2011 OR NG Program Evaluation - or2011ngprogramevaluation (Oregon; Natural Gas State Program Evaluation)

OR 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 OREGON PUC 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: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 1#

OR NG Program Evaluation, 2011, page 22011 Natural Gas State Program Evaluation -- CY 2011 Natural Gas State Agency: Oregon Rating: Agency Status: Date of Visit: 07/16/2012 - 07/19/2012 Agency Representative: Michael Thompson, Chief, Pipeline Safety PHMSA Representative: Jim Anderson Commission Chairman to whom follow up letter is to be sent: Name/Title: Susan Ackerman, Chair Agency: Oregon Public Utility Commission Address: P.O. Box 2148 City/State/Zip: Salem, Oregon 97308-2148 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 9 8.5 B Program Inspection Procedures 15 15 C Program Performance 43 43 D Compliance Activities 14 14 E Incident Investigations 3 3 F Damage Prevention 8 8 G Field Inspections 11 11 H Interstate Agent State (If Applicable) 0 0 I 60106 Agreement State (If Applicable) 0 0 TOTALS 103 102.5 State Rating................................................................................................................................................... 99.5 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 2#

OR 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 0.5 No. Jurisdictional authority was correct. Operator/Inspection Unit data was listed incorrectly. Improvement needed. 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 (A1b) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Inspector inspection days was reported accutately. 1 1 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: Attachment 3 data was listed properly. 1 1 4 Were all federally reportable incident reports listed and information correct? - Progress 1 NA Report Attachment 4 (A1d) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No incidents in 2011. One incident was reported, but it was recinded after determining it to be on the customer's piping. Reviewed incident information on Pipeline Data Mart. 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 (A1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Reviewed all inspection reports with noncompliances, including commission and operator correspondence. 1 1 6 Were pipeline program files well-organized and accessible? - Progress Report Attachment 6 (A1f, A4) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. Corespondence is also kept electronicly. 2 2 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 (A1g) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. Reviewed SABA for employee transcripts and informationwas accurate and complete. 1 1 8 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report 1 1 Attachment 8 (A1h) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: All amendments were adopted/taking steps. Amendment 116, effective date 4/4/2011, was docketed 5/4/2011 - Docket # 5/4/2012. DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 3#

OR 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: Yes. The Program Manager served as the Past Chair for NAPSR during the 2010-2011 term and remained active on the DIMP Implementation Committee and the Grant Allocation and Strategic Planning Committee. The state has continued to be active in working with operators to replace bare steel pipe in the state and are now down to slightly over 37 miles needing to be replaced. The damage Prevention program for the state is also showing continued progress with the reduction of third party damages for all operators. 10 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 8.5 Total possible points for this section: 9 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 4#

OR 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: Yes. Section VI(A). Inspection schedule set for 5 year intervals but usually completed on 3 years bases. 2 2 2 IMP Inspections (including DIMP) (B1b) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. Section VI(H). 3 OQ Inspections (B1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. Section VI(C). 1 1 4 Damage Prevention Inspections (B1d) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Noted as part of astandard inspection since OR PUC uses the federal form. 5 On-Site Operator Training (B1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. Section VI(F). 1 1 6 Construction Inspections (B1f) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. Section VI(B). 1 1 7 Incident/Accident Investigations (B1g) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. Section VI(G). DUNS: 933144107 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 Oregon OREGON PUC, Page: 5#

OR NG Program Evaluation, 2011, page 6Evaluator Notes: Yes. The procedure used by the OPUC was updated in 2011 to insure that all of the steps used to set inspection schedule priorities by risk were documented. 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: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 6#

OR 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): 345.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 3.35 = 737.00 Ratio: A / B 345.00 / 737.00 = 0.47 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: Inspection day ratio is .47 which exceeds the ratio of .38. 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: Yes. All inspectors and the PM have completed the OQ training, PM and 1 inspector has completed the DIMP training and 3 inspectors have completed the Root Cause Analysis training and the PM is on the wait list. All inspectors have completed all training for gas standard inspector required training classes. 3 Did state records and discussions with state pipeline safety program manager indicate 2 2 adequate knowledge of PHMSA program and regulations? Chapter 4.1,8.1 (A5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Michael Thompson is a past NAPSR Chair and has served in many NAPSR/PHMSA committees and is very knowledgeable of PHMSA's pipeline safety program. 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: Yes. Letter sent to OR PUC on 8/8/2011 and response sent 9/28/2011. 2 2 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 (A3) Yes = 2 No = 0 2 2 Evaluator Notes: Yes. Washington, Idaho and Oregon share the same 3 large operators and the states rotate hosting TQ seminars. Last seminar was 6/19/2009 and next seminar is scheduled 11/12/12 in Idaho. 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 Evaluator Notes: 5 5 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 7#

OR NG Program Evaluation, 2011, page 8Yes. program Manager has spreadsheet to monitor the inspection of operators and inspection units. Meets with staff at first of the year to set inspection schedule and logs inspections on spreadsheet. 7 Did inspection form(s) cover all applicable code requirements addressed on Federal 2 2 Inspection form(s)? Did State complete all applicable portions of inspection forms? Chapter 5.1 (B4-5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. OR PUC uses the federal form. Review of inspection reports showed all applicable portions of the forms were completed. 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: Yes. Checked inspection reports and the question were answered satisfactory. 1 1 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: Yes. Checked inspection reports and the question were answered satisfactory. 1 1 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 Evaluator Notes: Yes. Checked inspection reports and the question were answered satisfactory. 1 1 11 Did the state review operator records of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617? Chapter 5.1 (B10,E5) Yes = 1 No = 0 Evaluator Notes: Yes. During each Standard inspection this data is reviewed and discussed with the operator. 1 1 12 Has the state reviewed Operator Annual reports, along with Incident/Accident reports, for 2 2 accuracy and analyzed data for trends and operator issues? Data Initiative (G6-9,G16) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. The OPUC gas safety staff uses data collect from the operators on an annual basis, and has created EXCEL spread sheets to tract this type of data. Each reported incident is reviewed for accuracy. 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: Yes. The OPUC has input all OQ inspection results into the PHMSA database. DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 8#

OR NG Program Evaluation, 2011, page 914 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 Evaluator Notes: Yes. This is covered during each inspection. 1 1 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: Yes. This is done annually by the state and reviewed by an inspector. 2 2 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: Yes. The changes made by operators are reviewed by staff and field protocol inspection forms are done as part Standard Inspections for each operators as a whole. 17 Is state verifying operator's gas transmission integrity management programs (IMP) are 2 2 up to date? This should include a previous review of IMP plan, along with monitoring progress on operator tests and remedial actions. In addition, the review should take in to account program review and updates of operators plan(s). 49 CFR 192 Subpart 0 (I8-12) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. The OPUC has an inspector that is assigned this responsibility and has been monitoring operator's IMP since the final rule was adopted. 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: Yes. Michael Thompson is part of the NAPSR DIMP Team and has worked with operators in Oregon. Info Only Info Only 19 Is state verifying operators Public Awareness programs are up to date and being 2 2 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: Yes. The OPUC has assigned an inspector to be responsible for this and has already completed the three major operators for the state. 20 Does the state have a mechanism for communicating with stakeholders - other than state 1 1 pipeline safety seminar? (This should include making enforcement cases available to public). (G20-21) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. The OPUC is active in a variety of agencies and committees that are associated with the pipeline safety mission. ie; The Oregon Utility Safety Committee, Oregon Utility Notification Center and the Oregon Utility Coordinating Councils ?. DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 9#

OR NG Program Evaluation, 2011, page 1021 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) Reports? Chapter 6.3 (B6) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: NO SRC in 2011. 1 NA 22 Did the State ask Operators to identify any plastic pipe and components that has shown a 1 1 record of defects/leaks and what those operators are doing to mitigate the safety concerns? (G13) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. The OPUC has worked with operators for years to look at the different types of art risk pipelines, (Cast Iron, Bare Steel and Aldyl A) those that have Aldyl A pipe have made it a priority in their DIMP plans for replacement. 23 Did the state participate in/respond to surveys or information requests from NAPSR or PHMSA? (H4) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes. The OPUC is very active with NAPSR and has participated in many formal surveys. 1 1 24 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 43 Total possible points for this section: 43 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 10#

OR 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: Yes. Procedures are reviewed and updated annually. Have received and electronic copy. Section VIII of the procedures manual contains enforcement steps. 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: Yes. Reviewed all compliance actions sent by the OR PUC. 3 Did the state issue compliance actions for all probable violations discovered? (B15) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. 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: Yes. OR PUC uses State Statute 756.518 - 756.561 for its due process. 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: Yes. 2 2 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: Currently fines Samage Prevention cases through the One- Call Law. 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: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 11#

OR 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: Yes. No reportable incidents in 2011. OR PUC provides the operators the ability to complete an electronic inciden report online. 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 incidents in 2011. 1 NA 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: No incidents in 2011. 4 Did the state initiate compliance action for violations found during any incident/accident investigation? (D6) Yes = 1 No = 0 Evaluator Notes: No incidents in 2011. 1 NA 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 incidents in 2011. 1 NA 6 Does state share lessons learned from incidents/accidents? (sharing information, such as: 1 1 at NAPSR Region meetings, state seminars, etc) (G15) Yes = 1 No = 0 Evaluator Notes: Yes. The OPUC shares this information at the Regional meetings in the state of the State report, and is discussed at all OUSC meetings held on both sides of the state. 7 General Comments: Info Only = No Points Evaluator Notes: DUNS: 933144107 2011 Natural Gas State Program Evaluation Info Only Info Only Oregon OREGON PUC, Page: 12#

OR NG Program Evaluation, 2011, page 13Total points scored for this section: 3 Total possible points for this section: 3 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 13#

OR 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: The OPUC has a very active damage prevention program and works closely with all operators to ensure they have processes and procedures in place to prevent damaging other facilities and to their own. By state law they must all be members of the state One Call. 2 Did the state inspector check to assure the pipeline operator is following its written 2 2 procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? (E2) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. OPUC reviews and discusses with each operator during standard inspections their procedures for compliance with the state One Call law. 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: Yes. The OPUC holds the authority to enforce the state One Call law and works very closely with its operators to ensure they are doing everything they can to reduce the risk on excavator damage. 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: 2 2 Yes. The OPUC uses an Excel worksheet to track and evaluate data from gas operators on at least an annual basis. 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: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 14#

OR NG Program Evaluation, 2011, page 15PART G - Field Inspections Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only = No Points Name of Operator Inspected: Cascade Natural Gas Name of State Inspector(s) Observed: Kevin Hennessy and Alan Lau Location of Inspection: Bend, oregon Date of Inspection: July 18, 2012 Name of PHMSA Representative: Jim Anderson Evaluator Notes: Inspector did a thorough inspection. Info Only Info Only 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: Yes. 1 1 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: Yes. OR PUC uses the federal inspection form. 2 2 4 Did the inspector thoroughly document results of the inspection? (F4) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. 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.) (F5) Yes = 1 No = 0 Evaluator Notes: Yes. All needed equipment was present at the inspection. 1 1 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 b. Records c. Field Activities d. Other (please comment) Evaluator Notes: Inspected valve maintenance and regurlator and relief device set points. 2 2 7 Did the inspector have adequate knowledge of the pipeline safety program and regulations? (Evaluator will document reasons if unacceptable) (F8) DUNS: 933144107 2011 Natural Gas State Program Evaluation 2 2 Oregon OREGON PUC, Page: 15#

OR NG Program Evaluation, 2011, page 16Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes. 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: Yes. Inspectors communicated with the operator on what was covered during the inspection. 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: No noncompliances found. 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 C. Tapping D. Valve Maintenance E. Vault Maintenance F. Welding Info Only Info Only DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 16#

OR NG Program Evaluation, 2011, page 17G. OQ - Operator Qualification H. Compliance Follow-up I. Atmospheric Corrosion J. Other Evaluator Notes: Total points scored for this section: 11 Total possible points for this section: 11 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 17#

OR 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: Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 18#

OR 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: Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 933144107 2011 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 19#