1. 2014 48 th KGA Annual Meeting Owensboro, KY June 6, 2014

2. Pipeline Safety Staff Commission Cases State/Federal Partnership Inspections Other Activities 2014 Outlook TOPICS

3. To foster the provision of safe and reliable service at a reasonable price to the customers of jurisdictional utilities while providing for the financial stability of those utilities by setting fair and just rates, and supporting their operational competence by overseeing regulated activities. Focus: Safety is the priority, not just compliance! PSC’s MISSION

4. Engineering Division –Kyle Willard, Division Director – James Rice, Assistant Director –Gas and Pipeline Safety Branch –Jason Hurt, Manager –Gary Glover, Engineering Tech. –Bill Aitken, Senior Utility Investigator –Melissa Holbrook, Utility Investigator –Steve Samples, Utility Investigator –Joel Grugin, Utility Investigator – Mark McCullough, Utility Investigator PIPELINE SAFETY BRANCH

5. Pipeline Safety Program –1970: Selected by General Assembly as the state agency to enforce the federal pipeline safety standards –U.S. DOT and PSC Partnership U.S. DOT reimburses state agency up to 50% of personnel, equipment, and operating costs incurred in carrying out a safety program for intrastate pipeline facilities under a certification or agreement Certification – State must adopt the minimum Federal regulations and provide for injunctive and monetary sanctions (enforcement) substantially the same as those authorized by the pipeline safety statutes. Agreement – Inspection of pipeline operators to ascertain compliance with Federal safety regulations, any probable violations are reported to OPS for enforcement action. PSC’s ROLE

6. Kentucky Administrative Regulations –807 KAR 5:022 – Gas Safety and Service 5:026 – Gas Service; Gathering Systems 5:027 – Gas Pipeline Safety; Reports of Leaks Kentucky Revised Statutes –278.470-278.502 Oil and Gas Pipelines and Related Facilities 278. 485 – “Farm Tap Regulation” 278.495 – Authority to regulate master meters –278.504-278.508 Natural Gas STATE REGULATIONS

7. STATE JURISDICTION NATURAL GAS DistributionNumber of Operators Private32 (67 units) Municipal51 Master Meter116 Transmission Intrastate32 Gathering Jurisdictional4 Total235 (270 units)

8. Operator Inspection Compliance and Enforcement Training and Safety Programs Accident Investigations Construction Inspections Farm Tap Inspections Record Maintenance and Reporting Assistance to OPS in special situations –Interstate pipeline incident site investigation –Inspection on interstate pipeline construction projects RESPONSIBILITIES

9. Operator Type Operation and Maintenance Investigating Incident Design, Testing, and Construction On-Site Operator Training Total Inspection Person - Days StandardSpecializedFollowup Distribution Private1066918365188 Municipal685416384 MM47121400073 LPG0000000 LNG0000000 Other0000000 Transmission Intrastate350103039 Interstate0000000 Gathering603033042 Other Total2712331191090426 2013 INSPECTION ACTIVITY

10. An Inspection normally begins in the office with a review of records and documents relating to the operation of the pipeline facilities. Records reviewed may include: –Operations and Maintenance Manual –Emergency Plan –Public Awareness & Effectiveness and Damage Prevention Program – DIMP –Operator Qualification Program –Drug and Alcohol Plans –Leak Surveys and Repairs –Valve Inspections –Patrolling Records –Corrosion Control Records PERIODIC INSPECTIONS

11. Following the office segment, a field review is conducted. The field review may include inspection of the following: –Regulator Settings –Odorant Testing –Regulator Stations –Mainline Valve Locations –Pipeline Markers –Meter Installations – OQ Protocol 9 PERIODIC INSPECTIONS

12. Schedule inspection with utility (3-yr cycle) Perform office and field Inspection/review Document any deficiencies, recommendations, or findings Prepare report of inspection, reviewed by PSC staff and sent to Operator –Report will include any noted deficiencies, as well as recommendations –A Deficiency Tracking Report (DTR) is generated for each deficiency PSC INSPECTION PROCESS

13. Operator is requested to reply to each DTR –Why deficiency occurred –Actions taken to correct –Actions taken to prevent recurrence Responses reviewed by branch –Accept or Reject –Follow-up letter sent to operator Follow-up inspection possible Safety is primary goal, not just compliance DEFICIENCY TRACKING REPORTS

14. 2013 Top 10 PSC Deficiencies 1. Public Awareness 2. DIMP 3. Operator Qualification 4. Not inspecting critical valves as required 5. Not conducting Odorant test 6. Not having proper records 7. Not conducting Regulator Inspections 8. 192.725 not properly testing disconnected service lines 9. Issues with Leakage Survey 10. Patrolling

15. –Frequent deficiencies noted by Commission inspectors are related to record keeping. –If a record is not available or a task cannot be substantiated by the operator, generally, a deficiency is noted. –Records and documents are “proof” to the inspector that an operator is complying with regulations. FREQUENT DEFICIENCIES

16. 807 KAR 5:006 Sec 26(3) Appropriate records shall be kept by a utility to identify the inspections made, the date and time of inspection, the person conducting the inspection, deficiencies found, and action taken to correct the deficiencies.

17. 807 KAR 5:006 Sec 5(a)(2) Section 5 – Gas utility inspection. A gas utility shall make systematic inspections of its system to insure that the commission’s safety requirements are being met.

18. 807 KAR 5:006 Sec 5(a)(2) (a) The following maximum time intervals shall be established for certain inspections: (2) At intervals not to exceed three (3) years, gas meters shall be manually inspected and visually examined for proper working condition

19. Manually Inspected & Visually Examined Up to the utility “Proper working condition” Aspects to ensure safety and adequacy of service What do you currently do? Remove/replace meter for testing/servicing Leak surveys Corrosion inspections Meter reader only?

20. NTSB Supplemental Questions

21. Pipeline Safety

22. NTSB MOST WANTED LIST 2014 ENHANCE PIPELINE SAFETY High pressure natural gas pipeline failures frequently result in explosive releases that, if ignited, become intense “jetfires” that can cause extensive damage. Safe operation of natural gas and hazardous liquid transmission pipelines is a shared responsibility among the operator, government oversight agencies, and local communities.

23. Natural gas pipeline rupture and fire caused by corrosion and lack of recent inspections, NTSB determines The 2012 rupture of a Columbia Gas Transmission Corporation natural gas pipeline in West Virginia was caused by external corrosion that could have been discovered by the pipeline operator, the National Transportation Safety Board said in a report released today. On December 11, 2012, a 20-inch high-pressure natural gas pipeline running through Sissonville, W.V., ruptured with so much force that a 20-foot-long segment of pipe was thrown more than 40 feet from where it had been buried. The released natural gas ignited and burned so hot that it heavily damaged the asphalt road surface on an interstate highway, destroyed three homes, and melted the siding on houses hundreds of feet from the rupture site.

24. Gas explosion and subsequent fire The National Transportation Safety Board has launched a go-team to investigate a gas explosion and subsequent fire in New York City. Pipeline Investigator Ravi Chhatre is leading the team as investigator-in-charge. Board Member Robert L. Sumwalt is accompanying the team and will serve as the principal spokesman during the on-scene phase of the investigation.

25. NTSB Issues Investigative Update for East Harlem, N.Y., Gas Explosion WASHINGTON – As part of its ongoing investigation into a March 12 gas explosion that destroyed two buildings in the East Harlem section of New York City, the NTSB today released an investigative update. The NTSB sent a go-team to the accident, and still has investigators on-scene. The 8-inch cast iron/plastic main on Park Avenue between 116th and 117th streets failed the pressure test at the normal operating pressure. Tracer gas pumped into the main and a leak survey identified a leak adjacent to 1646 Park Avenue, one of the collapsed buildings. Two service line segments (one about 20-feet long, the other about 3-feet long) recovered in the basements of the destroyed buildings at 1644 and 1646 Park Avenue have been removed and tagged as NTSB evidence. Items will be shipped to the NTSB laboratory in Washington. Pressure testing of the service lines to buildings on Park Avenue adjacent to the destroyed buildings continues with no significant findings to date. ConEdison and the city are working to restore gas service to the adjacent buildings.

26. Body found in rubble of New Jersey condo gas explosion; 7 injured

27. Kentucky gas pipeline explodes; levels homes, injures 2, leaves crater

28. Reporting Requirements In the event of an accident or emergency that may possibly relate to natural gas, hazardous liquid or propane as its origin, the following action is required: Telephonic notice at the earliest possible moment (not to exceed two hours) following discovery of: Death or Personal Injury Gas Igniting Unintentionally Damage to Property ($25,000 or more) Unscheduled Outage for 40 or More Customers for 4 or More Hours Any Other Significant Occurrence (i.e. Newsworthy) This reporting does not relieve you of your responsibility of reporting to the U.S. Department of Transportation (DOT) in accordance with 49 CFR Part 191.5.

29. OTHER ACTIVITIES National Association of Pipeline Safety Representatives (NAPSR) –Regional Meeting –National Meeting Mandatory PHMSA T&Q Training –Oklahoma City, Oklahoma –3 Years to complete PHMSA T&Q Seminar PHMSA Annual Audit Central KY Damage Prevention Council Eastern KY Damage Prevention

30. OTHER ACTIVITIES Kentucky 811 Kentucky Gas Association (KGA) –Annual Conference –Committee Meetings –Attendance and Presentations –Education Committee Coordinate educational activities for betterment natural gas industry Promote education and training of natural gas industry

31. 2014 Outlook Protocol 9 OQ DIMP Inspections Public Awareness Effectiveness Inspection Operator Training Gathering Construction

42. Questions? Melissa Holbrook Pipeline Safety Investigator Cell: 502-229-7542 melissac.holbrook@ky.gov