# 2009 PR NG Program Evaluation - pr2009ngprogramevaluation (Puerto Rico; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA pr2009ngprogramevaluation
- **title:** 2009 PR NG Program Evaluation - pr2009ngprogramevaluation (Puerto Rico; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2009-01-01
- **effective on:** Not available
- **summary:** 2009 PHMSA natural gas program evaluation for Puerto Rico.
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1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2009 Natural Gas State Program Evaluation for Puerto Rico Public Service Commission Document Legend PART: O -- Representative Date and Title Information A -- General Program Qualifications B -- Inspections and Compliance - Procedures/Records/Performance C -- Interstate Agent States D -- Incident Investigations E -- Damage Prevention Initiatives F -- Field Inspection G -- PHMSA Initiatives - Strategic Plan H -- Miscellaneous I -- Program Initiatives DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 1

2009 Natural Gas State Program Evaluation -- CY 2009 Natural Gas State Agency: Puerto Rico Rating: Agency Status: 60105(a): Yes 60106(a): No Interstate Agent: No Date of Visit: 06/09/2010 - 06/11/2010 Agency Representative: Andres Torres, Director of Pipeline Safety, Puerto Rico Public Service Commission Alice Velazquez, Legal Counsel, Carlos Gonzales, Inspector and Carlos Charneco, Inspector CSP's PO Box address is: PO Box 190870 San Juan, PR 00919-0870 PHMSA Representative: Glynn Blanton, PHMSA State Programs Commission Chairman to whom follow up letter is to be sent: Name/Title: Maria T. Fullana Hernandez, El Presidente Agency: Puerto Rico Public Service Commission Address: Avenida Munoz Rivera #50 City/State/Zip: Hato Rey, Puerto Rico 00926 INSTRUCTIONS: Complete this evaluation in accordance with the Procedures for Evaluating State Pipeline Safety Program. The evaluation should generally reflect state program performance during CY 2009 (not the status of performance at the time of the evaluation). All items for which criteria have not been established should be answered based on the PHMSA representative's judgment. A deficiency in any one part of a multiple part question should be scored as needs improvement. Determine the answer to the question then select the appropriate point value. If a state receives less then the maximum points, include a brief explanation in the space provided for general comments/regional observations. If a question is not applicable to a state, select NA. Please ensure all responses are COMPLETE and ACCURATE, and OBJECTIVELY reflect state program performance. Increasing emphasis is being placed on performance. This evaluation together with selected factors reported in the state's annual certification/agreement attachments provide the basis for determining the state's pipeline safety grant allocation. Field Inspection (PART F): The field inspection form used will allow different areas of emphasis to be considered for each question. Question 13 is provided for scoring field observation areas. In completing PART F, the PHMSA representative should include a written summary which thoroughly documents the inspection. Scoring Summary PARTS Possible Points Points Scored A General Program Qualifications 25 19 B Inspections and Compliance - Procedures/Records/Performance 24 21 C Interstate Agent States 0 0 D Incident Investigations 2.5 2.5 E Damage Prevention Initiatives 9 9 F Field Inspection 12 12 G PHMSA Initiatives - Strategic Plan 7 3.5 H Miscellaneous 3 2.5 I Program Initiatives 6 6 TOTALS 88.5 75.5 State Rating................................................................................................................................................... 85.3 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 2

PART A - General Program Qualifications Points(MAX) Score 8 4 1 Did the state submit complete and accurate information on the attachments to its most current 60105(a) Certification/60106 (a) Agreement? (NOTE: PHMSA Representative to verify certification/agreement attachments by reviewing appropriate state documentation. Score a deficiency in any one area as "needs improvement". Attachment numbers appear in parenthesis) Previous Question A.1, Items a-h worth 1 point each Yes = 8 No = 0 Needs Minor Improvement = 3-7 Needs Major Improvement = 2 a. State Jurisdiction and agent status over gas facilities (1) b. Total state inspection activity (2) c. Gas facilities subject to state safety jurisdiction (3) d. Gas pipeline incidents (4) e. State compliance actions (5) f. State record maintenance and reporting (6) g. State employees directly involved in the gas pipeline safety program (7) h. State compliance with Federal requirements (8) SLR Notes: A four point reduction is being assessed due to failure to maintain accurate and complete records on the number of state inspection activities, compliance action taken against operators for non-compliance and recording information into the certification document correctly. A review office records supporting the number of violations cited as zero in calendar year 2009 attachment 5, found several violations that were cited against operators but not reported. The agency continues to lag in the adoption of Part 192 amendments pertaining to the pipeline safety regulations. In this regard, several amendments are more than three years pass the effective date of adoption. As noted in the 2008 state evaluation review several inspections were not counted and recorded correctly into the 2009 certification document and the agency was requested to recount the number of probable violations and compliance actions taken. This action has not been performed. 2 Did the state have an adequate mechanism to receive operator reporting of incidents to ensure state compliance with 60105(a) Certification/60106(a) Agreement requirements (fatality, injury requiring hospitalization, property damage exceeding $50,000 - Mechanism should include receiving "after hours" reports)? (Chapter 6) Previous Question A.2 Yes = 1 No = 0 1 1 SLR Notes: Yes, the agency requires all operators to call 911 when an incident occurs and report their findings. All calls to 911 are received by the Puerto Rico One Call center who notifies the pipeline safety staff members. All operators are required to file a written notification with the agency after the telephone notice is completed. No reportable incidents occurred in 2009. 3 Has the state held a pipeline safety TQ seminar(s) in the last 3 years? (NOTE: Indicate date of last seminar or if 2 2 state requested seminar, but T&Q could not provide, indicate date of state request for seminar. Seminars must be held at least once every 3 calendar years.) (Chapter 8.5) Previous Question A.4 Yes = 2 No = 0 SLR Notes: The last safety seminar was held in April, 2008. Andres Torres, Director Pipeline Safety will be making an application for a T&Q seminar to be scheduled in 2011. The seminar will be an update on the pipeline safety regulations. 4 Were pipeline safety program files well-organized and accessible?(NOTE: This also includes electronic files) (Chapter 5) Previous Question A.5 Yes = 1 No = 0 1 1 SLR Notes: Yes. Paper documents showing the inspections performed by staff members on the operators facilities was located outside the Director's office in locked and secure file cabinets. A review of the documents found file folders to be neat and well organized by system name and date. However, electronic files previously maintained by the program manager on inspections performed was missing on the laptop computer provided by PHMSA. 5 Did state records and discussions with the state pipeline safety program manager indicate adequate knowledge of PHMSA program and regulations? (Chapter 4.1, Chapter 8.1) Previous Question A.6 Yes = 2 No = 0 Needs Improvement = 1 2 1 SLR Notes: Mr. Andres Torres was appointed Director Pipeline Safety on March 10, 2010. Mr. Torres came to the Puerto Rico PSC in 1995 and has served in several different positions with the agency. His work in pipeline safety began in 2006 when he was transferred into the division as a gas pipeline inspector. He received a Masters Degree in Criminal Justice in 1995 and currently seeking his PHD in this field of study from American University of Puerto Rico. Mr. Torres has attended the PL1250 course at T&Q in 2007. A one point reduction is being assessed due to Mr. Torres limited knowledge on the Guidelines For States Participating in the Pipeline Safety Program; understanding of the State Agency's pipeline safety program inspection and enforcement procedures as they apply to all operators; and his skills on annual document submissions for the pipeline safety grant application, certification and year end payment request. DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 3

6 Did the state respond in writing within 60 days to the requested items in the Chairman's letter following the Region's last program evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8 Yes = 1 No = 0 SLR Notes: There were no issues in the 2009 Chairman's letter that required a response by the agency. 1 1 7 What actions, if necessary, did the State initiate as a result of issues raised in the Chairperson's letter from the previous year? Did actions correct or address deficiencies from previous year's evaluation? (No response is necessary if no items are requested in letter and mark "Yes") (Chapter 8.1) Previous Question A.8/A.9 Yes = 1 No = 0 SLR Notes: There were no issues mentioned in the Chairman's letter that required the agency to take action. 1 1 Personnel and Qualifications 8 Has each inspector fulfilled the 3 year TQ training requirement? If No, has the state been granted a waiver regarding TQ courses by the Associate Administrator for Pipeline Safety? (NOTE: If the State has new inspectors who have not attended all TQ courses, but are in a program which will achieve the completion of all applicable courses within 3 years of taking first course (5 years to sucessfully complete), or if a waiver has been granted by the applicable Region Director for the state, please answer yes.) (Chapter 4.4) Previous Question A.10 Yes = 3 No = 0 3 3 SLR Notes: The three and five year training requirement for one inspector will end in 2010 due to not scheduling this requirement when he was assigned to the division. The agency may consider submitting a waiver from training requirement by a petition to PHMSA Southern Region Director to prevent the loss of future points on the annual state program evaluation. Two newly appointed inspectors are waitlist to attend the PL1250 course being held in October, 2010. A high priority to complete this training course before performing gas safety inspections would increase their knowledge and skills and prepare them for future training courses. 9 Brief Description of Non-TQ training Activities: Info Only = No Points For State Personnel: No inside or outside training was provided to the Puerto Rico Public Service Commission staff members during calendar year 2009. For Operators: The Puerto Rico Public Service Commission pipeline safety staff did not provide training to operators during calendar year 2009. For Non-Operator Entities/Parties, Information Dissemination, Public Meetings: Staff members did not attend or participate in public meetings in 2009. Info Only Info Only SLR Notes: 10 Did the lead inspectors complete all required T&Q OQ courses and Computer Based Training (CBT) before conducting OQ Inspections? (Chapter 4.4.1) Previous Question A.12 Yes = 1 No = 0 1 0 SLR Notes: No, the lead inspector has not completed all required T&Q OQ courses and Computer based training course PL3OQ performing conducting OQ inspections. 11 Did the lead inspectors complete all required TQ Integrity Management (IMP) Courses/Seminars and CBT before conducting IMP Inspections? (Chapter 4.4.1) Previous Question A.13 Yes = 1 No = 0 SLR Notes: This question is not applicable because the Commonwealth of Puerto Rico has no gas transmission pipelines. 1 NA 12 Was the ratio acceptable of Total inspection Person-days to Total Person-days charged to the program by state inspectors? (Region Director may modify points for just cause) (Chapter 4.3) Previous Question B.12 Yes = 5 No = 0 A. Total Inspection Person Days (Attachment 2): 5 5 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 4

B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): Ratio: A / B If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 SLR Notes: Yes, the number of inspection person days to total person days was barely over the minmum amount required by the Guidelines for States Participation in the Pipeline Safety Program. The five point award was granted. The 2010 Gas Pipeline Safety Certification attachment 7 document listed Hector Torres at 30%and Andres Torres at 50% of their time performing inspections in the pipeline safety program. 13 Have there been modifications or proposed changes to inspector-staffing levels? (If yes, describe) Previous Info Only Info Only Question B.13 Info Only = No Points SLR Notes: Yes, in December, 2009 Hector Torres resigned from the Puerto Rico Public Service Commission (PR PSC). During the first quarter of 2010, Erick Riveria was acting Director Pipeline Safety until March 10, 2010 when PR PSC Chairman Maria Fullana appointed Andres Torres to Director Pipeline Safety. The agency is considering moving two inspectors into the pipeline safety division as full time employees from another division. The inspectors will be full time in the program and responsible for performing all gas safety inspections on operators under their jurisdiction. 14 Part-A General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: See SLR Notes on questions A.1 & A.5 Total points scored for this section: 19 Total possible points for this section: 25 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 5

PART B - Inspections and Compliance - Procedures/Records/ Performance Points(MAX) Score Inspection Procedures 1 Does the State have a written inspection plan to complete the following? (all types of operators including LNG) 6.5 6.5 (Chapter 5.1) Previous Question B.1 + Chapter 5 Changes + Incorporate LNG Yes = 6.5 No = 0 Needs Improvement = 50% Deduction a Standard Inspections (Including LNG) (Max points = 2) b IMP Inspections (Including DIMP) (Max points = .5) c OQ Inspections (Max points = .5) d Damage Prevention (Max points = .5) e On-Site Operator Training (Max points = .5) f Construction Inspections (Max points = .5) g Incident/Accident Investigations (Max points = 1) h Compliance Follow-up (Max points = 1) Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement SLR Notes: The Director, Pipeline Safety Program stated they inspect all operators annually. They use the federal inspection forms for all standard inspections which include OQ Protocol 9, Damage Prevention and Drug and Alcohol testing. Because there are no natural gas transmission pipelines in Puerto Rico, IMP inspections are not conducted. All incident, construction, training and other relative inspections are performed on an as need routine. 2 Did the written Procedures for selecting operators adequately address key concerns? (Chapter 5.1) Previous 2 1 Question B.2, items a-d are worth .5 point each Yes = 2 No = 0 Needs Improvement = 50% Deduction a Length of time since last inspection Yes No Needs Improvement b History of Operator/unit and/or location (including leakage , incident and compliance history) Yes No Needs Improvement c Type of activity being undertaken by operator (construction etc) Yes No Needs Improvement d For large operators, rotation of locations inspected Yes No Needs Improvement SLR Notes: The Director, Pipeline Safety Program stated they inspect all operators annually. However, a written procedure describing the selection of the operator by length of time since last inspected, history of operator unit(s), type of activity being undertaken by the operator and size of their service area has not been developed. Therefore, a one point reduction is being assessed due to not having a written plan pertaining to this requirement. Inspection Performance 3 Did the state inspect all types of operators and inspection units in accordance with time intervals established in its written procedures? (Chapter 5.1) Previous Question B.3 Yes = 2 No = 0 2 2 SLR Notes: calendar year 2009. Yes, a review of the PR 2010 Natural Gas Certification attachment 1 indicated all natural gas facilities under their jurisdiction were inspected during 4 Did the state inspection form cover all applicable code requirements addressed on the Federal Inspection forms? (Chapter 5.1 (3)) Previous Question B.4 Yes = 1 No = 0 1 1 SLR Notes: Yes, the Puerto Rico Public Service Commission's pipeline safety program utilizes the federal forms for all standard, OQ and construction inspections.. 5 Did state complete all applicable portions of inspection forms? (Chapter 5.1 (3)) Previous Question B.5 1 1 Yes = 1 No = 0 SLR Notes: Yes, a review of several inspection documents located in the file cabinets indicated all forms were complete. The satisfactory, unsatisfactory, not applicable and non compliance columns were checked where it was required. 6 Did the state initiate appropriate follow-up actions to Safety Related Condition Reports? (Chapter 6.3) Previous Question B.6 DUNS: 556471258 2009 Natural Gas State Program Evaluation .5 NA Puerto Rico Puerto Rico Public Service Commission, Page: 6

Yes = .5 No = 0 SLR Notes: filed during 2009. NA. Verification from PHMSA Southern Region office and discussion with Director Pipeline Safety indicated no Safety Related Condition Reports were 7 Did the state review operator procedures for determining if exposed cast iron pipe was examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Previous Question B.7 Yes = .5 No = 0 SLR Notes: No cast iron mains or service lines are located in Puerto Rico. .5 NA 8 Did the state review operator procedures for surveillance of cast iron pipelines, including appropriate action resulting from tracking circumferential cracking failures, study of leakage history, or other unusual operating maintenance condition? (Note: See GPTC Appendix G-18 for guidance) (NTSB) Previous Question B.8 Yes = .5 No = 0 SLR Notes: PR PSC does review operator's procedures during the inspection but Puerto Rico does not have cast iron mains or service lines. .5 .5 9 Did the state review operator emergency response procedures for leaks caused by excavation damage near buildings and determine whether the procedures adequately address the possibility of multiple leaks and underground migration of gas into nearby buildings Refer to 4/12/01 letter from PHMSA in response to NTSB recommendation P-00-20 and P-00-21? (NTSB) Previous Question B.9 Yes = .5 No = 0 .5 .5 SLR Notes: scheduled the leak for repair. Yes, PR PSC staff members review all leak repairs and leakage survey reports during each inspection to insure the operator has repaired, downgraded, or 10 Did the state review operator records of previous accidents and failures including reported third party damage and leak response to ensure appropriate operator response as required by 192.617? (NTSB) Previous Question B.10 Yes = 1 No = 0 SLR Notes: Yes, PR PSC does review leak repair documents to verify the operator has taken steps to eliminate the leak and make repairs. 1 1 Compliance - 60105(a) States 11 Did the state adequately document sufficient information on probable violations? (Chapter 5.2) Previous 1 .5 Question B.14 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Yes, PR PSC on the federal form did indicated the area of non-compliance but additional information is needed in the comment column and in the letter to the operator about the reason for non-compliance with the pipeline safety regulations. 12 Does the state have written procedures to identify the steps to be taken from the discovery to the resolution of a 1 1 probable violation as specified in the "Guidelines for State Participating in the Pipeline Safety Program"? (Chapter 5.1) Previous Question D(1).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Yes, the PR PSC procedures and letter to the operator states the operator has sixty days to either correct the violation or respond in writing to the agency. The operator may request additional time to correct the violation if justification is provided in the letter. Additional steps, show cause hearing' will be taken by PR PSC if the operator does not take action to correct the violation. 13 Does the state have written procedures to notify an operator when a noncompliance is identified as specified in the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(4)) Previous Question D 1 1 (1).2 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: procedures. Yes, the PR PSC procedures address this requirement. A verbal notice at the end of the inspection visit and a written letter to the operator is described in the DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 7

14 Does the state have a written procedure for routinely reviewing the progress of compliance actions to prevent delays or breakdowns of the enforcement process, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? (Chapter 5.1(5)) Previous Question D(1).3 Yes = 1 No = 0 Needs Improvement = .5 1 0 SLR Notes: No. The previous program manager had a spreadsheet on a laptop computer he used to record and monitor the scheduling of inspections to be performed. Neither the spreadsheet nor software to routinely review the progress of compliance action or scheduling of inspections could be located. A reduction of 1.0 point is being assessed due to not having a written plan or spreadsheet to meet this requirement. 15 Has the State issued compliance actions for all probable violations discovered? (Note : PHMSA representative 1 1 has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation) Previous Question D(1).4 Yes = 1 No = 0 SLR Notes: A review of 2010 Gas Safety Certification attachment 5 and discuss with Director Pipeline Safety no violations were issued in calendar year 2009. 16 Did the state follow its written procedures for reviewing compliance actions and follow-up to determine that 1 1 prompt corrective actions were taken by operators, within the time frames established by the procedures and compliance correspondence, as required by the "Guidelines for States Participating in the Pipeline Safety Program"? Previous Question D(1).5 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: Yes, based on a review of several inspection reports and letters it appears they are meeting this requirement. A follow-up inspection is performed on the operators found to be in non-compliance to monitor their progress. 17 If compliance could not be established by other means, did state pipeline safety program staff request formal action, such as a "Show Cause Hearing" to correct pipeline safety violations? (check each states enforcement procedures) Previous Question D(1).6 No = 0 Yes = 1 SLR Notes: The PR PSC did not conduct or issue a show cause hearing against an operator during calendar year 2009. 1 1 18 Did the state adequately document the resolution of probable violations? (Chapter 5.1 (6)) Previous Question 1 1 D(1).7 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The PR PSC is working on the development of a database program that will address the resolution of probable violations with a reporting closure date and summary. The Director Pipeline Safety has established a list to monitor the probable violations during this interim period. 19 Were compliance actions sent to a company officer? (manager or board member if municipal/government system) (Chapter 5.1(4)) Previous Question D(1).8 Yes = .5 No = 0 .5 .5 SLR Notes: Yes, a review of inspection reports and letters in the file cabinet indicated all correspondence to the operator was being sent to the company officer. 20 Did the compliance proceedings give reasonable due process to all parties? (check each states enforcement procedures) Previous Question D(1).9 Yes = 1 No = 0 Needs Improvement = .5 1 .5 SLR Notes: Yes, PR PSC rules and regulations apply the operator to respond to the area(s) of probable violation requesting additional time to correct the violation or ask for a show cause hearing before the Commission. Compliance - 60106(a) States 21 Did the state use the current federal inspection form(s)? Previous Question D(2).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: 1 NA 22 Are results adequately documented demonstrating inspection units were reviewed in accordance with state inspection plan? Previous Question D(2).2 DUNS: 556471258 2009 Natural Gas State Program Evaluation 1 NA Puerto Rico Puerto Rico Public Service Commission, Page: 8

Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: 23 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(2).3 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 24 Did the state immediately report to PHMSA conditions which may pose an imminent safety hazard to the public or to the environment? Previous Question D(2).4 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 25 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(2).5 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 26 Did the state initially submit adequate documentation to support compliance action by PHMSA on probable violations? Previous Question D(2).6 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: 27 Part B: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: See SLR notes pertaining to questions 2 & 14. Total points scored for this section: 21 Total possible points for this section: 24 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 9

PART C - Interstate Agent States Points(MAX) Score 1 Did the state use the current federal inspection form(s)? Previous Question D(3).1 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 1 NA 2 Are results documented demonstrating inspection units were reviewed in accordance with "PHMSA directed inspection plan"? Previous Question D(3).2 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 1 NA 3 Did the state submit documentation of the inspections within 60 days as stated in its latest Interstate Agent Agreement form? Previous Question D(3).3 Yes = 1 No = 0 1 NA SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 4 Were any probable violations identified by state referred to PHMSA for compliance? (NOTE: PHMSA representative has discretion to delete question or adjust points, as appropriate, based on number of probable violations; any change requires written explanation.) Previous Question D(3).4 Yes = 1 No = 0 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 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? Previous Question D(3).5 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 6 Did the state give written notice to PHMSA within 60 days of all probable violations found? Previous Question D(3).6 Yes = 1 No = 0 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 1 NA 7 Did the state initially submit documentation to support compliance action by PHMSA on probable violations? Previous Question D(3).7 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. 1 NA 8 Part C: General Comments/Regional Observations Info Only = No Points SLR Notes: Part C of this form is not applicable. The Puerto Rico Public Service Commission is not an interstate agent for PHMSA. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 10

PART D - Incident Investigations Points(MAX) Score 1 Are state personnel following the procedures for Federal/State cooperation in case of an incident? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6.1) Previous Question E.1 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: Yes, the Director Pipeline Safety is aware of the cooperative agreement between PHMSA and his agency on incident response and investigation. In calendar year 2009, no incidents occurred that would require cooperation between the PR PSC and PHMSA. 2 Are state personnel familiar with the jurisdictional authority and Memorandum of Understanding between NTSB and PHMSA? (See Appendix in "Guidelines for States Participating in the Pipeline Safety Program") (Chapter 6 ? Appendix D) Previous Question E.2 Yes = .5 No = 0 .5 .5 SLR Notes: investigation. Yes, the Director Pipeline Safety is aware of this document and memorandum of understanding in who would be the lead investigator in the accident 3 Did the state keep adequate records of incident notifications received? Previous Question E.3 Yes = 1 No = 0 Needs Improvement = .5 1 1 SLR Notes: One Call Center or operator. In calendar year 2009, no reportable incidents occurred or notifications were made to their agency. PR PSC is notified by when an incident occurs by the 4 If an onsite investigation of an incident was not made, did the state obtain sufficient information by other means to determine the facts and support the decision not to go on-site? Previous Question E.4 Yes = 1 No = 0 Needs Improvement = .5 1 NA SLR Notes: cause of the incident. No incidents occurred in calendar year 2009. However, all reportable incidents are investigated and information obtained from the operator as probable 5 Were investigations thorough and conclusions and recommendations documented in an acceptable manner? Previous Question E.5, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Observations and Document Review b. Contributing Factors c. Recommendations to prevent recurrences where appropriate SLR Notes: No incidents occurred or listed in ODES for calendar year 2009. Therefore, these questions are not applicable. 2 NA Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement 6 Did the state initiate enforcement action for violations found during any incident investigation(s)? Previous Question E.6 Variation Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: There were no incidents reported during 2009. This question is not applicable. 1 NA 7 Did the state assist region office by taking appropriate follow-up actions related to the operator incident reports to ensure accuracy and final report has been received by PHMSA? (validate annual report data from operators concerning incidents/accidents and investigate discrepancies) (Chapter 6) Previous Question E.7/E.8 Yes = .5 No = 0 SLR Notes: There were no incidents reported during 2009. This question is not applicable. .5 NA 8 Part D: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: No incidents occurred in calendar year 2009. Some point awards were given based on the response and knowledge of who is responsible for the investigation of an incident as it applies to NTSB and PHMSA.DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 11

Total points scored for this section: 2.5 Total possible points for this section: 2.5 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 12

PART E - Damage Prevention Initiatives Points(MAX) Score 1 Has the state reviewed directional drilling/boring procedures of each pipeline operator or its contractor to determine if they include actions to protect their facilities from the dangers posed by drilling and other trench less technologies? Previous Question B.11 Yes = 2 No = 0 Needs Improvement = 1 2 2 SLR Notes: Yes, PR PSC staff members during the standard inspection check the operator's procedures to determine if directional drilling/boring procedures are provided in the document to protect their facilities. 2 Did the state inspector check to assure the pipeline operator is following its written procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? New 2008 Yes = 2 No = 0 2 2 SLR Notes: The PR PSC is different from most state commissions in enforcement of damage prevention. In this regard, the One Call Center is located within the commission and information about damage prevention and reporting is available to their staff members daily. The One Call Center has several inspectors who randomly check construction sites to verify the facilities have been marked correctly and cite contractors for not complying with their regulations. The inspectors can issue a fine up to $3,000 for any violation found pertaining to the state damage prevention law. 3 Did the state encourage and promote the adoption of the Common Ground Alliance Best Practices document to 2 2 its regulated companies as a means of reducing damages to all underground facilities? Previous Question A.7 Yes = 2 No = 0 Needs Improvement = 1 SLR Notes: Yes, the PR PSC has provided information to all their operators about the Common Ground Alliance Best Practices document. The One Call Center promotes the best practices through newsletters and other documents to help reduce damages from occurring to all facilities. Data is being collected on the number of damages occurring on underground facilities by the One Call Center with anticipation of releasing a report of these findings via their web site address. 4 Has the agency or another organization within the state collected data and evaluated trends on the number of pipeline damages per 1,000 locate requests? New 2008 Yes = 1 No = 0 1 1 SLR Notes: Yes, PR PSC One Call Center collects damage prevention data from operators and develops a report of their findings. This information is published and available on their website. All damage prevention data is shared with the Director Pipeline Safety and his staff members. 5 Did the state review operators' records of accidents and failures due to excavation damage to ensure causes of failure are addressed to minimize the possibility of recurrence as required by 192.617? Yes = 2 No = 0 2 2 SLR Notes: Yes, PR PSC uses the federal form for their standard inspections each year. The form covers this requirement for the operators' investigation of incidents. 6 Part E: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: As mentioned previously, the One Call Center is located within the PR PSC. The agency is actively promoting damage prevention through its pipeline safety program and One Call Center to protect the public from an accidental release of product or disruption of service to the citizens of Puerto Rico. Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 556471258 2009 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 13

PART F - Field Inspection Points(MAX) Score 1 Operator, Inspector, Location, Date and PHMSA Representative Info Only = No Points Info Only Info Only Name of Operator Inspected: Santa Juanita Gas Services Name of State Inspector(s) Observed: Andres Torres, Director Pipeline Safety, Carlos Gonzales, Inspector & Carlos Charneco, Inspector Location of Inspection: Canton Mall Shopping Center - Bayamon, Puerto Rico Date of Inspection: June 10, 2010 Name of PHMSA Representative: Glynn Blanton, PHMSA State Programs SLR Notes: The inspection consited of a field review of the facilities located at the Canton Mall Shopping Center and records review located at the Santa Juanita's office in Carr, Puerto Rico. The operator was notified several weeks in advance of this standard inspection that would be performed. Mr. Jose A. River Jr., General Operations and President was present during the field and office review. Ms. Anabel Rivera, Human Resources, provided information about the operator's records and OQ and Alcohol and Drug Testing documents. 2 Was the operator or operator's representative notified and/or given the opportunity to be present during inspection? New 2008 Yes = 1 No = 0 SLR Notes: Yes, the operator was notified several weeks in advance of the scheduled standard inspection by phone and letter. 1 1 3 Did the inspector use an acceptable inspection form/checklist and was the form/checklist used as a guide for the inspection? (New regulations shall be incorporated) Previous Question F.2 Yes = 2 No = 0 2 2 SLR Notes: Yes, the PR PSC staff inspector was using the federal inspection form for the standard inspection. The responses given by the operator on the items asked on the inspection form were being recorded down on each item. 4 Did the inspector thoroughly document results of the inspection? Previous Question F.3 Yes = 2 No = 0 2 2 SLR Notes: Yes, each item on the federal inspection form was checked and comments entered on the form were additional clarification was needed. 5 Did the inspector check to see if the operator had necessary equipment during inspection to conduct tasks viewed? (Maps, pyrometer, soap spray, CGI, etc.) New 2008 Yes = 1 No = 0 1 1 SLR Notes: Yes, Jose Rivera, General Manager and President, had security keys to unlock the fenced in area where the propane tank and regulator station was located. He had equipment on his truck in the event any immediate repairs needed to be made. 6 What type of inspection(s) did the state inspector conduct during the field portion of the state evaluation? (i.e. Standard, Construction, IMP, etc) New 2008 Info Only = No Points SLR Notes: A standard inspection was performed with a review of the operator's OQ and drug testing requirements. Info Only Info Only 7 Did the inspector adequately review the following during the field portion of the state evaluation? (check all that apply on list) New 2008, comprehensive question worth 2 points total Yes = 2 No = 0 Needs Improvement = 1 a. Procedures b. Records c. Field Activities/Facilities DUNS: 556471258 2009 Natural Gas State Program Evaluation 2 2 Puerto Rico Puerto Rico Public Service Commission, Page: 14

d. Other (Please Comment) SLR Notes: Yes, the PR PSC inspector performed a thorough review of the operator's O&M procedures during the office visit. The inspector did check all records and field activities to insure the work performed was followed in accordance with their written procedures. The inspector was observed verifying written maintenance documents, OQ cards and checking for atmospheric corrosion on the pipeline and other above ground facilities. 8 Did the inspector have adequate knowle
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