2013 OR NG Program Evaluation - or2013ngprogramevaluation (Oregon; Natural Gas State Program Evaluation)

OR NG Program Evaluation, 2013, page 1Official PDF1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2013 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 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 1#

OR NG Program Evaluation, 2013, page 22013 Natural Gas State Program Evaluation -- CY 2013 Natural Gas State Agency: Oregon Rating: Agency Status: Date of Visit: 08/25/2014 - 08/28/2014 Agency Representative: Kevin Hennessy, Chief, Pipeline Safety PHMSA Representative: Rex Evans Commission Chairman to whom follow up letter is to be sent: Name/Title: Susan Ackerman, Chair Agency: Oregon Public Utilities Commission Address: P.O. Box 2148 City/State/Zip: Salem, OR 97308 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 2013 (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 7.5 B Program Inspection Procedures 15 14.5 C Program Performance 43 34 D Compliance Activities 15 14 E Incident Investigations 4 4 F Damage Prevention 8 8 G Field Inspections 10 5.5 H Interstate Agent State (If Applicable) 0 0 I 60106 Agreement State (If Applicable) 0 0 TOTALS 105 87.5 State Rating................................................................................................................................................... 83.3 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 2#

OR NG Program Evaluation, 2013, 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: Number of units inspected in file was 9 not 17 as noted. all other numbers appear correct 1 0.5 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 (A1b) Yes = 1 No = 0 Needs Improvement = .5 1 0 Evaluator Notes: Inspection days could not be verified. It appears that a person-day definition was not interpreted correctly in some instances (i.e. attendance at One-Call meetings do not count as inspection person days) Inspections should be on-site at operator locations. Many inspection days could not be verified at all. 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: Information appears correct. 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: There were no federally reported incidents for the period. Therefore, correct 1 1 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 (A1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Compliance Activity counts appeared correct based on information reviewed. 1 1 6 Were pipeline program files well-organized and accessible? - Progress Report 2 1 Attachment 6 (A1f, A4) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Transition of new program manager found it difficult to create some of the information used to accurately complete the progress report, improvement needed. In process of conversion to files over to "cloud". Expressed concern about being able to access all files if naming conventions are not followed. Suggested further procedures developed to ensure file recovery is successful when needed and necessary metadata is added on electronic files as needed. 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 correct 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: Information appears correct DUNS: 933144107 2013 Natural Gas State Program Evaluation 1 1 Oregon OREGON PUC, Page: 3#

OR NG Program Evaluation, 2013, page 49 List of Planned Performance - Did state describe accomplishments on Progress Report in detail - Progress Report Attachment 10 (H1-3) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues 1 1 10 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 7.5 Total possible points for this section: 10 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 4#

OR NG Program Evaluation, 2013, page 5PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspections (B1a) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: 2 2 Primary section found on Page 6 in Section VI, inspection schedule is 5 year maximum, but told practice is three years. 2 IMP Inspections (including DIMP) (B1b) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Included Pages 9-11, Section VI, Part H for IMP, Part I for DIMP. Recommend annual review of general IMP and DIMP activities with large operators. 3 OQ Inspections (B1c) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Page 8, Section VI, Part C 1 1 4 Damage Prevention Inspections (B1d) 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: This is part of Standard Inspection on Fed Form. 5 On-Site Operator Training (B1e) Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Page 9, Section VI Part F 1 1 6 Construction Inspections (B1f) Yes = 1 No = 0 Needs Improvement = .5 1 0.5 Evaluator Notes: Improvement needed in order to give inspectors more clarity as to expectations on what needs to be looked at and documented during field inspections and reference to any inspection forms should be added to this section 7 Incident/Accident Investigations (B1g) 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No current issues. Recommended to make sure ready when and if an incident occurs. 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) DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 5#

OR NG Program Evaluation, 2013, page 6f. Are inspection units broken down appropriately? Evaluator Notes: general discussion about application of the elements. No issues at this time. Yes No Needs Improvement 9 General Comments: Info Only = No Points Evaluator Notes: General procedure review recommend to capture any improvements to program. Info Only Info Only Total points scored for this section: 14.5 Total possible points for this section: 15 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 6#

OR NG Program Evaluation, 2013, 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 5 0 A. Total Inspection Person Days (Attachment 2): 319.00 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 319.00 / 737.00 = 0.43 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: Review of program could not validate close to the 279 inspection days needed in order to get to the ratio needed for minimums. A thorough inspection record review was completed to attempt to verify without any success. Asked PM to provide a review and new summary of inspection days so Progress Report can be amended. Recommended completion by the end of October 2014. 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: ok 3 Did state records and discussions with state pipeline safety program manager indicate 2 1 adequate knowledge of PHMSA program and regulations? Chapter 4.1,8.1 (A5) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: First evaluation as program manager, needs improvement in overall knowledge of PHMSA program guidelines, and evaluation of own program issues. 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: They responded within 60 days and addressed issues 2 2 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 (A3) Yes = 2 No = 0 Evaluator Notes: The last seminar was a multi-state effort in Idaho on November 2012. 2 2 6 Did state inspect all types of operators and inspection units in accordance with time intervals established in written procedures? Chapter 5.1 (B3) Yes = 5 No = 0 Needs Improvement = 1-4 Evaluator Notes: DUNS: 933144107 2013 Natural Gas State Program Evaluation 5 5 Oregon OREGON PUC, Page: 7#

OR NG Program Evaluation, 2013, page 87 Did inspection form(s) cover all applicable code requirements addressed on Federal 2 1 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: The inspection forms appear to cover all code requirements. Improvement is needed in making sure field activities are documented with more information as to what locations were visited which was not present on all inspections. This was discussed during previous evaluation. 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: no cast iron 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: No cast iron 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 Evaluator Notes: No issues, noted on inspections 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: Part of standard inspection 1 1 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: Reports are reviewed and trends reviewed etc. No issues. 2 2 13 Did state input all applicable OQ, IMP inspection results into federal database in a timely manner? This includes replies to Operator notifications into IMDB database. Chapter 5.1 (G10-12) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: OQ and IMP Inspection results were reviewed in databases. No issues. 2 2 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 8#

OR NG Program Evaluation, 2013, 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: Confirmed in Standard 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: D & A programs are being regularly reviewed and reviewed actual inspections being conducted in files. 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: Several plan updates were done in CY2013 and appears to be conducting as needed. Recommend procedure update to ensure done within reasonable time frames. 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: IMP progress appears to be done. Also recommend formal procedure review to make sure these plans have some level of review with major operators on an annual basis 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 DIMP ? First round of program inspections should be complete by December 2014 2 2 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: This appears on target. Also, as with IMP recommend annual reviews of large operators at a minimum. 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) PAPEI Effectiveness Inspections should be complete by December 2013 2 0 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Not all PAPEI inspections were complete by end of 2013. Zero points 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 DUNS: 933144107 2013 Natural Gas State Program Evaluation 1 1 Oregon OREGON PUC, Page: 9#

OR NG Program Evaluation, 2013, page 10Evaluator Notes: Their primary activity is with Oregon Utility Notification Center and other one-call organizations. Website also has information links - it's probably time to review and make sure all information is updated. 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: No SRC's in previous period. Verified in PDM 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: No issues. Indicated will be part of DIMP program. Also discussed the operators participation in the AGA PPDC. 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: Actively participates 1 1 24 If the State has issued any waivers/special permits for any operator, has the state verified conditions of those waivers/special permits are being met? This should include having the operator amend procedures where appropriate. Info Only = No Points Evaluator Notes: Discussed. None present Info Only Info Only 25 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 34 Total possible points for this section: 43 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 10#

OR NG Program Evaluation, 2013, 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: ok 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 b. Were probable violations documented? Yes No Needs Improvement c. Were probable violations resolved? Yes No Needs Improvement d. Was the progress of probable violations routinely reviewed? Yes No Needs Improvement Evaluator Notes: Other than finding no follow-up or record of one non-compliance regarding pipeline markers that occurred with Northwest Natural Gas in March of 2013, everything else appears to have been taken care of. A point for that issue is deducted in next section. Some examination of this process to make sure everything is closed properly may be a good idea for the benefit of new program manager. 3 Did the state issue compliance actions for all probable violations discovered? (B15) Yes = 2 No = 0 Needs Improvement = 1 2 1 Evaluator Notes: As noted in previous question, there was one issue with pipeline markers at one inspection unit of Northwest Natural Gas in March 2013 that it appears no compliance action was taken even though report indicated an issue. There were two other issues of compliance in same report which were taken care of with no problem so unsure paperwork issue. Only one point deducted on this question only. 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: 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: no issues and yes 2 2 6 Can the State demonstrate it is using their enforcement fining authority for pipeline safety violations? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, last fine was in 2012 against Avista 1 1 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 11#

OR NG Program Evaluation, 2013, page 127 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: 15 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 12#

OR NG Program Evaluation, 2013, page 13PART 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: System to receive and respond ok. 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: 1 1 There were no federally reportable incidents, although state has lower requirement and it appears information sufficient. 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: There were no federally reportable incidents during CY2013. 4 Did the state initiate compliance action for violations found during any incident/accident investigation? (D6) Yes = 1 No = 0 Evaluator Notes: Not applicable for CY2013 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: Again, NA for CY2013 1 NA 6 Does state share lessons learned from incidents/accidents? (sharing information, such as: at NAPSR Region meetings, state seminars, etc) (G15) Yes = 1 No = 0 Evaluator Notes: State does share this information at NAPSR Meetings. No issues. 1 1 7 General Comments: Info Only = No Points Evaluator Notes: DUNS: 933144107 2013 Natural Gas State Program Evaluation Info Only Info Only Oregon OREGON PUC, Page: 13#

OR NG Program Evaluation, 2013, page 14Total points scored for this section: 4 Total possible points for this section: 4 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 14#

OR NG Program Evaluation, 2013, page 15PART F - Damage Prevention 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? NTSB (E1) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Active in damage prevention. This is part of standard inspection 2 2 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: Reviewed during standard and active in this area. 2 2 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: very active with One-Call laws and work with operators regularly on DP issues and various underground organizations. 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: collected on annual reports and reviewed with other data 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: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 15#

OR NG Program Evaluation, 2013, page 16PART G - Field Inspections Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only = No Points Name of Operator Inspected: Northwest Natural Gas Name of State Inspector(s) Observed: John Ivey, Alan Lau, two trainees, Kevin Hennessy Location of Inspection: Various Portland Beaverton Divison Date of Inspection: August 27, 2014 Name of PHMSA Representative: Rex Evans Evaluator Notes: 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: 1 1 The operator was present. Time was spent viewing new construction projects 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 1 Evaluator Notes: A checklist was used, time was not taken to review all the items on the checklist and did not stay around in order to see all covered tasks completed. checklists completed did not give an accurate description of items viewed. 4 Did the inspector thoroughly document results of the inspection? (F4) 2 1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Results were not documented thoroughly or accurately based on questioning of inspector after report was complete. 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: 1 0.5 Needs improvement - during review of a new service line installation the inspector was not fully aware of all the things needed to make sure inspection was done correctly. Specifically whether or not the pipe was cleaned with alcohol. 2 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: Improvement needed in overall conducting of field inspections of this nature. Procedures were not fully reviewed and knowledge of process was missing. DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 16#

OR NG Program Evaluation, 2013, page 177 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: Based on answers to previous questions, needs improvement in this area. 2 1 8 Did the inspector conduct an exit interview? (If inspection is not totally complete the 1 NA interview should be based on areas covered during time of field evaluation) (F9) Yes = 1 No = 0 Evaluator Notes: not needed based on type of inspection and timeframe, but suggested giving summaries to the operator compliance person. 9 During the exit interview, did the inspector identify probable violations found during the inspections? (if applicable) (F10) Yes = 1 No = 0 Evaluator Notes: Further investigation is needed on some procedure issues, but NA for this moment 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 DUNS: 933144107 2013 Natural Gas State Program Evaluation Info Only Info Only Oregon OREGON PUC, Page: 17#

OR NG Program Evaluation, 2013, page 18F. Welding G. OQ - Operator Qualification H. Compliance Follow-up I. Atmospheric Corrosion J. Other Evaluator Notes: Total points scored for this section: 5.5 Total possible points for this section: 10 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 18#

OR NG Program Evaluation, 2013, page 19PART 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: section Not Applicable Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 19#

OR NG Program Evaluation, 2013, page 20PART 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: Section not applicable Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 933144107 2013 Natural Gas State Program Evaluation Oregon OREGON PUC, Page: 20#