# 2010 PR NG Program Evaluation - pr2010ngprogramevaluation (Puerto Rico; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA pr2010ngprogramevaluation
- **title:** 2010 PR NG Program Evaluation - pr2010ngprogramevaluation (Puerto Rico; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2010-01-01
- **effective on:** Not available
- **summary:** 2010 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 2010 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 2010 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 1

2010 Natural Gas State Program Evaluation -- CY 2010 Natural Gas State Agency: Puerto Rico Rating: Agency Status: 60105(a): Yes 60106(a): No Interstate Agent: No Date of Visit: 05/16/2011 - 05/20/2011 Agency Representative: Andres Torres, Director of Pipeline Safety, Puerto Rico Public Service Commission PHMSA Representative: Don Martin Commission Chairman to whom follow up letter is to be sent: Name/Title: Jose' H. Banuchi-Hernandez Esq., 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 2010 (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 24 15 B Inspections and Compliance - Procedures/Records/Performance 23.5 22.5 C Interstate Agent States 0 0 D Incident Investigations 2.5 2.5 E Damage Prevention Initiatives 9 9 F Field Inspection 11 11 G PHMSA Initiatives - Strategic Plan 7 4.5 H Miscellaneous 3 3 I Program Initiatives 6 6 TOTALS 86 73.5 State Rating................................................................................................................................................... 85.5 DUNS: 556471258 2010 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 2

PART A - General Program Qualifications Points(MAX) Score 8 7 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: The PR PSC failed to complete the information contained in Attachment 5 of the 2011 Certification accurately. The PR PSC entered 758 Probable Violations found during 2010 with 566 Probable Violations to corrected at the end of 2010. This would indicate that 192 Probable Violations were corrected during 2010. The entry for the number of Probable Violations corrected during 2010 was Zero. One point will not be given as a result of this inaccuracy. The PR PSC should review the Inspector Categories assigned on Attachment 7 with Category Qualifications described in Table 4-1 (Page 14) of the Guidelines for States Participating in the Pipeline Safety Program. Based upon this State Programs Evaluator's understanding of the PR PSC staff's experience, education and training course completions, it does not appear that any of the staff can be assigned a Category at the I or II level. A point reduction will not be given during this evaluation since points were deducted for this issue during the Certification Review. The PR PSC must address this issue to prevent point reductions in the future. The PR PSC indicated on Attachment 8 that it had not adopted civil penalties and several amendments to Part 192 and 199 had not been adopted. Points were deducted for these issues in the Certification Review. The PR PSC contends and has provided documents showing that the PR PSC does have civil penalty amounts and authority and that it has automatic adoption of federal pipeline safety regulation amendments. This should be reflected on Attachment 8 for the 2012 Certification to prevent future point reductions. 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, all operators are required to call 911 when an incident occurs and report the incident. All calls to 911 are received by the Puerto Rico One Call Center which notifies pipeline safety. All operators are required to file a written notification with the agency after the telephone notice is completed. No reportable incidents occurred in 2010. 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. Hard copy documents of inspections performed by staff members on the operators facilities were located outside the Director's office in locked file cabinets. A review of the documents found file folders to be neat and well organized by system name and date. 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 2 SLR Notes: Mr. Andres Torres was appointed Director Pipeline Safety on March 10, 2010. His work in pipeline safety began in 2006 when he was transferred into the division as a gas pipeline inspector. Andres has improved his communication skills in English quite well. There were a few exceptions on the 2011 DUNS: 556471258 2010 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 3

Certification submittal but Andres was on sick leave when the document was prepared. Andres appeared to understand the requirements on documents that require annual submittals. No points are being deducted this year but could next year if errors continue on annual document submittals. 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: An extension of the deadline was granted. The PRPSC responded within the extension period granted. 1 1 7 What actions, if necessary, did the State initiate as a result of issues raised in the Chairperson's letter from the 1 1 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: The PR PSC initiated a project to follow up on all outstanding probable violations to assure corrective actions were completed by the operators. Effort has been taken to improve the recordkeeping of information required for the annual Certification submittal. The PR PSC provided legal documents that appear to provide the PR PSC with authority to automatically adopt federal pipeline safety regulation amendments and allow for the assessment of civil penalties. The completion of training requirements is still an issue that the PR PSC must resolve. The PR PSC has elevated this concern to its highest priority and is making the attempts to successfully complete the training. The PR PSC is working toward but has not completed a method to risk rank operators' gas sytems and identify high risk areas to target in its inspections. 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 0 SLR Notes: Andres Torres attended his first TnQ Course, PL 1250, on 11/02/2007. The 3 year requirement to complete all applicable courses expired 11/02/2010. The 3 year requirement was not achieved. The 5 year requirement to successfully complete all applicable courses expires 11/02/2012. All other inspectors have not reached the 3 year or 5 year deadlines. Three points could not be given for this requirement. 9 Brief Description of Non-TQ training Activities: Info Only = No Points For State Personnel: and Carlos Gonzales attended Incident Response to Terristic Bombings. Andres Torres attended NHWA's General Hazardous Materials and North American Standards and a course on Pressure Vessels. For Operators: None provided in 2010. For Non-Operator Entities/Parties, Information Dissemination, Public Meetings: One call center provides damage prevention education. SLR Notes: See above. Info Only Info Only 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 NA SLR Notes: Prior to 2010, Hector Torres - Correa completed the training course for OQ inspections. Hector left the PR PSC in early 2010. The PR PSC does not have any staff that has completed the OQ training course. No OQ Plan inspections have taken place since Hector's departure. The PR PSC should have at least one staff person complete the training. 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 1 NA SLR Notes: during 2011. During 2010 there were no gas transmission pipelines in Puerto Rico. This question is not applicable. A transmission pipeline was placed into service DUNS: 556471258 2010 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 4

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): 122.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 2.20 = 484.00 Ratio: A / B 122.00 / 484.00 = 0.25 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 0 5 0 SLR Notes: The PRPSC needed 184 inspection person days to meet the minimum ratio of 0.38. The PRPSC had 122 inspection person days in 2010. Five points can not be given for Question A.12. 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: 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 transferred 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: Question A.1 - The PR PSC failed to complete the information contained in Attachment 5 of the 2011 Certification accurately. The PR PSC entered 758 Probable Violations found during 2010 with 566 Probable Violations to corrected at the end of 2010. This would indicate that 192 Probable Violations were corrected during 2010. The entry for the number of Probable Violations corrected during 2010 was Zero. One point will not be given as a result of this inaccuracy. The PR PSC should review the Inspector Categories assigned on Attachment 7 with Category Qualifications described in Table 4-1 (Page 14) of the Guidelines for States Participating in the Pipeline Safety Program. Based upon this State Programs Evaluator's understanding of the PR PSC staff's experience, education and training course completions, it does not appear that any of the staff can be assigned a Category at the I or II level. A point reduction will not be given during this evaluation since points were deducted for this issue during the Certification Review. The PR PSC must address this issue to prevent point reductions in the future. The PR PSC indicated on Attachment 8 that it had not adopted civil penalties and several amendments to Part 192 and 199 had not been adopted. Points were deducted for these issues in the Certification Review. The PR PSC contends and has provided documents showing that the PR PSC does have civil penalty amounts and authority and that it has automatic adoption of federal pipeline safety regulation amendments. This should be reflected on Attachment 8 for the 2012 Certification to prevent future point reductions. Question A.8 - Andres Torres attended his first TnQ Course, PL 1250, on 11/02/2007. The 3 year requirement to complete all applicable courses expired 11/02/2010. The 3 year requirement was not achieved. The 5 year requirement to successfully complete all applicable courses expires 11/02/2012. All other inspectors have not reached the 3 year or 5 year deadlines. Three points could not be given for this requirement. Question A.12 - The PRPSC needed 184 inspection person days to meet the minimum ratio of 0.38. The PRPSC had 122 inspection person days in 2010. Five points can not be given for Question A.12. Total points scored for this section: 15 Total possible points for this section: 24 DUNS: 556471258 2010 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 PR PSC's Pipeline Safety Program procedures state that all operators will be inspected annually. The PR PSC's procedures describe Standard Inspections which include OQ Protocol 9, Damage Prevention and Drug and Alcohol testing. During 2010 there weree no natural gas transmission pipelines in Puerto Rico, therefore IMP inspections are not included. 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 history of operator unit(s), type of activity being undertaken by the operator and size of their service area has not been developed. 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: year 2010. Yes, a review of the PR PSC 2010 Natural Gas Certification Attachment 1 indicated all operators under their jurisdiction were inspected during calendar 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: The PR PSC utlilizes the federal inspection forms. 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: Upon a review of randomly selected inspection reports, all applicable portions of the forms were completed. Unsatisfactory findings were documented with a statement stating why an unsatisfactory finding was concluded. DUNS: 556471258 2010 Natural Gas State Program Evaluation Puerto Rico Puerto Rico Public Service Commission, Page: 6

6 Did the state initiate appropriate follow-up actions to Safety Related Condition Reports? (Chapter 6.3) Previous Question B.6 Yes = .5 No = 0 SLR Notes: There were no safety related condition reports filed by an operator in Puerto Rico during 2010. .5 NA 7 Did the state review operator procedures for determining if exposed cast iron pipe was examined for evidence .5 NA of graphitization and if necessary remedial action was taken? (NTSB) Previous Question B.7 Yes = .5 No = 0 SLR Notes: All mains and services reported by operator(s) on annual report indicates that there are no cast iron pipe in Puerto Rico. This question is not applicable. 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 .5 NA SLR Notes: All mains and services reported by operator(s) on annual report indicates that there are no cast iron pipe in Puerto Rico. This question is not applicable. 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 1 1 B.10 Yes = 1 No = 0 SLR Notes: leaks. Yes, PR PSC does review leak repair documents to verify the operator has taken the appropriate steps to investigate leaks and take actions to eliminate the Compliance - 60105(a) States 11 Did the state adequately document sufficient information on probable violations? (Chapter 5.2) Previous 1 1 Question B.14 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: concluded. Upon a review of randomly selected inspection reports, unsatisfactory findings were documented with a statement stating why an unsatisfactory finding was 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 require that a letter be sent to the operator. The written notification 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: Yes, the PR PSC procedures require that a letter be sent to the operator. The written notification states the operator has sixty days to either correct the violation or respond in writing to the agency. DUNS: 556471258 2010 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 1 SLR Notes: Yes. As a result of the 2009 program evaluation, the PR PSC has instituted a formal process to follow up on non compliance notifications until verification of corrective actions allows for the closure of the inspection file. 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: Upon a review of randomly selected inspection reports, compliance notifications were sent for all inspections that resulted in probable violations found. 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: The Director Pipeline Safety established a list to monitor the probable violations during this interim period. During 2010, follow up notifications were sent to operators with outstanding probable violations. The PR PSC verified that corrections had been executed on all outstanding probable violations. 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 1 1 SLR Notes: year 2010. Because operators completed all corrective action required, the PR PSC did not conduct or issue a show cause hearing against an operator during calendar 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 Director Pipeline Safety established a list to monitor the probable violations during this interim period. During 2010, follow up notifications were sent to operators with outstanding probable violations. The PR PSC verified that corrections had been executed on all outstanding probable violations. 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 SLR Notes: Upon a review of randomly selected inspection reports, all compliance notifications were addressed to a company officer. .5 .5 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 1 SLR Notes: Yes, PR PSC rules and regulations allow the operator to respond to probable violation(s) 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 Yes = 1 No = 0 Needs Improvement = .5 SLR Notes: DUNS: 556471258 2010 Natural Gas State Program Evaluation 1 NA Puerto Rico Puerto Rico Public Service Commission, Page: 8

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 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) Info Only = No Points Info Only NA SLR Notes: 28 Part B: General Comments/Regional Observations Info Only = No Points Info Only Info Only SLR Notes: Question B.2 - The Director, Pipeline Safety Program stated they inspect all operators annually. However, a written procedure describing the selection of the operator by history of operator unit(s), type of activity being undertaken by the operator and size of their service area has not been developed. A one point reduction is being assessed due to not having a written plan pertaining to this requirement. Total points scored for this section: 22.5 Total possible points for this section: 23.5 DUNS: 556471258 2010 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. 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 1 NA SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent. 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 SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent. 1 NA 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. 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. 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. 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: 1 NA The Puerto Rico Public Service Commission is not an interstate agent. 8 Part C: General Comments/Regional Observations Info Only = No Points SLR Notes: The Puerto Rico Public Service Commission is not an interstate agent. Info Only Info Only Total points scored for this section: 0 Total possible points for this section: 0 DUNS: 556471258 2010 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 is aware of the cooperative agreement between PHMSA and his agency on incident response and investigation. In calendar year 2010, no incidents occurred that would require cooperation between the PRPSC 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: the accident investigation. Yes, the Director is aware of this document and the cooperation language in the Memorandum of Understanding at to who would be the lead investigator in 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: Upon a review of the Operator Entry Data System (ODES) and the PRPSC's 2011 Certification, there were no reportable incidents during 2010. 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 SLR Notes: No incidents occurred in calendar year 2010. The PRPSC's policy is to investigate all reportable incidents that occur. 1 NA 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 2 NA b. Contributing Factors c. Recommendations to prevent recurrences where appropriate SLR Notes: Yes No Needs Improvement Yes No Needs Improvement Yes No Needs Improvement No incidents occurred or were listed in ODES or the PRPSC's 2011 Certification for calendar year 2010. This question is not applicable. 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 1 NA SLR Notes: No incidents occurred or were listed in ODES or the PRPSC's 2011 Certification for calendar year 2010. This question is not applicable. 7 Did the state assist region office by taking appropriate follow-up actions related to the operator incident reports .5 NA 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: No incidents occurred or were listed in ODES or the PRPSC's 2011 Certification for calendar year 2010. This question is not applicable. 8 Part D: General Comments/Regional Observations Info Only = No Points SLR Notes: The PRPSC has generally complied with the requirements covered in Part D of this evaluation. DUNS: 556471258 2010 Natural Gas State Program Evaluation Info Only Info Only 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 2010 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 SLR Notes: The PRPSC has generally complied with the requirements covered in Part E of this evaluation. Info Only Info Only Total points scored for this section: 9 Total possible points for this section: 9 DUNS: 556471258 2010 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, Inc. Name of State Inspector(s) Observed: Andres Torres Location of Inspection: Bayamon, Puerto Rico Date of Inspection: May 19, 2011 Name of PHMSA Representative: Don Martin SLR Notes: The PR PSC had completed an inspection of a Santa Juanita Gas, Inc. (SJG) system located at the shopping mall in Bayamon, PR. Andres Torres conducted an inspection on this date to verify that corrective action was completed on items of non-compliance found during the previous inspection. Mr. Torres reviewed revisions to SJG's Operation and Maintenance Procedures Manual and observed above ground markers, warning signs and other aboveground equipment. SJG was represented by Jose Rivera, owner and Operation
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