2014 OR NG Program Evaluation - or2014ngprogramevaluation (Oregon; Natural Gas State Program Evaluation)

OR NG Program Evaluation, 2014, page 1Official PDF1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2014 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 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 1#

OR NG Program Evaluation, 2014, page 22014 Gas State Program Evaluation -- CY 2014 Gas State Agency: Oregon Rating: Agency Status: Date of Visit: 06/15/2015 - 06/18/2015 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 Utility Commission Address: PO Box 1088 City/State/Zip: Salem, OR 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 2014 (not the status of performance at the time of the evaluation). All items for which criteria have not been established should be answered based on the PHMSA representative's judgment. A deficiency in any one part of a multiple part question should be scored as needs improvement. Determine the answer to the question then select the appropriate point value. If a state receives less then the maximum points, include a brief explanation in the space provided for general comments/regional observations. If a question is not applicable to a state, select NA. Please ensure all responses are COMPLETE and ACCURATE, and OBJECTIVELY reflect state program performance. Increasing emphasis is being placed on performance. This evaluation together with selected factors reported in the state's annual progress report attachments provide the basis for determining the state's pipeline safety grant allocation. Field Inspection (PART G): The field inspection form used will allow different areas of emphasis to be considered for each question. Question 13 is provided for scoring field observation areas. In completing PART G, the PHMSA representative should include a written summary which thoroughly documents the inspection. Scoring Summary PARTS Possible Points Points Scored A Progress Report and Program Documentation Review 10 10 B Program Inspection Procedures 13 13 C Program Performance 43 43 D Compliance Activities 15 12 E Incident Investigations 10 10 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 110 107 State Rating................................................................................................................................................... 97.3 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 2#

OR NG Program Evaluation, 2014, 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 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: All information confirmed - they have responded to letter confirming jurisdictional authority 1 1 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: Each inspectors log was reviewed, there was a minor issue on how operator days in office are counted, office time spent writing inspection reports was being counted for several days ? but did not affect minimum required days. Should not include those in future and should only count office time on limited basis as described in guidelines 3 Accuracy verification of Operators and Operators Inspection Units in State - Progress Report Attachment 3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Information reviewed appeared correct. 1 1 4 Were all federally reportable incident reports listed and information correct? - Progress Report Attachment 4 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, but no incidents in 2014 1 1 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Compliance counts appear correct 6 Were pipeline program files well-organized and accessible? - Progress Report Attachment 6 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: All inspections kept in binder and electronically 2 2 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues 1 1 8 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report Attachment 8 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: no issues 1 1 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 3#

OR NG Program Evaluation, 2014, page 49 List of Planned Performance - Did state describe accomplishments on Progress Report in detail - Progress Report Attachment 10 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: 10 Total possible points for this section: 10 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 4#

OR NG Program Evaluation, 2014, page 5PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspection procedures should give guidance to state inspectors that insure consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Standard inspection procedures are generally outlined. 2 2 2 IMP and DIMP Inspection procedures should give guidance to state inspectors that insure 1 1 consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: IMP and DIMP inspections are generally noted in procedures. Needs to take some time to enhance and separately address each of this particular areas. Reference Guidelines Appendix S as Guide. 3 OQ Inspection procedures should give guidance to state inspectors that insure 1 1 consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: OQ inspections are generally noted and lumping into procedures with all other types of inspections. Should take time in next few months to enhance. 4 Damage Prevention Inspection procedures should give guidance to state inspectors that insure consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post- inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: same as above 1 1 5 Any operator training conducted should be outlined and appropriately documented as needed. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Same as above 1 1 6 Construction Inspection procedures should give guidance to state inspectors that insure consistency in all inspections conducted by the state? The following elements should be addressed at a minimum - pre-inspection activities, inspection activities, post-inspection activities. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: same as above 1 1 7 Does inspection plan address inspection priorities of each operator, and if necessary each 6 6 unit, based on the following elements? Yes = 6 No = 0 Needs Improvement = 1-5 a. Length of time since last inspection (Within five year interval) Yes No Needs Improvement DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 5#

OR NG Program Evaluation, 2014, page 6b. 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 Evaluator Notes: There is a general discussion in Section V of procedures. Needs to spend some time on enhancement of this. 8 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Overall general enhancement needed in procedures. Referred to Guidelines Appendix S to make procedures more robust. Total points scored for this section: 13 Total possible points for this section: 13 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 6#

OR NG Program Evaluation, 2014, 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 Yes = 5 No = 0 5 5 A. Total Inspection Person Days (Attachment 2): 307.50 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 3.34 = 735.53 Ratio: A / B 307.50 / 735.53 = 0.42 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: 307 days achieved full points. Had discussion about office time being used for inspection days on a limited basis and should not include time for report writing. 2 Has each inspector and program manager fulfilled the T Q Training Requirements? (See 5 5 Guidelines Appendix C for requirements) Chapter 4.4 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 e. Verify inspector has obtained minimum qualifications to lead any applicable standard inspection as the lead inspector. Yes No Needs Improvement Evaluator Notes: No official record was found on the OQ CBT for Alan Law although looking back to progress reports for several years it was noted taken (during manual entry years) in Dec 2003 with all other inspectors. Based on history of employee I have no doubt the necessary course was complete. Kevin will have Al take on-line CBT again to make sure record is updated. No issues. Recommend full course curriculum review. 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Appears to have good handle on issues and progressing well 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Letter was sent Oct 29, response Dec 29, 2014 2 2 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 Yes = 2 No = 0 Evaluator Notes: Yes, last in CY2012 and held one in CY2015. Joint with WA and ID 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 5 5 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 7#

OR NG Program Evaluation, 2014, page 8Yes = 5 No = 0 Needs Improvement = 1-4 Evaluator Notes: All operators were reviewed and records indicate all had been inspected in the five year time interval. 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The inspection forms reviewed in binder appear to have covered all code requirements. Most current PHMSA form 2 used. 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 Yes = 1 No = 0 Evaluator Notes: NO CI 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 Yes = 1 No = 0 Evaluator Notes: NO CI 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 Yes = 1 No = 0 Evaluator Notes: That question is included on inspection form no issues. 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 Yes = 1 No = 0 Evaluator Notes: That question is included on inspection form no issues. 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? Yes = 2 No = 0 Needs Improvement = 1 2 2 Evaluator Notes: Reviewed binder where this information was kept ? results are reviewed with operator during standard inspection. Recommended possible separate correspondence for more of a timely review. 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 Evaluator Notes: Yes = 2 No = 0 Needs Improvement = 1 DUNS: 933144107 2014 Gas State Program Evaluation 2 2 Oregon OREGON PUC, Page: 8#

OR NG Program Evaluation, 2014, page 9Reviewed databases no issues 14 Has state confirmed intrastate transmission operators have submitted information into NPMS database along with changes made after original submission? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: On transmission 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Regular inspections are being done 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, full program inspections are done on regular schedule 2 2 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Northwest Natural Gas checks in regularly and IMP activities are being reviewed. Recommend procedure enhancement in this area by operator specific. 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No issues, recommend memorializing annual visits with large operators 2 2 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 have been completed by December 2013 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No issues. Should make sure inspection interval matches effectiveness intervals required by RP1162 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). Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Website acceptable. Referred to WUTC website for possible enhancement. DUNS: 933144107 2014 Gas State Program Evaluation 1 1 Oregon OREGON PUC, Page: 9#

OR NG Program Evaluation, 2014, page 1021 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) Reports? Chapter 6.3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: None 1 NA 22 Did the State ask Operators to identify any plastic pipe and components that has shown a record of defects/leaks and what those operators are doing to mitigate the safety concerns? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: OR operators participate in PPDC 1 1 23 Did the state participate in/respond to surveys or information requests from NAPSR or PHMSA? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues 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.(New Question for CY2013, no points until CY2015 evaluation conducted in CY2016) Info Only = No Points Evaluator Notes: Discussed, but no issues 0 0 25 Did the state attend the National NAPSR Board of Directors Meeting in CY being evaluated? (New Question for CY2014, no points first year) Info Only = No Points Evaluator Notes: Did not attend in CY2014, intends to participate in CY2015 0 0 26 Discussion on State Program Performance Metrics found on Stakeholder Communication site. (question will be rolled up and included as part of Question C12 on future evaluations) http://primis.phmsa.dot.gov/comm/states.htm Info Only = No Points Evaluator Notes: Discussed metrics 0 0 27 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 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 10#

OR NG Program Evaluation, 2014, 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 3 resolution of a probable violation? Chapter 5.1 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: Needs to make specific notation in procedures about company officer. Brief procedure on routine review along with other . Recommend review of Appendix S and enhance. 2 Did the state follow compliance procedures (from discovery to resolution) and adequately 4 3 document all probable violations, including what resolution or further course of action is needed to gain compliance? Chapter 5.1 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: Mike Faulkenberry-Avista not a company officer, all appear to be documented , probably violations appear to have been resolved, but care needs to be taken to ensure if a compliance action is closed and determine proper follow-up 3 Did the state issue compliance actions for all probable violations discovered? 2 1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Improvement needed. Found violation at 434 Peppermint in Salem. Meter valve not accessible and was not treated as violation. 4 Did compliance actions give reasonable due process to all parties? Including "show cause" hearing if necessary. 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, previous penalties assessed 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: Penalties have been assessed 1 1 7 General Comments: Info Only = No Points Evaluator Notes: DUNS: 933144107 2014 Gas State Program Evaluation Info Only Info Only Oregon OREGON PUC, Page: 11#

OR NG Program Evaluation, 2014, page 12Total points scored for this section: 12 Total possible points for this section: 15 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 12#

OR NG Program Evaluation, 2014, page 13PART E - Incident Investigations Points(MAX) Score 1 Does the state have written procedures to address state actions in the event of an incident/ accident? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Full points, but suggest thorough review and enhancement. Refer to guideline appendix S 2 2 2 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 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: Mechanism in place and no other issues. 3 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 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No incidents 2014. Other non-reportable incidents were ok, no issues and correct determinations made 1 1 4 Were all incidents investigated, thoroughly documented, and with conclusions and 3 3 recommendations? 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 2014. Based on previous data, no issues. 5 Did the state initiate compliance action for violations found during any incident/accident investigation? Yes = 1 No = 0 Evaluator Notes: No incidents 1 NA 6 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 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues 1 1 7 Does state share lessons learned from incidents/accidents? (sharing information, such as: at NAPSR Region meetings, state seminars, etc) Yes = 1 No = 0 Evaluator Notes: DUNS: 933144107 2014 Gas State Program Evaluation 1 1 Oregon OREGON PUC, Page: 13#

OR NG Program Evaluation, 2014, page 14No issues. 8 General Comments: Info Only = No Points Evaluator Notes: Info Only Info Only Total points scored for this section: 10 Total possible points for this section: 10 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 14#

OR NG Program Evaluation, 2014, 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 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Done during last procedure audits. 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? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Conducted during standard audits, doing separate analysis this year. 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.) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Participate in OUNC and other damage prevention activities. 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Part of annual report review. 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 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 15#

OR NG Program Evaluation, 2014, 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: Cody Cox Location of Inspection: Salem Area Distribution Date of Inspection: June 17, 2015 Name of PHMSA Representative: Rex Evans Evaluator Notes: General Construction observation, no issues. Info Only Info Only 2 Was the operator or operator's representative notified and/or given the opportunity to be present during inspection? Yes = 1 No = 0 Evaluator Notes: No issues 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) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, inspection was documented appropriately 2 2 4 Did the inspector thoroughly document results of the inspection? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No issues 2 2 5 Did the inspector check to see if the operator had necessary equipment during inspection to conduct tasks viewed? (Maps,pyrometer,soap spray,CGI,etc.) Yes = 1 No = 0 Evaluator Notes: Yes, equipment was reviewed thoroughly 1 1 6 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) Yes = 2 No = 0 Needs Improvement = 1 a. Procedures b. Records c. Field Activities d. Other (please comment) Evaluator Notes: General construction activities reviewed along with thorough procedure review and OQ documentation 2 2 7 Did the inspector have adequate knowledge of the pipeline safety program and regulations? (Evaluator will document reasons if unacceptable) 2 2 DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 16#

OR NG Program Evaluation, 2014, page 17Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: New inspector, but no issues 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) Yes = 1 No = 0 Evaluator Notes: thorough job done in exit review 1 1 9 During the exit interview, did the inspector identify probable violations found during the inspections? (if applicable) Yes = 1 No = 0 Evaluator Notes: No violations 1 NA 10 General Comments: 1) What did the inspector observe in the field? (Narrative description of field observations and how inspector performed) 2) Best Practices to Share with Other States - (Field - could be from operator visited or state inspector practices) 3) 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 Info Only Info Only DUNS: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 17#

OR NG Program Evaluation, 2014, page 18F. Welding G. 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 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 18#

OR NG Program Evaluation, 2014, page 19PART H - Interstate Agent State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? 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"? 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? 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.) 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? 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? Evaluator Notes: Yes = 1 No = 0 Needs Improvement = .5 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? 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: 933144107 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 19#

OR NG Program Evaluation, 2014, page 20PART I - 60106 Agreement State (If Applicable) Points(MAX) Score 1 Did the state use the current federal inspection form(s)? 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? 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.) 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? 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? Evaluator Notes: Yes = 1 No = 0 Needs Improvement = .5 1 NA 6 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? 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 2014 Gas State Program Evaluation Oregon OREGON PUC, Page: 20#