1. Pipeline Safety Program Stakeholder Workshop on Proposed Rulemaking PG-160121 – WAC 480-93-240 (Annual Pipeline Fee Methodology - Gas) PL-160122 – WAC 480-75-240 (Annual Pipeline Fee Methodology - Hazardous Liquid) April 20, 2016 9:30 a.m.

2. Agenda Welcome and introductions Review of statutory guidance on fee methodology Consideration of current fee structure and identify areas of concern Discussion of alternative fee methodologies Review of fee structure for alternative fee methodologies Next steps in rulemaking process

3. Review of Statutory Guidance Chapter 480-93 WAC Gas Companies – Safety WAC 480-93-240WAC 480-93-240 Annual Pipeline Safety Fee Methodology RCW 80.24.060RCW 80.24.060 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program Chapter 480-75 WAC Hazardous Liquid Pipelines – Safety WAC 480-75-240WAC 480-75-240 Annual Pipeline Safety Fee Methodology RCW 81.24.090RCW 81.24.090 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program RCW 81.88RCW 81.88Gas and Hazardous Liquid Pipelines RCW 81.88.140RCW 81.88.140 Citizens Committee on Pipeline Safety RCW 19.122.170RCW 19.122.170 Damage Prevention Account – Use of Funds

4. Considerations and Areas of Concern Considerations Miles Hours Master Meters Program Current Fee Methodology and Formula Total Program Cost (Less Federal Reimbursement) = Total Fees distributed across companies Based upon total miles, (indirect cost) plus 2-year total of direct hours (direct program) 480-93 WAC Gas Companies480-75 WAC Hazardous Liquid Pipelines 480-93-240 WAC Annual Pipeline Safety Fee Methodology480-75-240 WAC Annual Pipeline Safety Fee Methodology RCW 80.24.060RCW 80.24.060 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program RCW 81.24.090RCW 81.24.090 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program

5. Current Fee Methodology and Formula

6. Option #1 Options Use Current Fiscal Year Fee Structure Determine Total Number of Units (77) Divide Operations Costs by Number of Units ($471,764 / 77) = 6,126.81 Multiply Each Operator Unit Total by 6,126.81 Two Year Hours by Operator Doesn’t Change Add the Unit Cost to the Hour Cost for Total Annual Fee

7. Option #2 Options Use Current Fiscal Year Fee Structure Determine Total Number of Units (77) Divide Total Fees to the Operator by Number of Units ($999,500 / 77) = 12,982.47 Multiply Each Operator Unit Total by 12,982.47

8. Option #3 Options Use Current Fiscal Year Fee Structure Utilizing the Two Year Total of Hours by Operator Divide Total Fees to the Operator by Number of Hours ($999,500 / 17,886.70) = $55.88 Hour Multiply Each Operator Hours by $55.88

9. Next steps in rulemaking process 480-93 WAC Gas Companies480-75 WAC Hazardous Liquid Pipelines 480-93-240 WAC Annual Pipeline Safety Fee Methodology480-75-240 WAC Annual Pipeline Safety Fee Methodology RCW 80.24.060RCW 80.24.060 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program RCW 81.24.090RCW 81.24.090 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program

10. Questions on process, methodology, timeline, etc.? Questions? 480-93 WAC Gas Companies480-75 WAC Hazardous Liquid Pipelines 480-93-240 WAC Annual Pipeline Safety Fee Methodology480-75-240 WAC Annual Pipeline Safety Fee Methodology RCW 80.24.060RCW 80.24.060 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program RCW 81.24.090RCW 81.24.090 Pipeline Safety Fee – Procedure to Contest Fees – Regulatory Incentive Program