# 2015 TX NG Program Evaluation - tx-2015-gas-program-evaluation (Texas; Natural Gas State Program Evaluation)

- **operation:** document
- **citation:** PHMSA tx-2015-gas-program-evaluation
- **title:** 2015 TX NG Program Evaluation - tx-2015-gas-program-evaluation (Texas; Natural Gas State Program Evaluation)
- **source type:** inspection
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2015-01-01
- **effective on:** Not available
- **summary:** 2015 PHMSA natural gas program evaluation for Texas.
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- **app url:** https://regulus.evalyn.ai/document/phmsa-state-evaluation-tx-ng-program-evaluation-tx-2015-gas-program-evaluation
- **source url:** https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/docs/subdoc/3451/tx-2015-gas-program-evaluation.pdf
**body:**

1200 New Jersey Avenue SE Washington DC 20590 U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 2015 Gas State Program Evaluation for RAILROAD COMMISSION OF TEXAS 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: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 1

2015 Gas State Program Evaluation -- CY 2015 Gas State Agency: Texas Rating: Agency Status: 60105(a): Yes 60106(a): No Interstate Agent: Yes Date of Visit: 01/01/1900 - 01/01/1900 Agency Representative: Kari French, Stephanie Wiedman, Carrie Ebbinghaus, Jim Osterhous, Kendall Smith PHMSA Representative: Michael Thompson, Chris McLeran, Agustin Lopez Commission Chairman to whom follow up letter is to be sent: Name/Title: , Agency: Address: City/State/Zip:, 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 2015 (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 12 C Program Performance 50 48 D Compliance Activities 15 15 E Incident Investigations 11 8.5 F Damage Prevention 8 8 G Field Inspections 12 12 H Interstate Agent State (If Applicable) 0 0 I 60106 Agreement State (If Applicable) 0 0 TOTALS 119 113.5 State Rating................................................................................................................................................... 95.4 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 2

PART A - Progress Report and Program Documentation Review Points(MAX) Score 1 Accuracy of Jurisdictional Authority and Operator/Inspection Units Data - Progress 1 1 Report Attachment 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: PES tracks the number of operators and inspection unit data. Verified the number of operators and inspections in PES. No issues identified. 2 Review of Inspection Days for accuracy - Progress Report Attachment 2 Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: Inspection person days were supported by the RRC PES database. However, 5 inspection person days were entered for Interstate LNG. The entry should have been entered has Intrastate LNG inspections. The Program Manager was requested to amend the Progress Report and resubmit. There is no point deduction because the Progress Report results will not change. 3 Accuracy verification of Operators and Operators Inspection Units in State - Progress 1 1 Report Attachment 3 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Reviewed the PES Database to verify the information in Attachment 3. Attachment 3 did show two Intrastate LNG operators in the correct category. 4 Were all federally reportable incident reports listed and information correct? - Progress Report Attachment 4 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues were found. 1 1 5 Accuracy verification of Compliance Activities - Progress Report Attachment 5 1 1 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: No issues found after review of the records. 6 Were pipeline program files well-organized and accessible? - Progress Report 2 2 Attachment 6 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: All files are kept electronically. The electronic files are kept in the Pipeline Evaluation System, "PES" Database. No issues identified. 7 Was employee listing and completed training accurate and complete? - Progress Report Attachment 7 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Reviewed employee training in SABA and with the RRC Database and no issued identified with the list. 1 1 8 Verification of Part 192,193,198,199 Rules and Amendments - Progress Report 1 1 Attachment 8 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: There are a few periodic updates of regulatory references from 2015 that are yet to be adopted. Measures are being undertaken to adopt the changes. DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 3

9 List of Planned Performance - Did state describe accomplishments on Progress Report in 1 1 detail - Progress Report Attachment 10 Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, reviewed accomplishments in attachment 10. The RRC was able to add 20 FTEs opening in 2015 which will give them a total of 63 inspectors. 10 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: A2 -Inspection person days were supported by the RRC PES database. However, 5 inspection person days were entered for Interstate LNG. The entry should have been entered has Intrastate LNG inspections. The Program Manager was requested to amend the Progress Report and resubmit. There is no point deduction because the Progress Report results will not change. Total points scored for this section: 10 Total possible points for this section: 10 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 4

PART B - Program Inspection Procedures Points(MAX) Score 1 Standard Inspection procedures should give guidance to state inspectors that insure 2 2 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: Section 14.1.1 Pre-Inspection Planning procedure. Consideration should be given to previous violations, operating history and maintenance issues that may have previously occurred. These considerations can all be found via Pipeline Evaluation System (PES). Inspections are conducted comprehensively, but give particular attention to previous areas of concern. Standard inspections are on a five year interval. Procedures include pre and post inspection activities. 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: Section 17.1 for IMP procedures. Section 17.2 for DIMP procedures. For improvements the RRC should add form 24 which is for field implementation form. No other issues identified. 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: Section 17.3 OQ Inspections has details for performing OQ inspections. OQ inspections are proposed to be on a five year inspection cycle. 4 Damage Prevention Inspection procedures should give guidance to state inspectors that 1 1 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: David Ferguson is Supervisor for Damage Prevention Inspections, and he was interviewed. Section 17.7 has details for Damage Prevention Inspections. Procedures give guidance to state inspectors that insure consistency in all inspections conducted by the state addressing pre-inspection activities, inspection activities, and post- inspection activities. 5 Any operator training conducted should be outlined and appropriately documented as needed. Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Hold yearly Pipeline Safety Seminar for pipeline operators. They need to take credit for all inspector time committed to the seminar. 1 1 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 5

6 Construction 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: Section 17.6 New Construction Evaluation has procedure for conducting new construction inspections. TAX 8.115 is Texas law that requires operators to report any new construction 30 days prior to constructing more than 1 mile of pipe. Law is changing to 60 day notice and .1 miles of new pipe. The New Construction Lead Inspector must successfully complete required TQ courses prior to conducting any new construction inspections. This person should lead the evaluation with the assistance of other participating team members, if a team is utilized, and is to remain present during the duration of the evaluation. Have changed the process and procedure for conducting construction inspections. This was a big improvement from last year's evaluation. 7 Does inspection plan address inspection priorities of each operator, and if necessary each 6 5 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 b. Operating history of operator/unit and/or location (includes leakage, incident and compliance activities) Yes No Needs Improvement c. Type of activity being undertaken by operators (i.e. construction) Yes No Needs Improvement d. Locations of operators inspection units being inspected - (HCA's, Geographic areas, Population Density, etc) Yes No Needs Improvement e. Process to identify high-risk inspection units that includes all threats - (Excavation Damage, Corrosion, Natural Forces, Outside Forces, Material and Welds, Equipment, Yes No Needs Improvement Operators and any Other Factors) f. Are inspection units broken down appropriately? Yes No Needs Improvement Evaluator Notes: a. Inspection intervals are at 5 year intervals. b. Operating history is included in their unit inspection risk ranking. c. Procedures include activities undertaken by operator. d. HCA's and population are part of the unit risk ranking. e. Needs to improve on procedure to include all threats for their risk ranking. Procedure does not mention corrosion, excavation damage, outside forces, equipment failure or other factors. f. Units are broken down mostly by operating area for Distribution and by mileage for Transmission. 8 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: B-7 a. Inspection intervals are at 5 year intervals. b. Operating history is included in their unit inspection risk ranking. c. Procedures include activities undertaken by operator. d. HCA's and population are part of the unit risk ranking. e. Needs to improve on procedure to include all threats for their risk ranking. Procedure does not mention corrosion, excavation damage, outside forces, equipment failure or other factors. Total points scored for this section: 12 Total possible points for this section: 13 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 6

PART 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): 5234.00 B. Total Inspection Person Days Charged to the Program (220 X Inspection Person Years) (Attachment 7): 220 X 34.43 = 7574.78 Ratio: A / B 5234.00 / 7574.78 = 0.69 If Ratio >= 0.38 Then Points = 5, If Ratio < 0.38 Then Points = 0 Points = 5 Evaluator Notes: Inspector Person days to total person days ratio is acceptable at 0.69. Compared inspection person-days with the PES database to verify total numbers. 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: a.The RRC has an in house training program for each new inspector. Each inspector goes through the training for atleast 6 months. They accompany another seasoned inspector during the inspections to obtain on the job training. Joey Bass is the training coordinator who monitors each inspectors progress while they are in training. When the inspector is knowledgeable of the pipeline safety program he/she is checked out by an inspector and verified by the Program Manager. The inspectors also attend the required T&Q courses within 3 years. b. Reviewed DIMP/IMP inspections and found that all lead inspectors were qualified. Checked qualifications with SABA database. c. There are several inspectors that have taken the Root Cause training course. d. The RRC has an in house training program which is very lengthy so outside training is not attended. Due to travel funds outside training is limited. e. The RRC has an in house training program for each new inspector. Each inspector goes through the training for atleast 6 months. They accompany another seasoned inspector during the inspections to obtain on the job training. Joey Bass is the training coordinator who monitors each inspectors progress while they are in training. When the inspector is knowledgeable of the pipeline safety program he/she is checked out by an inspector and verified by the Program Manager. The inspectors also attend the required T&Q courses within 3 years. 3 Did state records and discussions with state pipeline safety program manager indicate 2 2 adequate knowledge of PHMSA program and regulations? Chapter 4.1,8.1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: In reviewing Stephanie Weidman's training and discussions she is very knowledgeable of the PHMSA program and regulations. DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 7

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 on 7/22/2105 and Chairman responded on 9/10/2015. no issue with respond time. 2 2 5 Did State hold PHMSA TQ Seminar in Past 3 Years? Chapter 8.5 Yes = 2 No = 0 Evaluator Notes: Yes, last year the seminar was held on 9/15/2015. They hold a seminar every year. 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 Yes = 5 No = 0 Needs Improvement = 1-4 5 4 Evaluator Notes: Reviewed inspection report files in PES and IMP/OQ databases and found several operator inspection intervals which exceeded the 5 year requirements. Specifically in the review there were IMP, OQ and CRM inspections that have exceeded the 5 year inspection interval per their procedures. The RRC has to improve in their inspection intervals and assure that each operator has each type of inspection performed in accordance to their written procedures. 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: Yes, the RRC utilizes their own forms which are comparable with the PHMSA forms. Reviewed inspection reports and found that all applicable portions of the inspection forms were filled out by the inspectors. No issues identified. 8 Did the state review operator procedures for determining if exposed cast iron pipe was 1 1 examined for evidence of graphitization and if necessary remedial action was taken? (NTSB) Chapter 5.1 Yes = 1 No = 0 Evaluator Notes: The RRC utilizes a modified PHMSA distribution form when conducting inspections. The form covers the question and is asked during each inspection. 9 Did the state review operator procedures for surveillance of cast iron pipelines, including 1 1 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: The RRC utilizes a modified PHMSA distribution form when conducting inspections. The form covers the question and is asked during each inspection. 10 Did the state review operator emergency response procedures for leaks caused by 1 1 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: The RRC utilizes a modified PHMSA distribution form when conducting inspections. The form covers the question and is asked during each inspection. DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 8

11 Did the state review operator records of previous accidents and failures including 1 1 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: 192.617 is a line item on the RRC Form for Distribution and Transmission inspections. The form contains this question and is covered by the RRC. recommendations were made to improve procedures by including data elements that inspectors should acquire and review for pre-inspection and pre-investigation activities to ensure history is included in analysis. 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 1 Evaluator Notes: RRC reviews the annual reports during standard inspections and incident reports but do not analyze the data for accuracy, trends and operator issues. The RRC needs to improve by reviewing the annual reports and assuring the accuracy and compare with previous years reports and question any big discrepancies. In addition, incident/accident reports need to be analyzed for any trends and operator issues. 13 Did state input all applicable OQ, DIMP/IMP inspection results into federal database in a 2 2 timely manner? This includes replies to Operator notifications into IMDB database. Chapter 5.1 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: For the OQ, Gas TIMP, and DIMP inspections completed, Tx RRC input these reports into the appropriate PHMSA databases (OQDB, Gas IMDB, DIMP). IM Notifications are being handled in a timely manner and their status communicated to PHMSA for posting the status in the PDM and other public websites. 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 1 1 Evaluator Notes: Form RRC 1 Transmission Inspection form has question to ask during inspection which identified submittals to NPMS. Question is under "PHMSA Requirements" line 26 of excel spreadsheet. 15 Is the state verifying operators are conducting drug and alcohol tests as required by 2 2 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: A drug and alcohol verification inspection is conducted on every inspection. The form is used to verify the operator's MIS information. Drug and Alcohol Program inspections are performed on every operator every 5 years. Procedures require the inspector to conduct a field Drug and Alcohol during every standard inspection. 16 Is state verifying operators OQ programs are up to date? This should include verification 2 2 of any plan updates and that persons performing covered tasks (including contractors) are properly qualified and requalified at intervals determined in the operators plan. 49 CFR 192 Part N Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: TX RRC completed 19 OQ inspections in 2015 that are loaded into the PHMSA OQ DB. Inspections completed use inspection forms that 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 per 49 CFR 192 Part N. The individuals performing these inspections met PHMSA qualification requirements. Tx RRC is not meeting their 5 year re- inspection interval for all intrastate regulated Operator's OQ Plans. DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 9

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: TX RRC completed 1 Gas IM inspection in 2015 that is loaded into the PHMSA Gas IM DB. Inspections completed use inspection forms that include a previous review of IMP plan, along with monitoring progress on operator tests and remedial actions. In addition, the review takes in to account program review and updates of operators plan(s) per 49 CFR 192 Subpart 0. The individuals performing these inspections met PHMSA qualification requirements. Tx RRC is not meeting their 5 year re-inspection interval for all intrastate regulated Operator's IM Plans. 18 Is state verifying operator's gas distribution integrity management Programs (DIMP)? 2 2 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 have been complete by December 2014 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: TX RRC completed 6 DIMP inspections in 2015 that are loaded into the PHMSA DIMP IT DB. Inspections completed use inspection forms that include a review of DIMP plans, along with monitoring progress. In addition, the review takes in to account program review and updates of operators plan(s) per 49 CFR 192 Subpart P DIMP. Tx RRC is still working to complete their First round of DIMP program inspections which should have been complete by December 2014. The individuals performing these inspections met PHMSA qualification requirements. Tx RRC is not meeting their 5 year re- inspection interval for all intrastate regulated Operator's DIMP Plans. 19 Is state verifying operators Public Awareness programs are up to date and being 2 2 followed. State should also verify operators have evaluated Public Awareness programs for effectiveness as described in RP1162. 49 CFR 192.616 (I13-16) PAPEI Effectiveness Inspections should be conducted every four years per RP1162 Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Have conducted 207 total Public Awareness reviews since the implementation of the rule. In CY2015 they performed 29 PAPEI inspections with a total of 87 inspector days. They did not complete the first round of inspections which were supposed to be completed by the end of 2013. The individuals performing these inspections met PHMSA qualification requirements. Tx RRC is not meeting their 5 year re-inspection interval for all intrastate regulated Operator's PA Plans. 20 Does the state have a mechanism for communicating with stakeholders - other than state 1 1 pipeline safety seminar? (This should include making enforcement cases available to public). Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: RRC website has enforcement cases available to the public, provides operator resources such as guidelines for operating small distribution systems, has section for the TAC Code, section for any pipeline safety events coming up, and damage prevention section educating the public. 21 Did state execute appropriate follow-up actions to Safety Related Condition (SRC) Reports? Chapter 6.3 Yes = 1 No = 0 Needs Improvement = .5 1 1 Evaluator Notes: TX RRC executed appropriate follow-up actions to Safety Related Condition (SRC) Reports reviewed during evaluation. 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: DUNS: 028619182 2015 Gas State Program Evaluation 1 1 Texas RAILROAD COMMISSION OF TEXAS, Page: 10

Form RRC-2 Distribution Inspection form has question that covers the plastic pipe and components that have shown a record of defects. 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: Yes, James Mergist responded to ass NAPSR and PHMSA surveys in 2015. 1 1 24 If the State has issued any waivers/special permits for any operator, has the state verified 1 1 conditions of those waivers/special permits are being met? This should include having the operator amend procedures where appropriate. No = 0 Needs Improvement = .5 Yes = 1 Evaluator Notes: Reviewed waivers issued by RRC. PES was currently updated to include the tracking of Waivers. RRC needs to assure that any waivers with requirements are being reviewed during inspections. 25 Did the state attend the National NAPSR Board of Directors Meeting in CY being evaluated? No = 0 Needs Improvement = .5 Yes = 1 Evaluator Notes: James Mergist attended last year's National NAPSR Board Meeting. 1 1 26 Discussion on State Program Performance Metrics found on Stakeholder Communication 2 2 site - http://primis.phmsa.dot.gov/comm/states.htm No = 0 Needs Improvement = 1 Yes = 2 a. Discussion of Potential Accelerated Actions (AA's) based on any negative trends Yes No Needs Improvement b. NTSB P-11-20 Meaningful Metrics Yes No Needs Improvement Evaluator Notes: After reviewing the Texas RRC State Program Performance Metrics found on the PHMSA Stakeholder Communication site with the Program Manager and staff during this evaluation. PHMSA strongly encourages the TXRRC to review these metrics and develop strategies to improve if the metrics are trending in a direction that compromises pipeline safety. 27 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: C.6 Reviewed inspection report files in PES and IMP/OQ databases and found several operator inspection intervals which exceeded the 5 year requirements. Specifically in the review there were IMP, OQ, PAPEI and CRM inspections that have exceeded the 5 year inspection interval per their procedures. The RRC has to improve in their inspection intervals and assure that each operator has each type of inspection performed in accordance to their written procedures. C.12 RRC reviews the annual reports during standard inspections and incident reports but do not analyze the data for accuracy, trends and operator issues. The RRC needs to improve by reviewing the annual reports and assuring the accuracy with previous reports and question any big discrepancies. In addition, incident/accident reports need to be analyzed for any trends and operator issues. Total points scored for this section: 48 Total possible points for this section: 50 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 11

PART D - Compliance Activities Points(MAX) Score 1 Does the state have written procedures to identify steps to be taken from the discovery to 4 4 resolution of a probable violation? Chapter 5.1 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: SOG Section 14.6, 21 has steps to take when alleged violations are identified. Operators are required to submit a Plan of Correction with a date or number of days to correct the plan. The Program Manager approves or disapproves. If approved the operator must submit completion letter. If disapproved the operator must submit an amended plan of correction. All the deadlines are entered into PES and are tracked by PES. A delinquent list is generated by PES and letters are sent out to the delinquent operators. Section 14.2.2 has procedure to send correspondence to company VP. Will add mayor or city manager for municipalities and owner for master meters. 2 Did the state follow compliance procedures (from discovery to resolution) and adequately 4 4 document all probable violations, including what resolution or further course of action is needed to gain compliance? Chapter 5.1 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. Document probable violations Yes No Needs Improvement c. Resolve probable violations Yes No Needs Improvement d. Routinely review progress of probable violations Yes No Needs Improvement e. Were applicable civil penalties outlined in correspondence with operator(s) Yes No Needs Improvement Evaluator Notes: Compliance actions are tracked through the Pipeline Evaluation System (PES) Civil penalties are in statue and there are guidelines for assessment. No issues were identified. 3 Did the state issue compliance actions for all probable violations discovered? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: No instances were found in the random sampling of inspections performed during the evaluation. 2 2 4 Did compliance actions give reasonable due process to all parties? Including "show cause" hearing if necessary. Yes = 2 No = 0 Evaluator Notes: Texas Administrative Code (TAC) 121.206 and 207 has "Shoe Cause" hearing process. 2 2 5 Is the program manager familiar with state process for imposing civil penalties? Were 2 2 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: Program Manager is aware of the civil penalty process. TAC 8.135 is law which states civil penalty actions. A panel consisting of Kari French, Jim Osterhous, and Stephanie Wiedner decide on accessing and the amount of civil penalty. They are now using the state guidelines for the amount of civil penalties. DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 12

6 Can the State demonstrate it is using their enforcement fining authority for pipeline safety violations? Yes = 1 No = 0 Needs Improvement = .5 Evaluator Notes: Yes, issued civil penalties in the amount of $304,125 and collected the entire amount during 2015. 1 1 7 General Comments: Info Only = No Points Evaluator Notes: The RRC is generally complying with Part D of the Evaluation. Info Only Info Only Total points scored for this section: 15 Total possible points for this section: 15 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 13

PART E - Incident Investigations Points(MAX) Score 1 Does the state have written procedures to address state actions in the event of an incident/ 2 1 accident? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the RRC has procedures in their SOG. Section 18.2.1 had changes to describe how decisions will be made to decide whether to conduct an onsite investigation. There is no issue to their procedures. Procedures, Section 19 does not adequately document actions to be taken when no onsite investigation is conducted. 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: Have a 24 hour answering system that transfers calls to on call inspector. Section 18 has incident procedures. On site investigation will be conducted on all reportable incidents which is in section 18.2.1. Have acknowledgement of MOU and of federal/state cooperation in case of an incident/accident. 3 If onsite investigation was not made, did state obtain sufficient information from the 1 0.5 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: The RCT needs to improve their procedures to include the process for obtaining sufficient information from the operator and/ or by other means to determine the facts to support the decision to not conduct an on-site investigation of an incident/ accident. A half point was deducted from both the Gas and Hazardous Liquid Program Evaluations for this issue. While reviewing incident reports there were some instances where there was no sufficient information gathered to understand the full extent of the incident. 4 Were all incidents investigated, thoroughly documented, and with conclusions and 3 2 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: a. RRC documents all observations in PES and on PHMSA Form 11. b. There were no contributing factors being followed up on after the initial investigation. c. The data from failure investigation needs to be integrated with other available information so that actions can be recommended to operators to prevent recurrences of failures. 5 Did the state initiate compliance action for violations found during any incident/accident investigation? Yes = 1 No = 0 Evaluator Notes: Compliance actions/Violations were issued during incident investigations. No issues identified. 1 1 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 14

6 Did the state assist region office by taking appropriate follow-up actions related to the 1 1 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: The RRC did not assist on accident investigations but did stay on site on an interstate until PHMSA inspector was on site. They are also tracking and following up on 30 day reports. 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: Yes, RRC shares information during NAPSR meeting on state of the state presentation. 1 1 8 General Comments: Info Only Info Only Info Only = No Points Evaluator Notes: E.1 Yes, the RRC has procedures in their SOG. Section 18.2.1 had changes to describe how decisions will be made to decide whether to conduct an onsite investigation. There is no issue to their procedures. Procedures, Section 19 does not adequately document actions to be taken when no onsite investigation is conducted. E.3 There needs to be an improvement on obtaining information to determine to not go on site. While reviewing incident reports there were some instances where there was no sufficient information gathered to understand the full extent of the incident. E4. b. There were no contributing factors being followed up on after the initial investigation. c. The data from failure investigation needs to be integrated with other available information so that actions can be recommended to operators to prevent recurrences of failures. Total points scored for this section: 8.5 Total possible points for this section: 11 DUNS: 028619182 2015 Gas State Program Evaluation Texas RAILROAD COMMISSION OF TEXAS, Page: 15

PART F - Damage Prevention Points(MAX) Score 1 Has the state reviewed directional drilling/boring procedures of each pipeline operator or 2 2 its contractor to determine if they include actions to protect their facilities from the dangers posed by drilling and other trench less technologies? NTSB Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The RRC inspection forms includes this question in a PHMSA requirement section within the form. The inspectors ask the question and verify with the operator at each inspection. 2 Did the state inspector check to assure the pipeline operator is following its written 2 2 procedures pertaining to notification of excavation, marking, positive response and the availability and use of the one call system? Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: Yes, the inspectors verify the operators damage prevention activities during each inspection. They verify one call tickets, locates and excavation notifications. 3 Did the state encourage and promote practices for reducing damages to all underground 2 2 facilities to its regulated companies? (i.e. such as promoting/adopting the CGA Best Practices encouraging adoption of the 9 Elements, etc.) Yes = 2 No = 0 Needs Improvement = 1 Evaluator Notes: The TX RRC did outreach in 21 locations in 2015 throughout the state promoting the CGA best practices and state rules and 
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