. Deficiencies still outstanding on file organization. 2 1 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 (A3) Yes = 2 No = 0 Evaluator Notes: August 7-8, 2012 2 2 6 Did state inspect all types of operators and inspection units in accordance with time 5 5 intervals established in written procedures? Chapter 5.1 (B3) Yes = 5 No = 0 Needs Improvement = 1-4 Evaluator Notes: Inspection records reviewed appeared that all were inspected as required. SWG and NV Energy probably account for approx 99% of all service lines. DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 7#

NV NG Program Evaluation, 2011, page 87 Did inspection form(s) cover all applicable code requirements addressed on Federal Inspection form(s)? Did State complete all applicable portions of inspection forms? Chapter 5.1 (B4-5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: PUCN primarily uses PHMSA form 2, all areas appear covered. 2 2 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: None in state 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: None in state 1 NA 10 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) Chapter 5.1 (B9) Yes = 1 No = 0 1 1 Evaluator Notes: Per discussion, this appears to be covered. Recommend again that specific question be added to some checklist. 11 Did the state review operator records of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617? Chapter 5.1 (B10,E5) Yes = 1 No = 0 Evaluator Notes: 1 1 Per discussion, this appears to be covered. Recommend again that specific question be added to some checklist. 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 Evaluator Notes: Annual reports reviewed and kept in file. Ken has IMP Monster program where he does analysis. 2 2 13 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: These appear to be uploaded as necessary. There seemed to be a miscommunication as to if IMP database was available. Referred to Dorian Stansberry for technical issues. 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 DUNS: 878878743 2011 Natural Gas State Program Evaluation 1 1 Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 8#

NV NG Program Evaluation, 2011, page 9Evaluator Notes: Communication has been made via email to transmission operators regarding NPMS submission. No issues. 15 Is the state verifying operators are conducting drug and alcohol tests as required by regulations? This should include verifying positive tests are responded to in accordance with program. 49 CFR 199 (I1-3) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No issues per record review. 2 2 16 Is state verifying operators OQ programs are up to date? This should include verification of any plan updates and that persons performing covered tasks (including contractors) are properly qualified and requalified at intervals determined in the operators plan. 49 CFR 192 Part N (I4-7) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Complete program reviews conducted and uploaded in CY2011. No issues. 2 2 17 Is state verifying operator's gas transmission integrity management programs (IMP) are 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: 2 2 No issues, but recommend thorough review on an annual basis and make sure they have good documentation. 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: Program review in process - no issues. Info Only Info Only 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: Reviewed PA inspection plans for SWG and NV, Both had effectiveness inspections completed in CY2011 2 2 20 Does the state have a mechanism for communicating with stakeholders - other than state pipeline safety seminar? (This should include making enforcement cases available to public). (G20-21) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Website used for a lot of information. NRCGA also growing in use. 1 1 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: None reported. No issues. N/A 1 NA DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 9#

NV NG Program Evaluation, 2011, page 1022 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: SWG replacing PVC and Aldyl A per commission action. NV replacing PVC services. No issues, very active in this area. Estimates 500,000 feet of plastic replaced in past couple of year. 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: No issues. 1 1 24 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 39 Total possible points for this section: 41 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 10#

NV NG Program Evaluation, 2011, page 11PART 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: No issue with procedures 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: Compliance actions were reviewed, all probably violations appear to have been followed up on and resolution obtained as necessary. 3 Did the state issue compliance actions for all probable violations discovered? (B15) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Records reviewed appear to have compliance actions taken on issues discovered. 2 2 4 Did compliance actions give reasonable due process to all parties? Including "show cause" hearing if necessary. (B17, B20) Yes = 2 No = 0 Evaluator Notes: Due process given. no issues. 2 2 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 Yes, and in fact civil penalties issued. Good job in following through with compliance issues in last period. 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: Yes - see progress report 7 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 14 Total possible points for this section: 14 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 11#

NV NG Program Evaluation, 2011, page 12PART 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: No issues. 2 If onsite investigation was not made, did state obtain sufficient information from the 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: No issues. 1 1 3 Were all incidents investigated, thoroughly documented, and with conclusions and 3 3 recommendations? (D5) Yes = 3 No = 0 Needs Improvement = 1-2 a. Observations and document review Yes No Needs Improvement b. Contributing Factors Yes No Needs Improvement c. Recommendations to prevent recurrences when appropriate Yes No Needs Improvement Evaluator Notes: Two reportable incidents reviewed. 330 Monumental Circle with NV Energy. Eastern Ave and St. Rose Parkway with SWG. Incidents appear to have been thoroughly documented with conclusions and recommendations. 4 Did the state initiate compliance action for violations found during any incident/accident investigation? (D6) Yes = 1 No = 0 Evaluator Notes: 1 1 SWG incident at Eastern Avenue and St. Rose, NOPV issued for marking. Good job with follow-up and investigation. 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: No issues. 1 1 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: No issues. 1 1 7 General Comments: Info Only = No Points Evaluator Notes: DUNS: 878878743 2011 Natural Gas State Program Evaluation Info Only Info Only Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 12#

NV NG Program Evaluation, 2011, page 13Vast improvement since last evaluation. Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 13#

NV NG Program Evaluation, 2011, page 14PART 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: Per discussion, this appears to be covered. Recommend again that specific question be added to some checklist. Procedures in place for SWG and NV Energy. 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? (E2) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No issues, they spend a great deal of inspection time on this activity. 2 2 3 Did the state encourage and promote practices for reducing damages to all underground 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: No issues, active in NRCGA and all overall promotion of best practices. 2 2 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? (This can include DIRT and other data shared and reviewed by the pipeline safety program) (E4,G5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, they do a lot of data collection. No issues. 2 2 5 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 8 Total possible points for this section: 8 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 14#

NV NG Program Evaluation, 2011, page 15PART 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: Southwest Gas Corporation Name of State Inspector(s) Observed: Jason Dunphy, Clark Stoner, Neil Pasqual, Craig Rogers Location of Inspection: Northern Division Office, Carson City, NV And Las Vegas Division October Date of Inspection: September 19, 2012 and October 23-25, 2012 Name of PHMSA Representative: Rex Evans Evaluator Notes: Observed maintenance record review of SWG Northern Division on Sept 19, 2012, and Las Vegas Division Oct 23-25, 2012. Viewed leak survey of Paradise Spa Master meter, also reviewed replacement projects being conducted by Arizona Pipeline - contractor, primarily at Maycliff Mobile Home park. 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 Operator and representatives were present. Including Dana Williams in SWG Compliance and many others 3 Did the inspector use an appropriate inspection form/checklist and was the form/checklist used as a guide for the inspection? (New regulations shall be incorporated) (F3) Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: Appropriate portions of Form 2 were completed during Carson City, improvement needed during Las Vegas visit. PUCN has started using checklists, but further refinement is needed. 4 Did the inspector thoroughly document results of the inspection? (F4) 2 1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Need improvement in documenting inspection details. Details of relevant portions of Las Vegas inspection were not documented thoroughly. 5 Did the inspector check to see if the operator had necessary equipment during inspection 1 0.5 to conduct tasks viewed? (Maps,pyrometer,soap spray,CGI,etc.) (F5) Yes = 1 No = 0 Evaluator Notes: Carson city was office only review. Map was not used during leak survey of Paradise Spa leak survey, leak surveyor missed two buildings in the complex and none of three inspectors brought this to his attention. 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: DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 15#

NV NG Program Evaluation, 2011, page 16Maintenance Record review only. Field review appeared appropriate during Las Vegas portion, just issues with documentation of inspection as noted on previoius questions. 7 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: No issues. Recommend thorough evaluation of what is reviewed in field. 2 2 8 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) (F9) Yes = 1 No = 0 Evaluator Notes: No issues, ongoing projects 1 1 9 During the exit interview, did the inspector identify probable violations found during the inspections? (if applicable) (F10) Yes = 1 No = 0 Evaluator Notes: 1 NA 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 B. Signs Info Only Info Only DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 16#

NV NG Program Evaluation, 2011, page 17C. 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: 9.5 Total possible points for this section: 11 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 17#

NV NG Program Evaluation, 2011, page 18PART 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: 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: 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: 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: 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: 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: 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: 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: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 18#

NV NG Program Evaluation, 2011, page 19PART 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: 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: 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: 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 1 NA Evaluator Notes: 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: 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: 1 NA 7 General Comments: Info Only = No Points Evaluator Notes: Not an agreement state. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 878878743 2011 Natural Gas State Program Evaluation Nevada PUBLIC UTILITIES COMMISSION NEVADA, Page: 19#