Iowa Update

1. Iowa Update Beverly Ohman, Safety and Engineering Manager February 26, 2019

2. Outline • Staff • Infrastructure • Inspection Process • Funding • Rulemaking • Incidents

3. Iowa Utilities Board Pipeline Staff • Dave McCann, Inspector • Mike McGehee, Inspector • Dan O’Connor, Inspector • Sanel Lisinovic, Engineer • Magid Yousif, Engineer • Beverly Ohman, Manager

4. 2018 Pipeline Operators * Many are distribution operators and the pipelines are associated with distribution systems, but PHMSA considers separate inspection units.

5. Iowa Pipeline Infrastructure

6. Iowa Distribution Pipeline Miles by Material

7. Historic Inspection Schedule • Standard • One Inspection Unit, every 2 years • Two Inspection Units, one per year • Three Inspection Units or more – all in 3 years • O&M Plan – every three years • PAP, IMP – every four years • LNG – every 2 years • Permitted pipelines – at time of permit renewal • Additional/other/follow-up inspections - as needed • Review of Annual and Incident Reports – as filed

8. Inspection Schedule Modifications • Risk Based Inspections • Highest 10% risk, inspected twice as often • Future: Lowest 10%, reduced frequency • Construction Inspections • Monthly Probable Violation Follow-up

9. Risk Factors • Inspector Input/knowledge obtained from prior inspections. • Prior compliance performance of operators (both the number and severity of prior non-compliances) • Data from annual reports • Prior incident history • Prior leak history • Mileage and HCA mileage • Pipe diameter • Age of pipe • Coating and CathodicProtection • Type of pipe • Time since previous inspection • Number, nature, and age of outstanding compliance issues that remain open • Pipeline system expansion (e.g., new construction, acquisitions, etc.

10. Inspection Methods • Historical • Used PHMSA and IUB Forms • Current • Inspection Assistant and IUB Forms • Future • Risk based, integrated inspections

11. Inspection Results • Verbal Exit Briefing • Report Filed in EFS • Operator Notified Electronically • PHMSA requires notification letter addressed to utility person of authority • Probable Violations and Advisories • Respond in 30 days, encourage visual documentation

12. Utility Response Probable Violations & Advisories • File in EFS • PHMSA encourages utility response be a formal and official filing with the IUB, including: • Be on operator stationary or letterhead, or at least identify the operator • Be signed by a person authorized to speak for the operator • Detailed response including: • List of items corrected, and how • Encourage visual documentation • List of items to be corrected, when and how • Measures to prevent recurrence

13. IUB Verification Probable Violations & Advisories • Inspectors review of utility response and documentation • Unacceptable Responses • We’ll fix it when we get around to it • I’m sure we did it just can’t find a record • You can’t cite me for that – I fixed it before you left • I don’t like the rule • You never cited me for that before • Utility X got away with it • Follow-up inspection • Timing dependent on violation • Corrections verified through review process

14. Pipeline Inspection Costs • Historical • PHMSA reimbursement up to 80% of expenses • Inch mile pipeline charges • Remainder spread across utilities • 2019 • PHMSA reimbursement (~ 60%) • Pipeline Inspection Fees • § 479.14 intrastate removed • § 479A.7 interstate proposed legislation to remove

15. IUB Steps to Control Costs • Preparation • Inspection Assistant Standards • Schedule 2 weeks in advance • Inspection questions shared with utility in advance • Group Inspection types • Audit Results • Iowa maximum 2018 funding: 62.35% • Central Region Average funding: 60.14%

16. Utility Steps to Control Costs • Preparation • Have records readily available • Minimize interruptions • Audit Results • Respond to notification letter within 30 days • Provide visual documentation where possible • Develop measures to prevent reoccurrence

17. IUB Rule Making • Federal pipeline standards are incorporated by reference in IUB rule Chapters 10 and 19 • Industry pipeline standards are incorporated by reference in IUB rule Chapters 10 and 19 • Rulemaking to update references planned for 2019, Docket No. RMU-2018-0003 • Industry standards editions referenced will be consistent with federal rules in 49 CFR 192.7

18. Damage Prevention • Iowa Audit Results • State Enforcement Inadequate in 2016 and 2017 • Awaiting 2018 Audit Results • Federal law now gives PHMSA jurisdiction over excavators and says PHMSA can enforce if state enforcement is “inadequate” • Inadequate states face federal grant penalties • Steps to Address • Reviewing audit results to address deficiencies • Assisting Iowa Attorney General with one call investigations • Requesting large utilities to voluntarily provide more damage prevention details • Reviewing damage prevention trends during DIMP inspections

19. Federal Reportable Incidents Incident means any of the following events: • (1) An event that involves a release of gas from a pipeline, gas from an underground natural gas storage facility, liquefied natural gas, liquefied petroleum gas, refrigerant gas, or gas from an LNG facility, and that results in one or more of the following consequences: • (i) A death, or personal injury necessitating in-patient hospitalization; • (ii) Estimated property damage of $50,000 or more, including loss to the operator and others, or both, but excluding cost of gas lost; or • (iii) Unintentional estimated gas loss of three million cubic feet or more. • (2) An event that results in an emergency shutdown of an LNG facility or an underground natural gas storage facility. Activation of an emergency shutdown system for reasons other than an actual emergency does not constitute an incident. • (3) An event that is significant in the judgment of the operator, even though it did not meet the criteria of paragraph (1) or (2) of this definition.

20. 2018 Federal Pipeline Incidents • LNG Emergency Shutdown • LNG facility suffered a communication loss resulting in the vaporization system shutting down. • Root cause determined to be moisture in the control cabinet resulting in no power to the Ethernet switch • Interstate transmission pipeline excavation damage • An excavator installing drain tile in farmland made contact with and damaged an interstate pipeline. • Root cause was verified to be failure to notify one call prior to performing trenching activities.

21. Iowa Reportable Incidents A utility shall notify the board immediately, or as soon as practical, of any incident involving the release of gas, failure of equipment, or interruption of facility operations, which results in any of the following: • A death or personal injury necessitating in-patient hospitalization. • Estimated property damage of $15,000 or more to the property of the utility and to others, including the cost of gas lost. • Emergency shutdown of a liquefied natural gas (LNG) facility. • An interruption of service to 50 or more customers. • Any other incident considered significant by the utility

22. 2018 Iowa Incidents • Iowa Reportable • 10 total; 6 line hits • Distribution Overpressure • Two Reported • Regulator/Relief Valve issue • Courtesy Calls (thank you) • 24; Many due to media

23. Thank you for your commitment to keeping our communities safe!