D'ocket No. Caption 9828 Inquiry into the failure of Atmos Energy Corp., Mid-Tex Division to comply with safety standards 5/19/20091 Stipulation, Agreed Settlement and Consent Order Roll No. Blip No. RAILROAD COMMISSION OF TEXAS GAS SERVICES DIVISION GAS UTILITIES DOCKET DOCKET # 08-09828 PERMIT # ACTIVE: YES PROTESTED: NO APPLICANT # AND NAME: 6776 ATMOS ENERGY CORP., MID-TEX DIVISION REPRESENTATIVE NAME: Mr. Charles Yarbrough, II PHONE: (214) 206-2809 P. O. Box 650205 CITY CODE Dallas, , TX. 75265 0000 EXAMINER: SUFFIX CODES:(1) JE APPLICATION STATUS: MOTION FOR REHEARING: (2) APPLICATION FILED: NOTICE OF HEARING ISSUED: AMENDED NOH ISSUED: PRE-HEARING CONFERENCE: TRANSCRIPT RECEIVED: PETITION TO INTERVENE DUE: EXCEPTIONS DUE: EXCEPTIONS RECEIVED: REPLIES DUE: REPLIES RECEIVED: ORAL ARGUMENT: SUSPENSION ORDER: INTERIM ORDER SIGNED-1: INTERIM ORDER SIGNED-2: FINAL ORDER ISSUED: MFRH RECEIVED-l: MFRH RECEIVED-2: REPLIES TO MFRH DUE: REHEARING GRANTED: ORDER AFTER MFRH: APPEAL: SUBJECT TEXT REMARKS: . ff (3) 09/24/08 CO EXAMINER: SUMMARIZE: YES NOTICE NUMBER MULTIPLE ORDERS RELATED CASES HEARING HOURS HEARING: HEARING CANCELLED: BRIEFS DUE: BRIEFS RECEIVED: PROPOSAL FOR DECISION DUE: PROPOSAL ISSUED: CONFERENCE: ADMIN CLOSED: CONFERENCE (INTERIM ORDER): CONFERENCE (MHR) : SOI 35TH DAY : SOI SUSPENDED: SOI 150TH DAY/SUSP.: SOI PARTICIPATE REC: 185TH DAY/APPEAL: RESP. TEST. / EXH. DUE : RESP. TEST. / EXH. REC: INT. TEST. / EXH. DUE : INT. TEST. / EXH. REC: APPL. TEST / EXH. DUE : APPL. TEST. / EXH. REC: Inquiry into the Failure of Atmos Energy Corp., Mid-Tex Division to Comply with Safety Standards. (Filed by: Commission's Own Motion) / / / / MICHAEL L. WILLIAMS, CHAIRMAN LINDIL C. FOWLER, JR., GENERAL COUNSEL VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LOWELLE. WILLIAMS, DIRECTOR .CNFOR(7MENT SECTION F RAILROAD COMMISSION O TEXAS^^^^':, OFFICE OF GENERAL COUNSEL December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin,.Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective Apri12, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3.1(a)(8), amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued against you without further notice. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AuSTIN, TExns 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAx: 512/463-6989 http://www.rrc.state.tx.us Notice of Opportunity for Hearing, Oil & Gas Docket No. GUI) Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. • Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attorneys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUIRE THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by January 16, 2009, I will recommend that the Commission settle this case with an agreed settlement order. Checks should be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotch4ss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 " Bi11 Drury, Legal Assistan Office of General Counsel` - Enforcement Railroad Commission of Texas (512) 463-6858 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel yEnforcement Railroad Commission of Texas (512) 463-6858 RAILROAD COMMISSION OF TEXAS ^^ GAS UTILITIES DOCKET NO. 08-9828: ENFORCEMENT ACAOI^'AGAI^ST, ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036540)I^T,;^1O. 67^6), FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFET^'^^i:;^49r.CFR ^^^ §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNE`.^^"&5^f SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR §192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. §121.201 et seq. and §121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facility as defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company of Atmos Energy Corp., Mid-Tex Division, subject to 16 TEX. ADMIN. CODE §8.5(11). Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. § 121.201 (a)(1) and 16 TEX. ADMIN. CODE §8.1 (Tex. R.R. Comm'n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated § §60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. 2. The notice of hearing required under Commission Rule §1.45 [16 TEX. ADMIN. CODE § 1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. §91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], provides that: "(c) Each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the Commission's Gas Services Division conducted Safety Evaluation No. 2008-0829 on the McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch ofthe hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade 1 leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. There were several access points to the sewer in the immediate area, including a large manhole in the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand dug. M.J. Sheridan did not hand dig within 12 inches of the existing main. 5. By failing to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1] at its McKinney Unit 3397 gas distribution system (System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: 1. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 S MICHAEL L. WILLIAMS, CHAIRMAN VICTOR G. CARRILLO, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, DIRECTOR ELIZABETH A. JONES, COMMISSIONER ENFORCEMENT SECTION RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL May 19, 2009 Daniel R. Renner Clark, Thomas & Winters P.O. Box 1148 Austin, TX 78767 Re: GAS UTILITIES DOCKET NO. 09828 Dear Mr. Renner: Enclosed,please find a copy of the Stipulation, Agreed Settlement and Consent Order, in the above mentioned docket, approved by the Commissioners on May 19, 2009. This matter is now closed. Sincerely, J ..y=' ^ Bill Drury Legal Assistant Office of General Counsel - Enforcement (512) 463-6858 cc: Mary McDaniel, GUD Kim Williamson, RRC Secretary Public Information Office Pat Kaiser, Enforcement File 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * AUSTIN, TEXAS 78711-2967 * POST OFFICE Box 12967 AN EQUALOPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAX: 512/463-6989 http://www.rrc.state.tx.us RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER On this the / rM day of ?'^lQwj , 2009, the above-entitled and numbered docket came on for consideration by the Railroad Commission of Texas ("Commission"). The Commission and Atmos Energy Corp.., Mid-Tex Division ("Atmos") have agreed to an informal disposition of the matters under this docket through this Stipulation, Agreed Settlement and Consent Order ("Order"). The Commission has authority to informally dispose of this contested case docket through a Consent Order pursuant to TEx. Gov'T CODE ANN. § 2001.056(3). IN COMPROMISE AND SETTLEMENT OF THIS DOCKET, the Commission and Atmos do hereby agree and stipulate as follows: 1. Atmos is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2 For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos is a person as that term is defined by Title 16, Section 7.70(b)(1) of the Texas Administrative Code. 3. The Atmos distribution system is a pipeline facility as defined by Title 16, Section 7.70(b)(4) of the Texas Administrative Code. 4. Atmos owns and operates the subject pipeline facility, subject to Title 16, Section 7.70(b)(5) of the Texas Administrative Code. 5. The Commission and Atmos agree that the alleged violation as set forth in GUD Docket No. 09828, regarding Pipeline Safety Evaluation No. 2008-0829, is hereby settled and compromised under the terms of this Order. This Order affects no other matters. The alleged violation by Atmos constitutes an alleged violation of the provisions of Chapter 121 of the Texas Utilities Code or a safety standard or rule relating to pipeline facilities adopted thereunder. 7. Neither this Consent Order, nor any written or oral offer of settlement related thereto, nor any statement contained therein shall constitute evidence or an admission or adjudication of. (A) any fact or conclusion of law alleged in or relating to GUD Docket No: 09778; (B) any violation of any statute, rule or regulation or other wrongdoing or misconduct on t part of Atmos or any director, officer, agent, employee, contractor or affiliate thereof. he Commission shall not use this Order, any offer of settlement relating thereto, no - e Investigation as the basis for the institution of any further administrative or enforcement proceedings. 8. Atmos makes no admission of any alleged violation, but wishes to address the Commission's concerns under the terms of this Order. 9. The Commission wishes to further the goals of safety and the prevention and control of pollution within the State of Texas. 10. The Commission has considered any history of previous violations under Chapter 121 of the Texas Utilities Code by Atmos, the seriousness of any alleged violation, and any hazard to the health or safety of the public, and has determined that the facts of this case warrant an informal disposition of the Commission's concerns under the terms of this Order. 11. An opportunity for public hearing regarding the above entitled and numbered docket was given to Atmos, and Atmos has elected not to avail itself of the opportunity for public hearing. 12. The Commission has jurisdiction to assess an administrative penalty against Atmos, pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 13. The alleged violation as set forth in Gas Utilities Docket No. 09828, regarding Safety Evaluation No. 2008-0829, has been placed into compliance by Atmos with the requirements of TEX. UTIL. CODE ANN. § 121.201 et seq., and Title 16, Chapter 7, of the Texas Administrative Code. 14. An administrative settlement penalty in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00) shall be recovered by the Commission for the alleged violation asserted against Atmos, as the operator of the subject pipeline facility. 15. Atmos has placed into the possession of or has caused to be placed into the possession of the Commission, funds in the amount ofTWENTY SIX THOUSAND DOLLARS ($26,000.00), for deposit in the General Revenue Fund, as payment of administrative penalties assessed. 16. The person signing hereunder for Atmos has authority to represent Atmos in this matter. Jurisdiction of the Commission over this docket having been established, and based upon the agreement of the parties, it is, therefore, ORDERED by the Railroad Commission of Texas, that Atmos is assessed administrative penalties in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00), and that Gas Utilities Docket No. 09828 be informally disposed by this Order and closed. Done this /q'J'"4 day of rn- 2009. RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixeo, by Master Agreed Order dated 111a4-,-7 /y , 2009.) APPROVED AS TO FORM AND SUBSTANCE: Atmos Energy Corp., Mid-Tex Division Title: RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL MASTER AGREED ORDER MAY 19, 2009 At a conference held at its offices in Austin, Texas, the Commission finds that after statutory notice, the following enforcement Stipulation, Agreed Settlement and Consent Orders were considered. The Orders prepared for the following dockets are incorporated by reference into this Order, and by approval of this Master Agreed Order, the Commission approves the referenced Stipulation, Agreed Settlement and Consent Orders and adopts the stipulations and agreements contained therein. DOCKET NO. OPERATOR ORDER TERMS 02-0259879 B. P. Productions, Inc. (Operator No. 040797) $2,000.00 Penalty Paid P-4 transferred to bonded operator. 06-0258459 Cass Energy, L.L.C. (Operator No. 139618) $1,500.00 Penalty Paid H-15 test approved. 7C-0252087 R & R Well Service, Inc. (Operator No. 687467) $500.00 Penalty Paid Well plugged. 09-0260430 Rogers Drilling Company (Operator No. 724980) $1,000.00 Penalty Paid 01-0255639 Sign posted and report filed. More Texas Oil (Operator No. 584487) P-4 transferred to bonded operator. 02-0261179 38 Oil & Gas, LLC (Operator No. 953768) $500.00 Penalty Paid H-15 approved. 02-0259880 B. P. Productions, Inc. (Operator No. 040797) P-4 transferred to bonded operator. B. P. Productions, Inc. (Operator No. 040797) P-4 transferred to bonded operator. 01-0259492 USA Superior Energy, LLC (Operator No. 879269) $2,500.00 Penalty Paid Certificate of compliance was reissued. 02-0260208 Texcom Operating, LLC (Operator No. 848481) $1,250.00 Penalty Paid Completion report filed. 7C-0244993 TKP Petroleum, Inc. (Operator No. 860891) $2,500.00 Penalty Paid Well plugged. 02-0259881 $3,250.00 Penalty Paid $2,000.00 Penalty Paid $3,000.00 Penalty Paid MASTER AGREED AER MAY 19, 2009 CONFERENCE PAGE 2 • DOCKET NO. OPERATOR ORDER TERMS 7B-0261211 Ridge Oil Company (Operator No. 711100) $250.00 Penalty Paid H-15 conducted and submitted. 03-0260434 K.O.C. Corporation (Operator No. 448941) $2,500.00 Penalty Paid Site remediated. 02-0252219 Red Fork Production, L.L.C. (Operator No. 697024) $2,500.00 Penalty Paid Well plugged, H-15 reportfiled and signs posted. 7B-0258683 Borden, Roland, Inc. (Operator No. 082982) $1,750.00 Penalty Paid Well plugged. 04-0257471 Pyle Petroleum, Inc. (Operator No. 683968) $1,500.00 Penalty Paid H-15 approved. 04-0260302 Future Petroleum Co., L.L.C. (Operator No. 291678) $1,500.00 Penalty Paid Completion report filed and signs posted. 06-0258128 Evergreen Operating Co., LTD (Operator No. 256491) $2,250.00 Penalty Paid Site remediated & casing head gas now being measured and reported. 7B-0260510 Sojourner Drilling Corporation (Operator No. 800750) $1,875.00 Penalty Paid Site remediated and P-4 reissued. 03-0256773 L. C. Smith Production (Operator No. 793130) $2,000.00 Penalty Paid H-15 test conducted. 06-0260784 Southwest Operating, Inc. - Tyler (Operator No. 806415) $1,000.00 Penalty Paid Well plugged and W-3 approved. LP-Gas 1992 WTG Fuels, Inc. $500.00 Penalty Paid All violations were corrected. ESVs and internal value works correctly. LP-Gas 2013 Wylie L.P. Gas, Inc. $500.00 Penalty Paid Re-inspection - all violations corrected. LP-Gas 2015 B & M Supply & Gas Co. $500.00 Penalty Paid Re-inspection with company letter. LP-Gas 2018 Amerigas Propane L.P. $500.00 Penalty Paid Tank moved. LP-Gas 2036 Amerigas Propane L.P. $500.00 Penalty Paid Obtained license. MASTER AGREED AER MAY 19, 2009 CONFERENCE PAGE 3 • DOCKET NO. OPERATOR ORDER TERMS LP-Gas 2047 Lamesa Butane Company $500.00 Penalty Paid Container reset to comply with RRC rules. GUD 9793 Royal Production Company, Inc. $5,500.00 Penalty Paid Management plan in place. GUD 9804 Utility Board of Falfurrias $500.00 Penalty Paid Conducting timely inspections of pressure regulating system and equipment. GUD 9828 Atmos Energy Corp., Mid-Tex Div. $26,000.00 Penalty Paid Operator brought system into compliance. GUD 9848 Empire Pipeline Corporation $5,000.00 Penalty Paid Operator submitted plan of correction for future events. 000565 000596 000599 000608 000633 001132 001133 001208 001353 001513 001589 001670 001720 001732 001743 001892 001966 001993 002045 002133 002340 002365 002393 002451 002491 002639 002659 002660 002720 Verizon Verizon Verizon Verizon Verizon Verizon Verizon Verizon Verizon Verizon Verizon City of Grand Prairie Water Utilities City of Corpus Christi Wastewater Dept. City of Grand Prairie City of Grand Prairie City of Denton (Street Dept.) Texas Gas Services Company City of Del Rio Water Dept. Brazos Valley Services City of Grand Prairie B C S Electric $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 50.00 Penalty Paid $ 250.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid. $ 600.00 Penalty Paid $ 250.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 300.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 250.00 Penalty Paid $ 300.00 Penalty Paid $ 50.00 Penalty Paid $ 250.00 Penalty Paid $ 300.00 Penalty Paid $ 50.00 Penalty Paid CPS Energy Centerpoint Energy Entex Texas Gas Service Company Brazos Valley Services Luzer Electrical City of Corpus Christi Gas Dept. City of Hondo TCH MASTER AGREED *ER MAY 19,2009 CONFERENCE PAGE 4 DOCKET NO. 002791 002875 003051 003065 003131 003170 003175 003211 003218 003264 003275 003320 003323 003340 003343 003345 003355 003369 003375 003385 003392 003397 003406 003420 003430 003433 003442 003453 003459 003475 003479 003491 003496 003518 003521 003522 003527 003564 003576 003581 003583 003594 003598 003604 003612 003636 003648 003658 003670 OPERATOR City of Weatherford Sendero Industries, LLC "Henkels & McCoy PM Construction Bryan Texas Utilities City of University Park Dallas Water Utilities City of Temple Utilities P M Construction Verizon City of Cleburne Texas Sterling Construction Willis Electric Company Atmos Energy Corp., Mid-Tex Div. CPS Energy Weimer Construction Atmos Energy Corp., Mid-Tex Div. City of Houston Red Line Services CWI City of Houston Atmos Energy Corp., Mid-Tex Div. Four T Construction, Inc. Parkside Construction R W L Construction City of Temple Utilities CPS Energy Texas Gas Services Company Texas Gas Services Company Team Fishel Texas Gas Services Company City of Hillsboro Verizon TWS Denton All Texas Electrical Brazos Valley Services Base Construction L.L.P. Carlos Silva City of Grand Prairie Elk Electric Jimerson Underground Bowman Electric San Antonio Water System Atmos Energy Corp., Mid-Tex Div. Conn & Sons Construction, Inc. Plumbing Plus Koepp Enterprize Atmos Energy Corp., Mid-Tex Div. Austin Water Utility SLC Services, LTD • ORDER TERMS $ 50.00 Penalty Paid $ 100.00 Penalty Paid $ 250.00 Penalty Paid $ 450.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 50.00 Penalty Paid $3,000.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 250.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid MASTER AGREED *ER MAY 19, 2009 CONFERENCE PAGE 5 • DOCKET NO. OPERATOR ORDER TERMS 003693 003699 003702 003712 003713 003714 003720 003721 003726 003727 003729 003731 003736 003738 003739 003743 003744 003747 003750 003753 003756 003757 003759 003763 003767 003770 003773 003775 003778 003779 003781 003783 003784 003789 003792 003794 003796 003798 003799 003800 003802 003808 003810 003817 003820 003824 003825 003826 003827 J.T. Fencing Co. M Wooton Construction Alm Interests Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Texcon General Contractor American Eagle Plumbing Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Angel Brothers Enterprises, LTD Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Deerwood Construction, Inc. Royal Vista Inc. Atmos Energy Corp., Mid-Tex Div. Southland Fence & Supply Co. North Houston Pole Line Atmos Energy Corp., Mid-Tex Div. Palo Duro Diversified Utilities Texas Gas Service Company Texas Gas Service Company Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. City of Brenham Southwest Texas Munic Gas Corp. Atmos Energy Corp., Mid-Tex Div. City of Abilene $ 500.00 Penalty Paid $ 300.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 250.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $ 550.00 Penalty Paid $ 50.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid $ 500.00 Penalty Paid $ 50.00 Penalty Paid $1,000.OOPenalty Paid Houston Stafford Electric Atmos Energy Corp., Mid-Tex Div. EDP ,Atmos Energy Corp., Mid-Tex Div. City of Marble Falls Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. City of Sherman Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. City of Amarillo John Dooley Plumbing Lupe Rubio Construction Custom Trench City of Abilene Atmos Energy Corp., Mid-Tex Div. City of Sulphur Springs-REC Atmos Energy Corp., Mid-Tex Div. MASTER AGREED *ER MAY 19,2009 CONFERENCE PAGE 6 • DOCKET NO. OPERATOR ORDER TERMS 003829 003831 003832 003836 003846 003847 Atmos Energy Corp., Mid-Tex Div. Future Fence and Deck Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. La Utilities, Inc. Atmos Energy Corp., Mid-Tex Div. $1,000.00Penalty Paid $ 50.00 Penalty Paid $ 500.00 Penalty Paid $ 500.00 Penalty Paid $ 550.00 Penalty Paid $ 550.00 Penalty Paid • MASTER AGREED AER MAY 19, 2009 CONFERENCE. PAGE 7 IT IS ORDERED that each referenced Stipulation, Agreed Settlement and Consent Order shall become effective when this Order is signed and that a copy of this Order shall be affixed to each Stipulation, Agreed Settlement and Consent Order. Done in Austin, Texas on MAY 19, 2009. RAILROAD COMMISSION OF WXAS ISSIONER MICHAEL L. WILLIAMS AGREED ORDERS, OTHER THAN 14 B)(2) ^ VIOLATTON''S: , _ . A1/ . a-^V/ OtA^ ie2°'.t +i (70 --,^^^^^^ 'Lu- COMPLL4rTCE DATE: ^t.;^^^,^^^ ^^<. ^^^C..e^. PENALTY PAIU: $ Uo.^^ REMARKS: STAFF :A.TTORNEY: . ^ ^ ^"^ LEGAL AESISTANT:^ RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER On this the day of , 2009, the above-entitled and numbered docket came on for consideration by the Railroad Commission of Texas ("Commission"). The Commission and Atmos Energy Corp., Mid-Tex Division ("Atmos") have agreed to an informal disposition ofthe matters under this docket through this Stipulation, Agreed Settlement and Consent Order ("Order"). The Commission has authority to informally dispose of this contested case docket through a Consent Order pursuant to TEx. Gov'T CODE ANN. § 2001.056(3). IN COMPROMISE AND SETTLEMENT OF THIS DOCKET, the Commission and Atmos do hereby agree and stipulate as follows: 1. Atmos is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos is a person as that term is defined by Title 16, Section 7.70(b)(1) of the Texas Administrative Code. 3. The Atmos distribution system is a pipeline facility as defined by Title 16, Section 7.70(b)(4) of the Texas Administrative Code. 4. Atmos owns and operates the subject pipeline facility, subject to Title 16, Section 7.70(b)(5) of the Texas Administrative Code. 5. The Commission and Atmos agree that the alleged violation as set forth in GUD Docket No. 09828, regarding Pipeline Safety Evaluation No. 2008-0829, is hereby settled and compromised under the terms of this Order. This Order affects no other matters. 6. The alleged violation by Atmos constitutes an alleged violation of the provisions of Chapter 121 of the Texas Utilities Code or a safety standard or rule relating to pipeline facilities adopted thereunder. 7. Neither this Consent Order, nor any written or oral offer of settlement related thereto, nor any statement contained therein shall constitute evidence or an admission or adjudication of: (A) any fact or conclusion of law alleged in or relating to GUD Docket No: 09778; • (B) any violation of any statute, rule or regulation or other wrongdoing or misconduct on the part of Atmos or any director, officer, agent, employee, contractor or affiliate thereof. The Commission shall not use this Order, any offer of settlement relating thereto, nor the Investigation as the basis for the institution of any further administrative or enforcement ,proceedings. 8. Atmos makes no admission of any alleged violation, but wishes to address the Commission's concerns under the terms of this Order. 9. The Commission wishes to further the goals of safety and the prevention and control of pollution within the State of Texas. 10. The Commission has considered any history of previous violations under Chapter 121 of the Texas Utilities Code by Atmos, the seriousness of any alleged violation, and any hazard to the health or safety of the public, and has determined that the facts of this case warrant an informal disposition of the Commission's concerns under the terms of this Order. 11. An opportunity for public hearing regarding the above entitled and numbered docket was given to Atmos, and Atmos has elected not to avail itself of the opportunity for public hearing. 12. The Commission hasjurisdiction to assess an administrative penalty against Atmos, pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 13. The alleged violation as set forth in Gas Utilities Docket No. 09828, regarding Safety Evaluation No. 2008-0829, has been placed into compliance by Atmos with the requirements of TEX. UTIL. CODE ANN. § 121.201 et seq., and Title 16, Chapter 7, of the Texas Administrative Code. 14. An administrative settlement penalty in the amount of TWENTY SIX THOUSAND DOLLARS ( $26,000.00) shall be recovered by the Commission for the alleged violation asserted against Atmos, as the operator of the subject pipeline facility. 15. Atmos has placed into the possession of or has caused to be placed into the possession of the Commission, funds in the amount of TWENTY SIX THOUSAND DOLLARS ( $26,000.00), for deposit in the General Revenue Fund, as payment of administrative penalties assessed. 16. The person signing hereunder for Atmos has authority to represent Atmos in this matter. Jurisdiction of the Commission over this docket having been established, and based upon the agreement of the parties, it is, therefore, ORDERED by the Railroad Commission of Texas, that Atmos is assessed administrative penalties in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00), and that Gas Utilities Docket No. 09828 be informally disposed by this Order and closed. Done this day of , 2009. RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by Master Agreed Order dated APPROVED AS TO FORM AND SUBSTANCE: Atmos Energy Corp., Mid-Tex Division B Title: , 2009.) CLARK, THOMAS & WINTERS'"`' t A PROFESSIONAL CORPORATION TELEPHONE (512) 472-8800 POST OFFICE BOX 1148 FAX (512) 474-1129 AUSTIN, TEXAS 78767 300 WEST 6'" STREET, 15''H FLOOI2 AUSTIN, TEXAS 78701 January 22, 2009 Via Hand Delivery Mr. Christopher S. Hotchkiss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Avenue, 12th Floor Austin, Texas 78701 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 36589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS Dear Mr. Hotchkiss: Pursuant to our earlier conversation, enclosed herewith is an executed Stipulation, Agreed Settlement and Consent Order in connection with the above-referenced docket. I have also enclosed Atmos Energy Corp.'s check in the amount of Twenty-Six Thousand Dollars ($26,000.00) which covers the administrative penalty concerning the alleged violation in this matter. Thank you for your attention to this matter. Please contact me if you have any additional questions. Very truly yours, Daniel R. Renner DRR:ssm Enclosures cc: Ellen Weaver W:ER2 t09593 Ck1ECK, CHECK NUMBE ;>::.CHEEK AMOUNT i t j: ^:^l.i•:: i:\l•, Void After. 90 Days PAY: Twenty-SixThousandDollarsAnd00, Cents**********^**** TO THE RAILROAD COMMISSION OF TEXAS SAFETY.DIVISION;;p;AMAGE PREVEN :1'N CONGRE;S$' T}N TX 7670`T Uniteei States Il' LO L S il: L i L 3 24 2 L911: 11'00 0 5 3 Lil' NO. 1015606 DATE: 19-JAN-09 VENDOR NAME: RAILROAD COMMISSION VENDOR NO: 205639 ;n:Y•zr^u:c:•^ r.,•v, ,:• ::i ..^. P^^s'^^.^.^'•:'',^..^:^:^:^^:::::: :?;:i<:^,',^...^ CHE01 1609-1 16-JAN-09 I 26,000.00 ^ 0.00 SH: RETURN CHECK TO PATTY PEI K EXT 28 08-TPD DOCKE NO 00040109828 PLEASE DETACH AND RETAIN THIS STATEMENT AS YOUR RECORD OF PAYMENT. ^76933- 26,000.00 0.00 26,000.00 26,000.00 Remittance Query Results Page 1 of 1 Choose an Application Log Out Go Remittance Management System Remittance Management Main 0.74 sec Remittance Query Results Showing: 1 - 1 of 1 results Remitter Name Receipt Amt. Allocated Amt. Register Number Remit Date Unallocated Amt. Payment Type Remit Status Settlement Date Trace No. Fee Code 1050254 ATMOS ENERGY CORPORATION 01/27/2009 26,000.00 26,000.00 Auth. Code Receipt No. Tracking No. Program Division Allocation Date Current Alloc. Benefactor 1 - CHECK PENDING GC-GENERAL LG-GUD-SF 01/27/2009 General Council Division 26,000.00 GUD 9828 Return Discfaimer I RRC Online Home I RRC Home I Contact http://webapps.rrc.state.tx.us/RM/remittanceQueryAction.do 1/27/2009 AMARILLO NATIONAL BAN Amarillo, TX NO.1015606 Atmos Energy Corporation P0 Box 650205 Dallas, TX 7.5265-0205 CHECK DATE CHECK NUMBER ;:::: : :.`::`::>: Void After 90 Days PAY: Twenty-Six Thousand Dollars And 00 Cents************************** TO THE ORDER OF RAILROAD COMMISSION OF TEXAS ATTN: SAFETY DIVISION DAMAGE PREVEN 1701 N CONGRESS AVE . AUSTIN, TX 7$701-1494 United States 11110 9g2.8 il'LOL56060 i:LLL3242L91: I''00 053 L'l' CHECK AMOUNT <;;<;s:; VICTOR G. CARRILLO, Chairman ELIZABETH A. JONES, Commissioner MICHAEL L. WILLIAMS, Commissioner 0 Ap^E o^ is MARY L. McDANIEL, P. E. DIRECTOR SAFETY DIVISION RAILROAD COMMISSION OF TEXAS Safety Division April 22, 2009 Ms. Patti Richards, V. P. Technical Services ATMOS ENERGY CORP., MID-TEX DIVISION P. O. Box 223705 Dallas, TX.75222-3705 Re: Pipeline Safety Evaluation Inspection Package Number: 32633 ATMOS ENERGY/MCKINNEY (All correspondence must include the Inspection Package Number) Dear Ms. Patti Richards: We have received your letter of March 4, 2009, stating that all alleged violations found during the above-referenced inspection have been corrected. A follow-up visit to your system will be scheduled in the future to determine if your corrective actions are sufficient. If you have any questions or need assistance, do not hesitate to contact Alfred Garcia, Jr in the Fort Worth Regional Office at (972) 240-5757. 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78 71 1-2 9 67 * PHONE (512) 463-7058 FAX (512) 463-7319 TDD (800) 735-2989 OR TDY (512) 463-7284 AN EQUAL OPPORTUNITY EMPLOYER ^TMOS energy Patti Richards Vice President March 4, 2009 Ms Mary McDaniel, P.E. Director, Safety Division Railroad Commission of Texas Post Office Box 78711 Re: Accident Investigation Evaluation No. 08-0829D Technical Services ^RECENED RRC- OF TEXAS MAR A 2009 SAFETY t^IVISION AUSTIN, TEXAS Dear Ms. McDaniel: As our investigation regarding the McKinney incident continues, I wanted to take this opportunity to provide you: with additional information related to the Commission's correspondence dated August 5, 2008, concerning the referenced safety evaluation. This information is meant to supplement our previous letter dated October 9, 2008. Item 1(a) in the Commission's safety evaluation concerns Atmos' emergency plan. Atmos Energy Mid-Tex Division has designated November as Emergency Plan Review month. This annual Emergency Plan Review includes, but is not limited to, discussions regarding determining the severity of the leak, determining migration, if any, methods for conducting leak investigations such as locating the gas piping and being aware of other underground facilities then bar testing to determine the leak location. The appropriate actions to be taken range from grading a leak as nonhazardous so the leak is thereafter scheduled for repair and to evacuating persons, rerouting traffic, requesting emergency assistance, and requesting additional company personnel. The Emergency Plan Review month activities for 2008 were completed by November 30, 2008, and this annual review will again occur in November 2009. Item 1(b) of the safety evaluation is specific to directional boring procedures. Atmos Energy incorporates into the Company Construction Manual a requirement for contractors performing boring to expose utilities prior to crossing when practical. In addition, the scope of work included in each job packet requires contractors to expose utilities prior to crossing when boring. Apparently the contractor did not perform this function. The second item in the safety evaluation concerns accident investigation. On December 5, 2008, Atmos Energy Mid-Tex Division completed incident investigation training for all Operating Region Vice Presidents, Directors, Managers and Supervisors. This training addressed topics including but not limited to documentation, responding to found and evolving circumstances, and CGI readings. Atmos Energy Corporation 5420 LBJ Freeway, Suite 1800, Dallas, TX 75240 P 214-206-2807 F 214-206-2126 patti.richards@atmosenergy.com Communication of gas events to emergency responders is the subject of the third item in the safety evaluation. Atmos Energy Mid-Tex Division contracts with Dig Tess for Public Awareness Safety training. A part of this training effort includes mailings to excavators and emergency responders. Included in these mailings are notifications for parties damaging a gas facility to notify 911. In May of 2007 and 2008 pipeline safety notifications were mailed to public officials and excavators advising them of the requirement for excavators damaging gas facilities to call 911. A copy of the mailed material is enclosed as Attachment 1. The requirement to call 911 is set forth in the PIPES Act of 2006 and a copy of the relevant section of that Act is also enclosed as Attachment 2. In addition, on September 9, 2008, Atmos Energy sent out an electronic notification to our contractors reminding them of the requirement to notify 911. A copy of that notification is included as Attachment 3. The fourth item concerns operator qualification. Please note that in 2008 Atmos Energy's Mid-Tex Division was in the process of transitioning from the Mid-Tex specific Operator Qualification program to the enterprise Operator Qualification program. Further, MJ Sheridan's employees Juan Estrada was (and is) qualified by a third party vendor. Finally, the last two items in the safety evaluation concern post accident drug and alcohol testing. Atmos' contractor, MJ Sheridan, did perform drug and alcohol testing of the individuals whose actions may have contributed to the incident, but that testing did not meet the 32 hour and 8 hour requirements as outlined in 49 CFR §§ 199.105 and 199.221. Please note that post accident drug and alcohol testing was addressed at the December 5, 2008, incident investigation training described above. Additionally, on January 21, 2009, Atmos Energy sent out an electronic notification to our contractors reminding them of the post drug and alcohol testing. A copy of this notification is enclosed as Attachment 4. Please do not hesitate to call if you have any questions concerning this information. tti Richards Vice President Technical Services Attachments Attachment 1 ropeuogsasunsuapuodsaieppodsqsand sns ua epeuopuaw eNedwo>ralnblen^ •upixdpnrednsotpnw sow.naper6 a{euuopsanbmor(of Aewasuodsa^maAulpaweu,fuedwo^Auy •uogedppsed^mAsqtpnwNaano.(>,ucyla .lerrodo6lpp^/d1Y ^pels3/alel5 wrrmrw "r`aa° .o ^•PepnD/A1D we u^aw rrtf'^••m+r•kxW •ta^•rkN •.DA..wa w•ukW UM^n'•,•wa`•rvlnwro rwW4 x"nicul u"tJ ^wroutm omt«ss wrosrun rrwusawl ukm werrm .+ssera r..r.sw^ w uosnrm swsrkxl r«row mnsu uerum ww+nn.J ...w•mwew., ,w.s,.,.,.>•^•^.. x^x•M•.. •+•+rn.^...,..,. ^.,^w... ^^^ +^+.^ẁr+rw... J,?CiS^ti iPZt1I?^ ^ p'Spe.Pne Lc;;tf • Apoolofiiquldonthegroundneara pipeline,a dense whttedoudorfog over apipeline,ordlscoloredvegetation surrounding the pipeline;an unwual dry spot In an otherwse molstfield;bubbling in marshWn d, rPvers or creeks, or an oily sheen appeadng onwatersurfaces may besigns ofa leak • Anunusualnoisecemingfromme pipeline,suchas aMssing orroaring so bn d, may be a sign of a leak • Anunusualsmellorgaseousodoftvill 9ometimesaccompanya pipeline leak • Froaengroundatthepipelinzin wannweather • Dirtblowingupfrprntheground Many plpeline companles regularlyinspect t helr ri ghtrof•way using air, fooh a nd vehicle pahols,These tralned Inspectors lookfor potentlaldangertoplpelinessuchas constmctlon act(vlty,andsigns ofgasor Iiquid leaks. These systematic patrols along their pipelineroutearetolnsurethesecudty and integdty of thelr lines. Even though It is eXtremely unlikelythata Ieakwilloccur,thislnfonnatlonwighelp prepareyouintheeventaleakorspilldoes Foryourafety,mzrkers showtheapprwdmate locat'wn of pipelinesand idenitythecompaniees Matopemtethem.Markersmaybeanywhere along the right•of-way ordlractly overtha pipdine.ThepipeMemay notfollowastolght coune between markers.While markers are helprNinloating plpeiines,markersare6mited I n the informmion they proiel e. Ma drers provid e no lnfomra lion, for etampia on the depth o t the numberof pipeHneslnthe righeobway. Markers may commonly be found where a pipeline lntersectsastreethlghway,or railway. These markerstndiatethematerlaltlansported Inthe plpellne,the name of the pipeline opemtor,and a telephone number where the pipeline operatorcan be reached in the event of an emergency.YOU should beatvare of any pipeline markers inyour neighborhoodand if possible,wrltedoa'n the name and phone numbersappeadng on the pipeline markers In aseofan emergency. Plpeline markenarelmporwmfordtesafery of the general pubilc.it isa tedemiodmeforany personto vrlllfully defacqdamage,remove,or destroyanyplpelinesign or dghtrof•way markeL CsY18 e>`o re K: u Di^s13 11 The FCC has requiredtelecommunications providerto proWdethree digit dialing services (or'Cell6eforeYou Dig•• The nationally established numberislsll and has been In affectsince4/13/07. Beforeyoudigor exo'rote,contactthe0ne-CxIlCenterby simplydialing git fromanywhere Inthe Unhed States.You mayabo needto cwntact a! - -,-aM ^„+n•weh.ww.r .•v.+•.s^ra r•+^.s•^,•,u.o....a ^ eaar companiesthatmay notbeamemberof theOne.CagCenter suchasloalwater distrlcts. Please alf beforeyousmrt '^`4p r.r..>.,x `" a,aw s.• •xa Rn•x+•4m^owwemu enfnkp erMtlrU,a ImnrhW WPeMhwU^O ,•.-+ w.ulwr k.mrn`»mrawr »vM9 wx„•+aY,Mw.q e rcutlMf ouexprnar .mtwu rKlaa u,ra.oni ae.+sek«a w.s rk«t wr»rrxJ .^.^..,. J0:"t F'^rs f:' = .nnve•n•^nr1..wN. n w ¢ura Mh»rwJ arwtsteW rsantekxr Mostpipelines arx monitored 2a hounaday, sevendaysaweektoinsurethelntegdtyand glos1q1u1paasa5aaeqnuAawp eqi6upnpioqq6lsupoo6euaaqaMeaepry fAuafuaweaugadldegoivanaatpulopolleqmmouqnoXoOy IAoM;lo-146uaupadldeazlu6ooaiosmoqraosqnaSoOZ Fln)dlzqautPoaqaqluluopauuo)uiatpseN,•t _..,__._.._-._..._....^ an•.M«v^w.s ^a•n•a•wqn.,,i.i. /+•w•a•m••x^•vn '+N'•mxnvlm•w•n ruwtUNl ^eoWYxf^-tN ww,v 4`rw ^^•^ DoN wvw.n„«u...e•. '^q+•,•u,nunwn.a w.w•m^•w+.owm«. •m+•nMUx.n ,•,•^r ags26tta9D i9geduso> anb aluaw eagpadsa ls is •elassqumol epaqm alapalueurasardar unanb coeun6a•17 nw+nula mwanl xrtmkul •reemilua sv.+•^a..xr.u -4„"°°2 ae...„,...a.r•.e s+n.wa..^or.x +awiwww..w wn .w^amru wo`o swsnum vratwo .,ssom r...x.r^ •wuw „s++xr.,•s..o w•w•e•.aw^ a' •w•w_«•t.a^ux•^ v.,n.vxw c•wvu•ea.+....+r^ .•1+ .+,. ::^n•.,•^^•va ^` ••I+v.mru..a...•.•.a •n•+r.xoa.usoa ••m^•' r.+W' ..a.^y+•^.n •vru --= ^..ur.+...o^ ... ••v.++•a^v.ww w What 14OTTa Do IfYou Suspect A Leak 1. DONOrtouch.breathe,ormke conlact,_ with th e leakin g liqulds ar gas.5tay upwind _ lfposslbla. yourprojeft 2•DONO7Iightamatchsnrtanengine,ose gwwwbaftbe'ow. whether atelephonetumnoroffanytypeof landsaping ^^^'`^^9' elechialsvlitchsuchasatight,gamge building'tencetoramajorconstmction dooropenebato,ordoanythingthatmay proJectPipelinecompaniesandotherutilitles createstatlcaraspark will markthe loation of theirllnes atnocost s. DONOrattempttoextinguishanypipeline to you•Pipeline and utilitymarkers may not ðatmaystart. show the axctloatlon of burled Iirres.faliure 1. DONOT dfwe Into a leakorvaporcloud to all before exavation L• the lead(ng ause aren.Atnomoblle englnes may ignite the afdamagesfo buded pipelines, vapon. k"+: r tL' i, i+8 3RuzzrG; S II f Vdpelsrrta prieut:t e Sesides liauid petrolcum and natumigas, pipegnestransporta vadety of pmducts foroureveryday Ilvessuch as oxygen for hospltzls.They may contain othertypes of gases,chemiak,hemrdousllquids,rehned products or wde oll,as wefl as nongammable products.lfa Ieakwould occuronthepipeNlq some ofthesematerials could awe environmental damage.Otherproducts may be highy Ham mzbl a or harmfui itlnh aled, ause eye orskln irdmtiomand possible difficulty breathing.8eause af these potendalhazardshisimporcanttobe able to recognizea pipeline leak WhatTo Do When A Suspected Leak Occurs 9. Immedlately leave the area. T. If possi ble tum olf arry e quipment being wedinornearthesuspectedleak Abandonany equlpmentbeing wed and moveupwind from thesuspactad Ieak 3. Fromasafeloatiomca11911 oryourloal emergencyresponse numberand the pipetlnecompatry¢Gllcoliett,if needed, and give your name, plwne number, description of the leak,and its loatlon. 4. Wam others tostay away when possiblw S.Trafhccontrol 6.hledialassistance 7. Eva cuatlon or ehelter In place Jr. Reeping the cu rious away 9. Envlronmentai protection lRif a leak has ignited eztingutsh only secendaryfires. 9. DONO7attempttooperztevalves. Cantactthe plpellne wmpanyasqukktyas por,ible.Pipeline markerslgnsshowthe plpetlne companyY name,emergenpq - - -telephonenumtsecand pipegnecontem. F. ct^s Co7:sequencekreas In accordan ce whh fed eral regulations some areas nearplpelmes have been designated as HighConsequenceAreas•FOrthesearaas, supplemental haaard assessmem and prevention progmms, known as Integdry ManagementPrograms.havebaen developed If a pipeline operator has High Consequence Areas,irtfonnadonaboutthese pians may be ava lia ble th roug h their company's webslte Ilsted on this brochureor bycontaNng the openter's corporate ol6 ces. - eTgtr7*Q^• ifr4t,fe proc2"' ,:s far PubS€c irdhzt PifyaSslze Cu;ztroi r, r Publicsafety officialsknoNtotakewhatev'er' steps aredeemed necessary tosafeguardthe publicin the eventofa plpelineemergenry Thesesuggesdonsareoffered oniyasa guide: • Emergencyloatlon 5ecureihearea around the leak to a safe dbrance.Thb could lnclude evawating peoplefrom homes.businesses,schoois,and otherioations,as well as erecting bardades tocomral access to the emerg ency siteand simitar preautions.Some plpeline emergendes may make going otndoors dangerous.In th ese ci rcumsta nces,shel tedng in place may be the satestcourseofaction. Ev.;teu:,.:• +xt She3ter in plzce When a chemial or gas kakoccurs hmay be necessary to dedde toevacuatethe general public orln some lnstances have the public sheher In place,A combtnation of both procedures may be requlred depending on the evacuatlon route and the location of;he emergency.lf pos;ible involve the pipegne comparry in the tle6Aonio evacuate or sheiterlnpiace. Ifthe pipeline leak Is not burning, take steps to prevent 1gnlcion.This could Include prohibiting smoking, rerouting t2fficand shutting off the electridtyand residential gas supply.lfthe plpelineis burning,tryto prevent the spread of hre but do notattempt to exdnguish It6urningpehnleum produtts vAll not explode butlfthefire b e;mnguishedgas and vapor may collecrand could eqsiode when reignited bysemndary fire. Vsy .fics7:11ee& to tErta;-r: • Yourmntactlnfonnation • Slae,chamctedsUa&bohavlorof mptureorsuspectedleak Arethereany envlronmentally sensitive concems nearby ' Aretherepdmary orsecondary fire9 • Arethereanyinludesordeaths • Proximitytobuiltlings . • Otheremergencyresponseagendes thatatan been notlhed. Public safety personnel unfamiliarwith the pipellne lnvolved In the emergenry should notattempttq operateany ofthevalves on the plpellne.impropedy Cpemting the pipeline valvescould esalatethe shuation and cause otheraccidenn to occur. Ci i:,i -1_ G'Ipet€r;r Cotatrht or Mspstch [lryy: • Stoporraducethefloworproductthrough - thepipeilne. • Dispatchpipelineemeigentycesponse personnel and equipmentto the emergencyslte. • Informyouofanypreautionary recommendations • Actasagaisonbetweenemergency response agencles & plpellne compnypenonnel. • Helpbringtheemergencytocondusionas qulckly & as safely as possi ble. F°t^:r,-rtgzliclZr°e;t^g ThelocationsofpipeBnesshouldbe consideredin land useplansand mning. Pipeline opemton would liketo workwsth you when developing siteplansforschooL• and otheraraaswhere large numbertof peoplewtllcongregate. Can Qwna;s 6u€td or h?iv on, s Ftac,Ftt^+^f-E^,rs ^? Pipeline rights-of wzy mustbe keptfreefrom structtues and other obstwcdons to provid e aaesstothe pipeline for malntenarrcqas vrcll aslnthe eventofanemergencylfa pipeline ttossesyourproperty,please donotp!ant trees or largeshmbsonthedght-of^iyDo n ot dig, bulid sto rq or place a nything on or n eir the right-of-ways with out firsf havi ng the pipellne company's pe rsonnel mark t he pipellne orstakethe right•of•waysand explein the company5 ranstrudlon and eas e mem requl rements to you. s : 1 > " fi.•^EG Y Q S%r N iheNation'sinfrastwctures.ilxluding Although accldentsare rare.ifone dnes occur,the pipeline opemtorwiii immedutely dispatch personnel tothasiteto heiphandle the emergencyandtoprovlde Infomlatlonto pubiic safety offidals toaidtheirtespeme to the emarganry.Pipallnetechnidxns will also take the necenary operating attionssadn as starting andstopping purrmps orcornpressors, closingand opening valves,and slmilarsteps to minim i2e the impa ct of thosituadon. pipeline[.are a matterof National9ecufdy. Il you whness a suspldow activuy on a pipeline right-of-waypkase reportltto the plpeline opemtor.Theirnumbers arellstedon this brochure.Threatadolsodes may be found atthe Depanmentof Homeiand Secudry's ivebslte www.dhs.gov/dhspubec 2. When I call the pipeline Company, who will I talk to & what Will they need to know? ..If you suspect a pipeline leak you should immediateiy contact your local. police and fire departments (9.11).. Then you can assist the pipeline company by. cal(ing its 24 - hour response center. As an emergency responder, whether a call comes .in. reporting -a; suspected pipeline problem or you discover a pipeline ,problem in the. field, the number bne . priarity"is public safety ahd environmantal protection. In the event 'of a pipeline -emergency it is critical that you -caif the pipeline company as soon as possible. Pipelines have -corffrol centers that are staffed 24 hours a day, 365 days a year. Their emergency numbers can be found in each comp.anies section of this reference guide and on pipeline markcrs. When the pi`peline control center receives an emergency calt, they will immediately take steps to control the leak and work with you to protect the. pubti'c and the ertviironment: To take these steps the pipeiinecontrol center'vsriii need fio gather as much information from you as possible,.making this first call a very critical calL Gontacts In order to maintain contact with you and.ac#..as a fiaison., the pipelinecontrol center will need to know haw to contact you. 4 Your name & title in your organization Call back phone humber.s (primary & alternate numbers) How to Recognize a Pipeline Leak Pipeline Monitoring • A pool of liquid on the ground near a pipeline, a dense white cloud or fog over a pipeline, or discolored vegetation surrounding the pipeline; an unusual dry spot in an otherwise moist field; bubbling in marshland, rivers or creeks, or an oily sheen appearing on water surfaces may be signs of a leak Most pipelines are monitored 24 hours a day, seven days a week to insure the integrity and security of these Iines.Sophisticated computers, alarms, meters, and satellite technology may be used to control and monitor pipeline systems. Some pipelines contain automatic shut-off valves that will immediately isolate a leak. Many pipeline companies regularly inspect their rights-of-way using air,foot, and vehicle patrols.These trained inspectors look for potential danger to pipelines, such as construction activity, and signs of gas or liquid leaks. These systematic patrols along their pipeline route are to insure the security and integrity of their lines. • An unusual noise coming from the pipeline,such as a hissing or roaring sound, may be a sign of a leak • An unusual smell or gaseous odor will sometimes accompany a pipeline leak • Frozen ground at the pipeline in warm weather • Dirt blowing up from the ground What To Do If You Suspect A Leak 1. Immediately leave the area. 2. If possible turn off any equipment being used in or near the suspected leak. Abandon any equipment being used and move upwind from the suspected leak. 3. From a safe location, call 911 or your local emergency response number and the pipeline company. Call collect,if needed,and give your name, phone number, description of the leak, and its location. 4. Warn others to stay away when possible. What NOT To Do If You Suspect A Leak 1. Do not touch, breathe, or make contact with the leaking liquids or gas. Stay upwind if possible. 2. Do not light a match, start an engine, use a telephone, turn on or off any type of electrical switch such as a light, garage dooropener, etc., or do anything that may create static or a spark. 3. Do not attempt to extinguish any pipeline fire that may start. 4. Donot drive into a(eak or vapor cloud area. Automobile engines may ignite the vapors. 5. Do not attempt to operate valves. Markers For your safety, markers show the approximate location of pipelines and identify the companies that operate them. Markers may be anywhere along the right-of-way or directly over the pipeline.The pipeline may not follow a straight course between markers.While markers are helpful in locating pipelines, markers are limited in the information they provide. Markers provide no information,on the depth or the number of pipelines in the right-of-way. Markers may commonly be found where a pipeline intersects a street, highway, or railway.These markers indicate the material transported in the pipeline,the name of the pipeline operator, and a telephone number where the pipeline operator can be reached in the event of an emergency. Call Before You Dig! 811 Before you dig or excavate, contact the One-Call Center by simply dialing 811 from anywhere in the United States. Whether landscaping, building fences, or a major construction project and agricultural operations, such as chisel plowing, deep ripping, drain tile installation, „.9setting posts and other deep excavations or installations. Pipeline companies and other utilities will mark the location of their lines at not cost to you. Failure to call 811 before excavation is the leading ause of damages to buried pipelines. When excavating near pipelines many pipeline companies will require that they have a pipeline company representative monitor the excavation. Proper backfilling is essential to prevent damage to the pipeline. Know what ls below. Call before you dig. What to do if a Pipeline is Damaged or Disturbed. Even if you cause what appears to be only minor damage to the pipeline immediately notify the pipeline company. A gouge, scrape, dent, or crease to the pipe or coating may cause a future rupture or leak. It is critical that a cut or broken tracer wire be repaired. It is imperative that the pipeline owner inspects and repairs any damage to the line or related apparatus. Many states have laws requiring damages to be reported to the facility owner and/or the One-Call center by dialing 811. Do not attempt to make the repairs to the line yourself. If a line is ruptured or leaking call 911. Contact the pipeline company as quickly as possible. Pipeline marker signs show the pipeline company's name, emergency telephone number, and pipeline contents. Non-English Speaking Public Awareness Material Federal regulations require that pipeline operators offer public awareness material in languages other than English whenever there is a significant population of non-English speaking stakeholders. If other languages are required in your area, contact our Regulatory Services Department toll free at 1-877-280-8636. National Pipeline Mapping System For information about pipelines operating in your area,you may contact the National Pipeline Mapping System (NPMS).This database of pipeline operators and the location of their lines was designed for the public to have access to contact information for pipeline companies operating in your area.Visit www.npmsa.phmsa.dot.gov for more information. Other resources may be found at Office of Pipeline Safety http://ops.dot.gov, information on safe excavation go online and visit www.commongroundalliance.com. ^ ^ Common Ground Alliance is ^ExAS PRSRT STD U.S. POSTAGE PAID PLANO, TX PERMIT 210 LACAVATION A FETY ,-:YSTEM,INC. 11880 Greenville Ave., Suite 120 Dallas, Texas 75243 If your company owns or operates underground lines - JOIN DIG TESS TODAY! H 6 wT6, R eco^ n iT6 ncllRespand ^9_al pelftle,r ge ^cy, Pipelines safely transport many materials and products that we depend upon for our quality of life. When left alone, they are the safest method of transportation for these materia ls. , If during excavation activities, you cut, strike or otherwise cause damage to a pipeline, however, serious consequences can result, including a danger to public health and injury to people and property. Knowing how to recognize a pipeline emergency can help you avoid such serious consequences. Watch for these signs of a pipeline emergency: • Hissing or blowing sound. • Unusual blowing of dirt or dust from a hole in the ground. • Persistent bubbles in water. • Dying plants amid healthy ones. • Gaseous or unusual odor. • Flames coming from the ground or burning above ground. • Accumulation of a liquid on the ground. • A dense white cloud or fog overthe pipeline. If you see any of the previous signs,follow these steps: • Extinguish all open flames and eliminate other possible sources of ignition. • Evacuate the area immediately. • Avoid potential ignition sources (telephones, electric switches, lighters, etc.). • Warn others to stay away. • Notify the facility operator immediately. • If unknown, call 911 from a safe location. • ;^?•^: ^`i:' I l:, .61 471=.°cf ^• 5c`,;a?ftt. l:cYr^^; '.^`?:dr l. :iei^r,lw ^" `i=1^^^^^i^1e ^ °;r^^ ^ CI^k;^[ ',i',^^.1^r°"^ r ^:. www.digtess.org Summary of Texa Railroad W Comm isio'n Rule Chap• te r 18I Underground Pjpeline Damage Prevention Effective September 1, 2007 On May 30, 2007 the Texas Railroad Commission (RRC) approved new regulations "Chapter 18 - Underground Pipeline Damage Prevention" relating to pipeline facilities under jurisdiction of the RRC Chapter 18 became effective on September 1, 2007. Following are highlights of Chapter 18 - this is not the complete rule! See the complete Chapter 18 for full information. 251 Plus Rule - Chapter 251 of the Texas Utilities Code remains in effect. If you were previously subject to it, you still must comply with its terms. The new Chapter 18, however, adds requirements, in addition to those in Ch. 251, for certain pipelines, excavators and others. Exemptions under Chapter 251 may not apply under Chapter 18. 16-Inch Rule - Applies to "movement of earth" - that is more than 7 6 inches deep and "in the vicinity of a pipeline" in Texas. Ticket Life Rule -Ticket life for a notification is 14 working days unless otherwise agreed to in writing by excavator and operator. Required Records Rule - Operators and excavators must maintain certain records for 4 years. Positive Response Rule - Excavators must tell the notification center they wish to receive positive response. Methods can include: marks at the site, fax, phone email, pager or written correspondence. Operators must give positive response by method specified by excavator. Locators must attempt to notify an excavatorof a customer-owned line. ^^@@ 0 (D a To facilitate damage prevention, promote public safety and protect the environment through stakeholder education and communication. Face-to-face meeting Rule - If a project is too large to whiteline or is too expansive to describe on a locate request, the excavator and operator must meet face-to-face to establish; interval between notices to notification center (refresh); scope of each locate request: life of each locate; excavation schedule and when markings are to be made. Specific Excavator Rules - Excavators must have a copy of a locate request available within an hour; must check for unmarked pipeline facilities; must make a second call to the notification center if: they received a"no-conflict" from an operator but know of the existence of a pipeline, have a clear evidence of presence of a pipeline but received a "no-conflict", have not received a positive response, or if the positive response is unclear or etroneous. Markings - All markings of pipelines that are 6 inches wide or more must include the nominal diameter of the line in every other locate mark. Marks should go one mark beyond the locate request. Tolerance Zone -The tolerance zone is 18 inches on either side of the pipe, plus half the diameter of the pipe. For example, a six-inch pipeline would have a tolerance zone of 21 inches on either side of the pipe. Excavators must dig with care in the tolerance zone. Reporting Rules - Underground pipeline operators must report all pipeline damages by excavators to RRC within 10 days using Texas Damage Report Form (TDRF). Excavators must report via TDRF for: Damage to pipelines (must be reported through notification center within 2 hours); necessity to make "second notice"; no positive response by operator. • TDRF Reporting Formhttp.llwww.rrc.state.tx.us/formpr/index.htmi • Chapter 18, Underground Pipeline Damage Prevention Rule: http*//www.rrc.state.tx.us/ruies/ DISCLAIMER OF LIABILITY/RESPOAISIBILITY Texas Excavation Safety System, Inc. (TESS) - provides this summary for informational purposes only, as a public safety service byTESS.TESS makes no warranties regarding the accuracy of this summary nor may you rely upon this summary for any purpose other than as an aid. You should make your own independent assessment of the Railroad Commission Regulations and their application to your business or operation. You should seek the independent advice of your attorney.TESS is not an agent of the RRC and does not render legal or other professional advice. 0 . . . Line # . • . . . . -. . ... . . Suggested Penalty Suggested Penalties for Violations of RRC Cha pter 18 and Pena tty Amo unt Conduct Cite v 1 Failureto complywith Chapter 18 §18,1 $1,000 2 Failure to notify notification center §18.3 $1,000 3 Failure to include method for positive response §18.3 $1,000 4 Failure to use white lining where appropriate §18.3 $1,000 $ 5 Failure to conduct a required face-to-face meeting §18.3 $1,000 $ Calculation 6 Failure to establish protocols when required §18.3 $1,000 $ Worksheet 7 Failure to give second notice when required §18,4 $1,000 $ 8 Failure to protect locate markings §18.4 $1,000 $ 9 Failure to waitthe required time to dig §18.4 $1,000 $ 10 Failure to provide positive response on first or second call §18.5 $1,000 $ 11 Failure to keep record of positive response §18.5 $1,000 $ 12 Failure to notifyof no positive response $1,000 $ 13 Failure to mark excavation or pipeline properly 8.15:1 § §7 1 8. §18•6% 18.8 $1,000 $ 14 Failure to dig with care within Tolerance Zone §18.10 $1,000 $ 15 Failure of operator or excavator to repork pipeline damage § 18.11 $1,000 $ 16 Subtotal of penalty amounts (line 1 through 15) 17 Reduction for settlement before hearing: up to 50% of line 16 amt. 18 Subtotal (amount on line 17 less applicable settlement reduction on line 18) $ $ $ ^ { $ % $ $ Penalty enhancements Recommended Enhancement 19 Impact to a residential or public area $5,000-$25,000 $ 20 Reckless conduct of person charged Double Penalty amount $ 21 Second Offense Double Penalty amount $ 22 More than 2 but fewer than 5 violations Triple Penalty amount $ 23 More than 5 but fewer than 10 violations Four times Penalty amount $ 24 Morethan1Uviolations Five times Penalty amount 25 Subtotal (amount on line 18 plus all amounts on line 19 through 24) $ 26 Reduction for demonstrated good faith of person charged $ 27 TOTAL PENALTY (amount on line 25 less any amount shown on line 26) $ Questions and Answers About Chapter 18... The following Q&A is from a presentation given by a representative of the Railroad Corporation of Texas on September 18, 2007, in conjunction with the TESS Annual General Members Meeting. It is offered by TESS for informational purposes only. 1. . If damages occur to yard lines or customer owned lines will they need to be reported? Short Answer: Yes -The damages would need to be reported to the Commission through the TDRF and to the owner of the damaged pipeline. 2. j^ Q Y $ ^ will all second requests require a report to TDRF to explain the reason for the second request or only the second request where the operator was in violation? YES -"(c) An excavator that gives a second notice to the notification center pursuant to §18.4(e) of this title, relating to Excavator Obligation to Avoid Damage to Underground Pipelines, because an operator failed to provide a positive response to an excavator shall report that fact to the Commission through TDRF as set forth in §18.11 of this title, relating to Reporting Requirements. An excavator shall also report an operator's failure to provide a positive response to a second call to the Commission through TDRF as specified in §18.11:' 0 3. Will an annual report be generated from the total reports from the TDRF and will this report be generic like the Common Ground Report? (Note excavators were also concerned with this, fearing they might put on a black list and not be able to bid some jobs) YES - A format for an annual report has not been created at this time. We will be developing the report format over the next several months after we have our damage prevention staff in place. It is important to note that all of the data collected through TDRF is open record information 4. Will operators be required to report their own contractors working on their own system if a damage occurs? YES • All damages are required to be reported regardless of the situation. This information will be important in our effort to enhance the damage prevention program for our State. 5. Will operators be able to take the training class to reduce a violation just as the excavators can? YES - Training classes will be an option for both the operators underground facility and the excavator operators. 6. Will exceptions be made for ROW encroachments for landowners? Example, ranchers routinely work on the ROW without calling for locates. If an operator reports them the rancher may lock them out. Will there be a distinction between landowners and professional excavators when reporting ROW violations?, NO - At this time, we are not planning to distinguish between "professional" excavators and those non professionals such as landowners, homeowners, or other people not routinely involved in excavation activities, 7. Along with the TDRF is there a specific person or office that hard copy documentation should be sent to? YES • If an operator is unable to file the report online, a hard copy can be sent in to the Safety Division, attention DAMAGE PREVENTION COORDINATOR. • HoweveG'the Safety Division would like all damages to be reported online through the TDRF system. If submitted online there is no need to send the report in by mail. 8. Will action be taken if an excavator repeatedly makes false or unnecessary second requests? Unsure as to why an operator would be making a second call to the one call center if it is not necessary. • 9. If this relates to people requesting emergency locates when an emergency does not exists,yes, we will be investigating these types of complaints. If an excavator chooses to contest a violation will they be required to travel to Austin to do so, or can that be done at the local Commission office? • Initiaily,all hearings will be held in Austin. • In the past parties have been given the opportunity to participate in hearings byteleconference. • We anticipate expanding the process out to field offices, 10. Will there be an appeal process for infractions? YES • All excavators and/or operators have the ability to contest Complaintsarsd alleged or probable violations • We anticipate that we will be sending out alleged violation notices for the affected party to respond prior to any enforcement action is initiated. 11. Will the escalating fines be done by companies divisions or simply by company name? In other vrords a large excavator with offices across the entire state could have violations in different field offices and quickly be at the highest level of fines, even though certain field offices may not have received any fines. When that field office has its first violation would it then be required to pay the higher level of fines based on its company's statewide violations? (This is tied back to bonuses that some contractors give their employees based on no safety violations.) • There may be consideration given to various"operating"groups of companies involved in excavation or pipeline operation. • This breakdown of operating areas may need to be developed as, the enforcement of the rule progresses. 12. Can some criteria for a prudent excavator be given so that this material can be provided to the Commission if an excavator chooses to challenge a violation? Guidelines • As we staff our enforcement section, our first priority is education regarding the rules,and how to comply with them. • We do anticipate putting together guidelines for compliance with the rule • May go into something similar to DOTs protocols for compliance. 13. Will the training classes be given in Austin or in various locations around the state? The Commission will not be conducting the training classes as part of compliance with this rule. • There are many different training courses that are available and they are available throughout the State. 14. Will the Commission have a fixed cost for the training classes? • The Commission will not require a certain cost for training classes •"(e) Depending upon the nature of and the consequences resulting from a violation of this chapter,the Commission may impose a nonmonetary penalty,such as requiring attendance at a safety training course,or may issue a waming," 15. Will there be a limit as to how many times an excavator can take the class? No limit - Each case will be considered separately, and the history of the violations bythe party will be reviewed. • It may be that more training courses are recommended, but may not. 16. Will excavators be able to postpone appearing for a violation so as to combine several violations into one trip to the commission? Also is there a form to request a postponement to allow an excavator to collect information regarding a violation? YES • Again,we are still developing this process but we do anticipate that we will be having quarterly enforcement hearings. • • This quarterly process will have us"batching cases"together. A form has not been created at this time. We will be developing the report format over the next several months after we have our damage prevention staff in place. 17. If damages occur to yard lines or customer owned lines will they need to be reported since the operator did not markthem? Short Answer: Yes The damages would need to be reported to the Commission through the TDRF and to the owner of the damaged pipeline. 18 Will information from TDRF be available to the excavator to fight claims from operators for damages? YES • All of the information reported through TDRF is open records and will be available to everyone. • We are in the process of developing different reports for review by excavators,operators,and the general public. Attachment 2 PUBLIC LAW 109-468-DEC. 29, 2006 120 STAT. 3487 "(d) PROHIBITION APPLICABLE TO EXCAVATORS.-A person who engages in demolition, excavation, tunneling, or construction"(1) may not engage in a demolition, excavation, tunneling, or construction activity in a State that has adopted a onecall notification system without first using that system to establish the location of underground facilities in the demolition, excavation, tunneling, or construction area; "(2) may not engage in such demolition, excavation, tunneling, or construction activity in disregard of location information or markings established by a pipeline facility operator pursuant to subsection (b); and ."(3) and who causes damage to a pipeline facility that may endanger life or cause serious bodily harm or damage to property"(A) may not fail to promptly report the damage to the owner or operator of the facility; and "(B) if the damage results in the escape of any flammable, toxic, or corrosive gas or liquid, may not fail to promptly report to other appropriate authorities by calling the 911 emergency telephone number. "(e) PROHIBITION APPLICABLE TO UNDERGROUND PIPELINE FACILITY OWNERS AND OPERATORS.-Any owner or operator of a pipeline facility who fails to respond to a location request in order to prevent damage to the pipeline facility or who fails to take reasonable steps, in response to such a request, to ensure accurate marking of the location of the pipeline facility in order to prevent damage to the pipeline facility shall be subject to a civil action under section 60120 or assessment of a civil penalty under section 60122. "(f) LIMITATION.-The Secretary may not conduct an enforcement proceeding under subsection (d) for a violation within the boundaries of a State that has the authority to impose penalties described in section 60134(b)(7) against persons who violate that State's damage prevention laws, unless the Secretary has determined that the State's enforcement is inadequate to protect safety, consistent with this chapter, and until the Secretary issues, through a rulemaking proceeding, the procedures for determining inadequate State enforcement of penalties.". (2) CIVIL PENALTY.-Section 60122(a)(1) is amended by striking "60114(b)" and inserting "60114(b), 60114(d),". (b) STATE DAMAGE PREVENTION PROGRAMS.- (1) CONTENTS OF CERTIFICATIONS.-Section 60105(b)(4) is amended to read as follows: "(4) is encouraging and promoting the establishment of a program designed to prevent damage by demolition, excavation, tunneling, or construction activity to the pipeline facilities to which the certification applies that subjects persons who violate the applicable requirements of that program to civil penalties and other enforcement actions that are substantially the same as are provided under this chapter, and addresses the elements in section 60134(b);". (2) IN GENERAL.-Chapter 601 is amended by adding at the end the following: "§ 60134. State damage prevention programs "(a) IN GENERAL.-The Secretary may make a grant to a State authority (including a municipality with respect to intrastate gas Attachment 3 To: Atmos Energy, Mid-Tex Division Contractors From: Buddy Powell Operations Manager Atmos Energy, Mid-Tex Division Date: September 9, 2008 Re: Compliance with Federal and State Laws and Regulations Atmos Energy, Mid-Tex Division contractors are contractually obligated to comply with all applicable Federal and State laws and regulations. As a reminder, Federal law provides that a person (which includes a corporation, company, association, firm, partnership, joint stock company, State, municipality, and individual)'who engages in demolition, excavation, tunneling, or construction May not engage in a demolition, excavation, tunneling, or construction activity in a state that has adopted a one-call notification system without first using that system to establish the location of underground facilities in the demolition, excavation, tunneling, or construction area; May not engage in such demolition, excavation, tunneling, or construction activity in disregard of location information or marking established by a pipeline facility operator; and • Who causes damage to a pipeline facility that may endanger life or cause serious bodily harm or damage to property May not fail to promptly report the damage to the owner or operator of the facility and If the damage results in the escape of any flammable, toxic, or corrosive gas or liquid, may not fail to promptly report to other appropriate authorities by calling the 911 emergency telephone number. Please ensure all employees are aware of these statutory requirements. If you have any questions concerning this memo, please do not hesitate to contact me at 214-206-2784. 1 Attachment 4 IMPORTANT NOTICE To: Atmos Energy, Mid-Tex Division Contractors From: Buddy Powell Date: January 21, 2009 Re: Post-Accident Drug and Alcohol Testing Regulations Atmos Energy, Mid-Tex Division contractors are contractually obligated to comply with all applicable Federal and State laws and regulations. As a reminder, Federal law provides the following. Post-accident alcohol testing: Each operator shall conduct the following types of alcohol tests for the presence of alcohol: (a) Post-accident. (1) As soon as practicable following an accident, each operator shall test each surviving covered employee for alcohol if that employee's performance of a covered function either contributed to the accident or cannot be completely discounted as a contributing factor to the accident. The decision not to administer a test under this section shall be based on the operator's determination, using the best available information at the time of the determination, that the covered employee's performance could not have contributed to the accident. (2)(i) If a test required by this section is not administered within 2 hours following the accident, the operator shall prepare and maintain on file a record stating the reasons the test was not promptly administered. If a test required by paragraph (a) is not administered within 8 hours following the accident, the operator shall cease attempts to administer an alcohol test and shall state in the record the reasons for not administering the test. (3) A covered employee who is subject to post-accident testing who fails to remain readily available for such testing, including notifying the operator or operator representative of his/her location if he/she leaves the scene of the accident prior to submission to such test, may be deemed by the operator to have refused to submit to testing. Nothing in this section shall be construed to require the delay of necessary medical attention for injured people following an accident or to prohibit a covered employee from leaving the scene of an accident for the period necessary to obtain assistance in responding to the accident or to obtain necessary emergency medical care. Post-accident drug testing: Each operator shall conduct the following drug tests for the presence of a prohibited drug: (b) Post-accident testing. As soon as possible but no later than 32 hours after an accident, an operator shall drug test each employee whose performance either contributed to the accident or cannot be completely discounted as a contributing factor to the accident. An operator may decide not to test under this paragraph but such a decision must be based on the best information available immediately after the accident that the employee's performance could not have contributed to the accident or that, because of the time between that performance and the accident, it is not likely that a drug test would reveal whether the performance was affected by drug use. Definitions: Covered employee, employee, or individual to be tested means a person who performs a covered function, including persons employed by operators, contractors engaged by operators, and persons employed by such contractors. Please ensure all employees are aware of these statutory requirements. If you have any questions concerning this notice, please do not hesitate to call me at 214-206-2748. Buddy Powell N Q,1015606 DATE: 19-JAN-09 VENDOR NAME: RAILROAD COMMISSION VENDOR NO: 205639 0.00 26,000.00 16-JAN-09 SH: RETURN CHECK TO PATTY PE K EXT 28 8-TPD DOCKE'$' NO 00040109828 C H E011609-1 PLEASE DETACH AND RETAIN THIS STATEMENT AS YOUR RECORD OF PAYMENT. 3 ^^^9 "33- 26,000.00 0.00 26,000.00 26,000.00 ' NAME AND ADDRESS OF SENDER i OFFICE OF GENERAL COUNSEL - ENFORCEMENT RAILROAD COMMISSION OF TEXAS TYPE OF MAIL: P.O. DRAWER 12967 AUSTIN, TX 78711-2967 CERTIFIED ARTICLE NUMBER OF ARTICLE NAME OF ADDRESSEE 1 7006 0810 0000 4587 9694 Atmos Energy Corp Mid Tex Division P.O. Box 223705 Dallas, TX 75222-3705 POSTAGE FEE R.R. FEE REMARKS 2.70 2.20 GUD 0928 CSH 01/16/09 Corporation Service Company, R. A. Atmos Energy Corp. Mid-Tex Division 701 Brazos St., Ste. 1050 Austin, TX 78701 2.70 2.20 GUD 09828 CSH 01/16/09 t +, ^ F-f 2 7006 0810 0000 4587 9700 3 7006 0810 0000 4587 9717 Kim P. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste.1800 Dallas, TX 75240 2.70 2.20 GUD 09828 CSH 01/16/09 4 7006 0810 0000 4587 9724 Robert W. Best, CEO/Pres./Chair. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 2.70 2.20 GUD 09828 CSH 01/16/09 5 7006 0810 0000 4587 9731 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 2.70 2.20 GUD 09828 CSH 01/16/09 , ^ TOTAL NUMBER OF TOTAL NUMBER OF POSTMASTER, PER (NAME The full declaration ofvalueis required on all domestic and international mail registered mail. The maximum idemnity payable for the reconstruction of PIECES LISTED BY PIECES RECEIVED BY OF RECEIVING EMPLOYEE) nonnegotiable documents under Express Mail document reconstruction insurance is SENDER POST OFFICE DEC -t' 5 ^y ^y^ $500 per piece subject to additional limitations for multiple pieces lost or damages in a single catastrophic occurrence. The maximum idemnity payable on Express Mail merchandise insurance is 5500, but optional Express Mail Service merchandise insurance is available for up to $5,00Q to some, but not all countries. The maximum idemnitypayable is $25,000 for registered mail. See DomesticMai[Mmma! R900, 5913, and S921 for limitations of coverage on insured and COD mail. See /n tenw tionalMailManual for li mitati ons o f coverage on i nternati onal mail . Speci a l handling charges apply only to Standard Mail (A) and Standard Mail (B) parcels. 0 MICHAEL L. WILLIAMS, CHAIRMfllV LINDIL C. FOWLER, JR., GENERAL COUNSEL ^^^^^ ^✓ VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER ^^ ^ LOWELL E. WILLIAMS, DIRECTOR V^ ENFORCEMENT SEC7ION RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL January 2, 2009 Clark Thomas & Winters Dan Renner, Attorney P.O. Box 1148 Austin, TX 78767 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS Dear Mr. Renner: I need to receive your company check in the amount of $26,000.00 in order to settle the above-captioned docket. Enclosed is an Agreed Order to be signed and returned to me (please do not fill in dates). If I do not receive the administrative settlement in the amount of $26,000.00, and the signed Order back within fifteen working days from the date of this letter, I will assume you no longer desire to settle this docket, and I will proceed to file a formal complaint and schedule the matter for hearing. When I receive the check and signed Agreed Order, I will set the matter for the next available Conference for the Commissioners review. If the Commissioners approve the settlement, the docket will be closed. You will receive a copy of any Order signed by the Commission. Thank you for your prompt attention to this matter. Should you have any further questions,lease do not hesitate to contact me. Christopher SlYotchwiss, Staff Attorney Office of General Counsel - Enforcement (512) 463-6779 cc: Mary McDaniel 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAx: 512/463-6989 http://www.rrc.state.tx.us RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER On this the day of , 2009, the above-entitled and numbered docket came on for consideration by the Railroad Commission of Texas ("Commission"). The Commission and Atmos Energy Corp., Mid-Tex Division ("Atmos") have agreed to an informal disposition of the matters under this docket through this Stipulation, Agreed Settlement and Consent Order ("Order"). The Commission has authority to informally dispose of this contested case docket through a Consent Order pursuant to TEx. Gov'T CODE ANN. § 2001.056(3). IN COMPROMISE AND SETTLEMENT OF THIS DOCKET, the Commission and Atmos do hereby agree and stipulate as follows: 1. Atmos is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos is a person as that term is defined by Title 16, Section 7.70(b)(1) of the Texas Administrative Code. 3. The Atmos distribution system is a pipeline facility as defined by Title 16, Section 7.70(b)(4) of the Texas Administrative Code. 4. Atmos owns and operates the subj ect pipeline facility, subj ect to Title 16, Section 7.70(b)(5) of the Texas Administrative Code. 5. The Commission and Atmos agree that the alleged violation as set forth in GUD Docket No. 09828, regarding Pipeline Safety Evaluation No. 2008-0829, is hereby settled and compromised under the terms of this Order. This Order affects no other matters. 6. The alleged violation by Atmos constitutes an alleged violation of the provisions of Chapter 121 of the Texas Utilities Code or a safety standard or rule relating to pipeline facilities adopted thereunder. 7. Neither this Consent Order, nor any written or oral offer of settlement related thereto, nor any statement contained therein shall constitute evidence or an admission or adjudication of: (A) any fact or conclusion of law alleged in or relating to GUD Docket No: 09778; (B) any violation of any statute, rule or regulation or other wrongdoing or misconduct on the part of Atmos or any director, officer, agent, employee, contractor or affiliate thereof. The Commission shall not use this Order, any offer of settlement relating thereto, nor the Investigation as the basis for the institution of any further administrative or enforcement proceedings. 8. Atmos makes no admission of any alleged violation, but wishes to address the Commission's concerns under the terms of this Order. 9. The Commission wishes to further the goals of safety and the prevention and control of pollution within the State of Texas. 10. The Commission has considered any history of previous violations under Chapter 121 of the Texas Utilities Code by Atmos, the seriousness of any alleged violation, and any hazard to the health or safety of the public, and has determined that the facts of this case warrant an informal disposition of the Commission's concerns under the terms of this Order. 11. An opportunity for. public hearing regarding the above entitled and numbered docket was given to Atmos, and Atmos has elected not to avail itself of the opportunity for public hearing. 12. The Commission hasjurisdiction to assess an administrative penalty against Atmos, pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 13. The alleged violation as set forth in Gas Utilities Docket No. 09828, regarding Safety Evaluation No. 2008-0829, has been placed into compliance by Atmos with the requirements of TEX. UTIL. CODE ANN. § 121.201 et seq., and Title 16, Chapter 7, of the Texas Administrative Code. 14. An administrative settlement penalty in the amount of TWENTY SIX THOUSAND DOLLARS ( $26,000.00) shall be recovered by the Commission for the alleged violation asserted against Atmos, as the operator of the subject pipeline facility. 15. Atmos has placed into the possession of or has caused to be placed into the possession of the. Commission, funds in the amount of TWENTY SIX THOUSAND DOLLARS ( $26,000.00), for deposit in the General Revenue Fund, as payment of administrative penalties assessed. 16. The person signing hereunder for Atmos has authority to represent Atmos in this matter. Jurisdiction of the Commission over this docket having been established, and based upon the agreement of the parties, it is, therefore, ORDERED by the Railroad Commission of Texas, that Atmos is assessed administrative penalties in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00), and that Gas Utilities Docket No. 09828 be informally disposed by this Order and closed. Done this day of , 2009. RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by Master Agreed Order dated , 2009.) APPROVED AS TO FORM AND SUBSTANCE: Atmos Energy Corp., Mid-Tex Division By: Title: MICHAEL L. WILLIAMS, CHAIRMAN VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, DIRECTOR ENFORCEMENT SECTION tt-U M-A RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL January 2, 2009 Ms. Patti Richards, Vice Pres. Tech Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT-ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS Dear Ms. Richards: I need to receive your company check in the amount of $26,000.00 in order to settle the above-captioned docket. Enclosed is an Agreed Order to be signed and returned to me (please do not fill in dates). If I do not receive the administrative settlement in the amount of $26,000.00, and the signed Order back within fifteen working days from the date of this letter, I will assume you no longer desire to settle this docket, and I will proceed to file a formal complaint and schedule the matter for hearing. When I receive the check and signed Agreed Order, I will set the matter for the next available Conference for the Commissioners review. If the Commissioners approve the settlement, the docket will be closed. You will receive a copy of any Order signed by the Commission. Thank you for your prompt attention to this matter. Should you have any further questions, please do not hesitate to contact me. In p Christopher S. Hotc iss, Staff Attorney Office of General Counsel - Enforcement (512) 463-6779 cc: Mary McDaniel 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AUSTIN, TExAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAX: 512/463-6989 http://www.rrc.state.tx.us RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER On this the day of , 2008, the above-entitled and numbered docket came on for consideration by the Railroad Commission of Texas ("Commission"). The Commission and Atmos Energy Corp., Mid-Tex Division ("Atmos") have agreed to an informal disposition of the matters under this docket through this Stipulation, Agreed Settlement and Consent Order ("Order"). The Commission has authority to informally dispose of this contested case docket through a Consent Order pursuant to TEx. Gov'T CODE Alvtv. § 2001.056(3). IN COMPROMISE AND SETTLEMENT OF THIS DOCKET, the Commission and Atmos do hereby agree and stipulate as follows: 1. Atmos is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos is a person as that term is defined by Title 16, Section 7.70(b)(1) of the Texas Administrative Code. 3. The Atmos distribution system is a pipeline facility as defined by Title 16, Section 7.70(b)(4) of the Texas Administrative Code. 4. Atmos owns and operates the subject pipeline facility, subject to Title 16, Section 7.70(b)(5) of the Texas Administrative Code. 5. The Commission and Atmos agree that the alleged violation as set forth in GUD Docket No. 09828, regarding Pipeline Safety Evaluation No. 2008-0829, is hereby settled and compromised under the terms of this Order. This Order affects no other matters. 6. The alleged violation by Atmos constitutes a violation of the provisions of Chapter 121 of the Texas Utilities Code or a safety standard or rule relating to pipeline facilities adopted thereunder. 7. Neither this Consent Order, nor any written or oral offer of settlement related thereto, nor any statement contained therein shall constitute evidence or an admission or adjudication of: (A) any fact or conclusion of law alleged in or relating to GUD Docket No: 09778; (B) any violation of any statute, rule or regulation or other wrongdoing or misconduct on the part of Atmos or any director, officer, agent, employee, contractor or affiliate thereof. The Commission shall not use this Order, any offer of settlement relating thereto, nor the Investigation as the basis for the institution of any further administrative or enforcement proceedings. 8. Atmos makes no admission of any alleged violation, but wishes to address the Commission's concerns under the terms of this Order. 9. The Commission wishes to further the goals of safety and the prevention and control of pollution within the State of Texas. 10. The Commission has considered any history of previous violations under Chapter 121 of the Texas Utilities Code by Atmos, the seriousness of any alleged violation, and any hazard to the health or safety of the public, and has determined that the facts of this case warrant an informal disposition of the Commission's concerns under the terms of this Order. 11. An opportunity for public hearing regarding the above entitled and numbered docket was given to Atmos, and Atmos has elected not to avail itself of the opportunity for public hearing. 12. The Commission hasjurisdiction to assess an administrative penalty against Atmos, pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 13. The alleged violation as set forth in Gas Utilities Docket No. 09828, regarding Safety Evaluation No. 2008-0829, has been placed into compliance by Atmos with the requirements of TEX. UTIL. CODE ANN. § 121.201 et seq., and Title 16, Chapter 7, of the Texas Administrative Code. 14. An administrative settlement penalty in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00) shall be recovered by the Commission for the alleged violation asserted against Atmos, as the operator of the subject pipeline facility. 15. Atmos has placed into the possession of or has caused to be placed into the possession of the Commission, funds in the amount ofTWENTY SIX THOUSAND DOLLARS ($26,000.00), for deposit in the General Revenue Fund, as payment of administrative penalties assessed. 16. The person signing hereunder for Atmos has authority to represent Atmos in this matter. Jurisdiction of the Commission over this docket having been established, and based upon the agreement of the parties, it is, therefore, ORDERED by the Railroad Commission of Texas, that Atmos is assessed administrative penalties in the amount of TWENTY SIX THOUSAND DOLLARS ($26,000.00), and that Gas Utilities Docket No. 09828 be informally disposed by this Order and closed. Done this day of , 2009. RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by Master Agreed Order dated APPROVED AS TO FORM AND SUBSTANCE: Atmos Energy Corp., Mid-Tex Division By: Title: , 2009.) MICHAEL L. WiLLIAMs, CHAIRMAN VICTOR G. CARRILLO, COMMISSIONER ELI2ABETH A. JONES, COMMISSIONER LINDIL C. FOWI.ER, JR., GENERAL COUNSEL LOWELL E. WILLIAMs, DIRECTOR . ENFORC,{yMENT SECTION^^..^ n. - \ " RAILROAD COYIMISSION OF TEXA ^^^. ^ ^ .., nf"D I- .,, OFFICE OF GENERAL C(JUNSEL December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ'Freeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective April 2, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3.1(a)(8), amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear-on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued againstyou without further notice. 1701 NORTH CONGRESS AvENUE TDD 800-735-2989 ORTDY512-463-7284 .r * POST OFFICE Box 12967 * AUSTIN, TExAs 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAx: 512/463-6989 http://www.rrc.state.tx.us Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attomeys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUII2E THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT. If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by January 16, 2009, I will recommend that the Commission settle this case with an agreed settlement order. Checks should be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotchkliss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 0 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same.in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15`h day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Robert W. -Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Bill Drury, Legal Assistan Office of General Counse - Enforcement Railroad Commission of Texas (512) 463-6858 0 0 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation .Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation . Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 .Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel -YEnforcement Railroad Commission of Texas (512) 463-6858 0 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 08-9828: ENFORCEMENT AC O, ^r,^`'AGAI^tS^R ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036^@/T1),,,,NO. 6716 FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETy ' .^ r ^.CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNE^ jy^^^ '1 J SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR § 192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. § 121.201 et seq. and § 121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facility as, defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company of Atmos Energy Corp., Mid-Tex Division, subject to 16 TEX. ADMIN. CODE §8.5(11). Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant'to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. §121.201(a)(1) and 16 TEX. ADMIN. CODE §8.1(Tex. R.R. Comm'n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated § §60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. 2. The notice of hearing required under Commission Rule §1.45 [16 TEX. ADMIN. CODE § 1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. § 91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], provides that: "(c) Each operator shall maintain,. modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the Commission's Gas Services Division conducted Safety Evaluation No. 2008-0829 on the McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. . This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKiinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch of the hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade 1 leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. -------- ------------- - -- ---- -- --- -- -- - - --- There were several access points to the sewer in the immediate area, including a large manhole in the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not, follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand "dug. M.J. Sheridan did not hand dig within 12 inches of the existing main. 5. By failing.to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ] at its McKinney 'Unit 3 3 97 gas distribution system (System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: 1. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount. as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 ♦ MICHAEL L. WiLLIaMs, CFIaIRMAN VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, D1RECroR SNFORCaSMENT SECTION 1\ 1 ^ RAILROAD COMMISSION OF TEXA OFFICE OF GENERAL COUNSEL December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBTFreeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin,,Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective April 2, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3.1(a)(8), amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear-on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued against you without further notice. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 ORTDY 5121163-7284 * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPI.OYER * PHONE: 512/463-6762 FAX: 512/463-6989 http://www.rrc.statc.tx.us Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attorneys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUIRE THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by January 16, 2009, 1 will recommend that the Commission settle this case with an agreed settlement order. Checks should be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotchldiss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division Robert W. B est, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 I b ✓r v ^gum Bill Drury, Legal Assistan Office of General Counsel` - Enforcement Railroad Commission of Texas (512) 463-6858 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 151 day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation .Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel -YEnforcement Railroad Commission of Texas (512) 463-6858 0 RAILROAD COMMISSION OF TEXAS G; `4 It GAS UTILITIES DOCKET NO. 08-9828: ENFORCEMENT AC^i^^rGAI^TS;T* ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 03 65^/I^pNO. 67^^6 FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFET^f .CFR" §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINS"F^^ ' SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR § 192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. § 121.201 et seq. and § 121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE § 8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facilityas defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company of Atmos Energy Corp., Mid-Tex Division, subject to 16 TEX. ADMIN. CODE §8.5(11). Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. § 121.201(a)(1) and 16 TEX. ADMIN.,CODE §8.1 (Tex. R.R. Comm'n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. 2. The notice of hearing required under Commission Rule §1.45 [16 TEX. ADMIN. CODE § 1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. §91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC §8.1], provides that: "(c) Each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the Commission's Gas Services Division conducted Safety EvaluationNo. 2008-0829 on the McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch of the hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade I leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. There were several access points to the sewer in the immediate area, including a large manhole in the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the .atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand dug. M.J. Sheridan did not hand dig within 12 inches of the existing main. 5. By failing to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC § 8.1 ] at its McKinney *Unit 3397 gas distribution system (System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. . GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: 1. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 I 0 0 MICHAEL L. WILLIAMS, CFIAIRmIN LINDIL C. FOWI.ER, JR., GENERAL COUNSEL VICTOR G. CARRILLO, COMMISSIONER LOWELL E. WILLIAMS, DIRECTOR ELIZABETH A. JONES, COMMISSIONER ENFORC,jy'MEN7' SECTION G - \ ` RAILROAD COMM ISSION OF TEXAS^^,', ^ - ^ ^ ^^^$'^ OFFICE OF GENERAL COUNSEL . r ^^'•.,,r' December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ'Freeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin,.Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective April 2, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3.1(a)(8), amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued against you without further notice. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 ORTDY512-463-7284 * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAx: 512/463-6989 http://www.rrc.state.tx.us I Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attorneys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUIRE THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT. If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by January 16, 2009, I will recommend that the Commission settle this case with an agreed settlement order. Checks should,be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotchl^ss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 70060810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 14 Bill Drury, Legal Assistan^ Office of General Counse - Enforcement Railroad Commission of Texas (512) 463-6858 1 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation .Mid-Tex Division Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel -YEnforcement Railroad Commission of Texas (512) 463-6858 0 RAILROAD COMMISSION OF TEXAS GAS UTILITIES*DOCKET NO. 08-9828: ENFORCEMENT AC Ml_ y,A„.GAI^TS. ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 03%T^,^VO. 67"^6 FOR ALL EGED VIOLATION OF COMMISSION PIPELINE SAFE^E ^'^.CFR` §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINN^^'`^,^P)S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR § 192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. § 121.201 et seq. and § 121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facility as defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company of Atmos Energy Corp., Mid-Tex Division, subject to 16 TEX. ADMIN. CODE §8.5(11). Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. § 121.201(a)(1) and 16 TEX. ADMIN. CODE § 8.1 (Tex. R.R. Comm' n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated § §60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. c 2. The notice of hearing required under Commission Rule § 1.45 [16 TEX. ADMIN. CODE §1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. § 91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], provides that: "(c) Each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the. Commission's Gas Services Division conducted Safety Evaluation No. 2008-0829 on the McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. . This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the k explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch of the hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade 1 leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. There were several access points to the sewer in the inmediate area, including a lnrge manhole in the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand dug. M.J. Sheridan did not hand dig within 12 inches of the existing main. 5. By failing.to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ] at its McKinney 'Unit 3397 gas distribution system ( System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. r PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: 1. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC § 8.1 ]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 j MICHAEL L. WILLIAMS, CsAIRM.W VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LowELi. E. WILLIAMS, DIREcroR ENFORG6A1ENT 3ECTION RAILROAD C OMMISSIO N OF XAS ^ " ^: ^ OFFICE OF GENERAL COUNSEL December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBTFreeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin,,Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828:. ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective April 2, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3. 1 (a)(8),. amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear'on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued against you without further notice. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AusTIN, TExns 78711-2967 AN EQUAT. OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FevX: 512/463-6989 http://www.rrc.state.tx.us 0 Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. • Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attomeys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUIRE THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by January 16, 2009, I will recommend that the Commission settle this case with an agreed settlement order. Checks should be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotchkliss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15`h day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Bill Drury, Legal Assistan Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6858 0 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 15'' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel -YEnforcement Railroad Commission of Texas (512) 463-6858 • RAILROAD COMMISSION OF TEXAS GAS UTILITIESDOCKET NO. 08-9828: ENFORCEMENT AC %OkA„GANST^ ^, tf ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 0365^O. j1 674-6 FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFET^ ?+.^ §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNE^^ SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ^` r CFR ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR § 192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. §121.201 et seq. and §121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE § 8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facility as defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company of Atmos Energy Corp., Mid-Tex Division, subject to 16 TEX. ADMIN. CODE §8.5(11).. Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. § 121.201(a)(1) and 16 TEX. ADMIN. CODE §8.1(Tex. R.R. Comm'n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. 2. The notice of hearing required under Commission Rule § 1.45 [16 TEX. ADMIN. CODE § 1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. § 91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC §8.1], provides that: "(c) Each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the Commission's Gas Services Division conducted Safety Evaluation No. 2008-0829 onthe McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. , This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKiinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch ofthe hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade 1 leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. There were several access points to the sewer in the immediate area, including a large manhole in the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand dug. M.J. Sheridan did not hand dig within 12 inches of the existing main. 5. By failing to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ] at its McKinney *Unit 3397 gas distribution system (System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: 1. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 , MICHAEL L. WILLIAMS, CUAIRMAN VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LINI)IL C. FOWI.ER, JR., GENERAL COUNSEL LOWELL E. WILLIAMs, DIRECT'OR ENFORC ^„,,^5'MENT SECTION RAILROAD COMMISSION OF TEXAS,^ December 15, 2008 Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ"Freeway, Ste 160 Dallas, TX 75240 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 Kim R. Cocklin,Sr. Vice-Pres, Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 RE: GAS UTILITIES DOCKET NO. 09828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE-49 CFR §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS NOTICE OF OPPORTUNITY FOR HEARING Information on file in our offices indicates that Atmos Energy Corp., Mid-Tex Division, has violated provisions of the Railroad Commission Pipeline Safety Rules, the Texas Natural Resources Code, or the Texas Water Code, as set forth more fully in the attached Original Complaint. This letter is notice of the captioned docket pending against Atmos Energy-Corp., Mid-Tex Division. According to Section 1.49 of the Commission's General Rules of Practice and Procedure [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.49] which was adopted effective April 2, 1996, you may, within 30 days of the date of service of this notice, file an answer or request a hearing to contest the allegations of the Original Complaint. The date of service of this notice is computed under Statewide Rule 1(a)(8) [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 3.1(a)(8), amended effective May 22, 2000. You may hire an attorney or other representative or choose to appear-on your own behalf. Section 1.49 also provides that if, on the 31st day after the date of service, you have not entered into an agreed settlement order, filed an answer to the Original Complaint, requested a hearing, or if you fail to appear at the hearing set, a default final order may thereafter be issued against you without further notice. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 ORTDY512-463-7284 * POST OFFICE $OX 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE; 512/463-6762 FAX: 512/463-6989 http://www.rrc.state.tx.us 0 Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 9828, Page 2 The Railroad Commission Enforcement Section docket file contains records and inspection reports which will be offered into evidence in this case. The file is available for inspection at any time during business hours. To arrange for inspection or copying of this file, please call Bill Drury, at (512) 463-6858. Under § 81.0531, Texas Natural Resources Code, the Commission may assess an administrative penalty of up to $10,000.00 per day per violation. Finally, referral of the matter to the Attorney General for collection and enforcement could result in additional civil penalties, court costs, and attomeys' fees being adjudged against you. UNDER TEXAS NATURAL RESOURCES CODE SECTION 91.114, AS AMENDED JUNE 20, 2003, THE FAILURE TO PAY PENALTIES OR REIMBURSEMENT ASSESSED IN A COMMISSION FINAL ORDER, OR TO COMPLY WITH THE REMEDIAL DIRECTIVES IN THE ORDER, SHALL REQUIRE THE COMMISSION TO REFUSE PERMIT APPLICATIONS TENDERED BY ATMOS ENERGY CORP., MID-TEX DIVISION AND PERSONS WHO OWN POSITIONS OF OWNERSHIP OR CONTROL IN ATMOS ENERGY CORP., MID-TEX DIVISION, AND SHALL ALSO RESULT IN REVOCATION OF ATMOS ENERGY CORP., MID-TEX DIVISION'S AND SUCH PERSONS' RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. OFFER OF SETTLEMENT If you correct the violations set forth in the Original Complaint and pay an administrative penalty of $26,000.00 (one 14(b)(2) violation at $1,000 plus reckless enhancement of $25,000) by. January 16, 2009, I will recommend that the Commission settle this case with an agreed settlement order. Checks should be made out to the "Railroad Commission of Texas" and should include the docket number on the check. When the Commission considers my recommendation, it may either accept it, reject it, or instruct me to seek a different administrative penalty. IF YOU DO NOT SETTLE THIS CASE, FILE AN ANSWER TO THE ORIGINAL COMPLAINT, REQUEST A HEARING, OR APPEAR AT THE HEARING SET, A DEFAULT FINAL ORDER MAY BE ISSUED AGAINST YOU WITHOUT FURTHER NOTICE. Christopher S. Hotchldiss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 0 0 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint, in Gas Utilities Docket No. 9828, on the persons named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 15' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 John.R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Bill Drury, Legal Assistan Office of General Counse - Enforcement Railroad Commission of Texas (512) 463-6858 CERTIFICATE OF SERVICE I hereby certify that I have served a copy of this Notice of Opportunity for Hearing, together with a copy of the Original Complaint in Gas Utilities Docket No. 9829, on the persons named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 15`' day of December, 2008, properly addressed as follows: Atmos Energy Corporation Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 CM No. 7006 0810 0000 4587 9694 Corporation Service Company, R.A. Atmos Energy Corporation Mid-Tex Division 701 Brazos St., Ste 1050 Austin, TX 78701 CM No. 7006 0810 0000 4587 9700 Robert W. Best, CEO,Pres/Chair Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9724 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9731 Kim R. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation .Mid-Tex Division 5430 LBJ Freeway; Ste 1800 Dallas, TX 75240 CM No. 7006 0810 0000 4587 9717 Patti Richards, Vice-Pres. Tech. Services Atmos Energy Corp. Mid-Texas Division P.O. Box 223705 Dallas, TX 75222-3705 Mary McDaniel - Austin Ramona Nye - Austin Bill Drury, Legal Assistant Office of General Counsel -YEnforcement Railroad Commission of Texas (512) 463-6858 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 08-9828: ENFORCEMENT AC ^^^f r AGAI^TS^T^, ^^,^. ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 0365^%Y.^O. 67'^^6X y FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFET^^'^,,CFR^ • ^. §192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINN SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS ORIGINAL COMPLAINT Comes now the Railroad Commission of Texas ("the Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Operator No. 036589/ID No. 6776)) ("Respondent") with alleged violations of Commission Pipeline Safety Rule 49 CFR § 192.13(c), [adopted by reference through 16 TAC §8.1], at its McKinney Unit 3397 of McKinney & HP's System 610969, natural gas distribution system in Collin County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. UTIL CODE ANN. §121.201 et seq. and §121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE § 8.1 et seq. Respondent is a "gas utility" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.1 et seq. For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Atmos Energy Corp., Mid-Tex Division, is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The McKinney Unit 3397 of McKinney & HP's System 610969, is a gas pipeline facility/distribution facility as defined by 16 TEX. ADMIN. CODE §8.5(23). The McKinney Unit 3397 of McKinney & HP's System 610969, is the gas company ofAtmos Energy Corp., Mid-Tex Division, subjectto 16 TEX. ADMIN. CODE §8.5(11). Resporident is the person who is responsible for the maintenance or operation of a gas distribution facility within the State of Texas, or of the transportation of gas within the State of Texas, regulated pursuant to TEX. UTIL. CODE ANN. § 121.206, TEX. UTIL. CODE ANN. § 121.201(a)(1) and 16 TEX. ADMIN. CODE §8.1 (Tex. R.R. Comm'n, General Applicability and Standards). Respondent is not a gas pipeline facility or engaged in the transportation of gas subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, the Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. 1 2. The notice of hearing required under Commission Rule § 1.45 [16 TEX. ADMIN. CODE § 1.45], may be served on Respondent at the addresses reported most recently to the Commission and the Secretary of State of Texas by the Respondent, (TEX.NAT. RES. CODE ANN. §91.142), by Regular and by Certified Mail, Return Receipt Requested, addressed to: Atmos Energy Corp., Mid-Tex Division, P.O. Box 223705, Dallas, TX 75222-3705. Notice may be served by regular and Certified Mail on the Registered Agent for Respondent, addressed to Corporation Service Company, Registered Agent for Atmos Energy Corp., Mid-Tex Division, 701 Brazos St., Ste 1050, Austin, TX 78701. Notice may also be served on the persons reported to the Commission, and Secretary of State of Texas, to be its Chairman of the Board, President and CEO: Robert W. Best, ' Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; its Senior Vice President and CFO: John P. Reddy, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240; and its Senior Vice President, Utility Operations: Kim R. Cocklin, Atmos Energy Corp., Mid-Tex Division, 5430 LBJ Freeway, Ste 1800, Dallas, TX 75240. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule § 192.13(c) [adopted by reference through 16 TAC § 8.1 ], provides that: "(c) Each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part." 2. On May 16, 2008 through July 31, 2008, the Pipeline Safety Section of the Commission's Gas Services Division conducted Safety EvaluationNo. 2008-0829 on the McKinney Unit 3397 gas distribution system (System ID No. 610969), owned and operated by Atmos Energy Corp., Mid-Tex Division. On August 1, 2008, the Commission issued its Final Report, Accident Investigation Report No. 08-0829. . This report describes an a series of three explosions and fires that occurred at about 5:35 P.M. (two of the explosions) and 5:46 P.M. (third explosion) on May 16, 2008, at or near the intersection of Fenet St. and Throckmorton St., a residential area in McKinney, Texas. There were three homes significantly affected by the explosions and fires, 613 and 615 Fenet St., and 601 Throckmorton St. The evaluation revealed that a contractor for Respondent bored through a 3" polyethylene natural. gas distribution main. The contractor, M.J. Sheridan, was hired by Respondent to replace the 3" line with a 4" line, but hit the 3" line with a directional boring rig. As a result, gas migrated into the sewer system, and thereby, into the three homes, igniting from an unknown source. There were initially three injuries as a result of the 0 explosions and fires, but during the course of the investigation, one person died as a result of her injuries. Subsequently, another victim died in October of 2008 from his injuries in the explosion. 3. The Commission's Report No. 08-0829, also showed that once the 3" main was struck at 4:30 P.M., M.J. Sheridan notified Atoms dispatch ofthe hit at 4:38 P.M. A service technician was notified and arrived on-site at 5:06 P.M. to respond to the Grade 1 leak, and began to leak investigation. However, the service technician did not check the sewer system in this investigation. ----------------- -- - --_- _ - -- -_. - __ There were several access points to the sewer in the immediate area, includ ing a large manhole in --- the middle of Fenet St., west of Throckmorton, and several cleanouts along the property lines of the homes. The Commission's Report noted that the sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate without the danger of ignition. Gas migration, therefore, was unknown, and the sewer system should have been checked during the investigation. 4. M.J. Sheridan, the contractor for Respondent, did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directions boring process begins. The Scope of Work stipulated that direct within 12 inches of the existing main be hand'dug. M.J. Sheridan did not hand dig withiri 12 inches of the existing main. 5. By failing.to properly ensure that its contractor was following existing digging and/or excavation procedures, and by failing to properly follow plans, procedures and/or programs required by Commission Gas Safety Rules, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ] at its McKinney 'Unit 3397 gas distribution system ( System ID No. 610969), Collin County, Texas. Respondent's violation of Commission Pipeline Safety Rule 49 CFR § 192.13 (c) [adopted by reference through 16 TAC § 8.1 ], is serious and a hazard to the public health and safety. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN. § 121.201 or safety standards or rules relating to the distribution of gas and gas pipeline facilities adopted under that section, is serious and constitutes a hazard to the health or safety of the public. ' 0 0 PREVIOUS VIOLATIONS BY RESPONDENT The Respondent charged with the alleged violation herein recited has no Final Orders against it for violation of Commission rules. GOOD FAITH Respondent has acted in bad faith because it failed to timely correct alleged Commission pipeline safety rule violation and failed to adequately explain its inaction to the Commission. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission Gas Services Pipeline Safety Division, prays that notice be given and a hearing be held to consider the above-referenced alleged violation, and requests the Commission to thereafter enter an order: l. assessing Respondent an administrative penalty of $27,000.00 ($2,000 for violation of Pipeline Safety Rule 49 CFR § 192.13(c) [adopted by reference through 16 TAC §8.1]; plus $25,000 Enhancement for Reportable Incident/Accident), or such other amount as may be established by the evidence; 2. directing Respondent to place the subject pipeline into compliance with all Commission Pipeline Safety Rules; and 3. ordering any other relief to which, under the pleadings and the evidence, the Enforcement Section may show itself entitled. Christopher S. Hotkhkiss, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 24050785 Telephone No. (512) 463-6779 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: December 15, 2008 # • MICHAEL L. WILLIAMS, CHAIRMrLV LINDIL C. FOWLER, JR., GENERAL COUNSEL VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LOWELL E. WILLIAMS, DIRECTOR ENFORCEMENT SECTION RAILROAD COMMISSION OF TExAs OFFICE OF GENERAL COUNSEL December 15, 2008 Ms. Patti Richards V.P. Technical Services Atmos Energy Corp., Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Re: GAS UTILITIES DOCKET NO. 08-9828: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (OPERATOR NO. 036589/ID NO. 6776) FOR ALLEGED VIOLATION OF COMMISSION PIPELINE SAFETY RULE 49 CFR.§192.13(C) AT ATMOS ENERGY/MCKINNEY UNIT 3397 OF MCKINNEY & HP'S SYSTEM 610969, MCKINNEY, COLLIN COUNTY, TEXAS Dear Ms. Richards: As you may be aware, the Gas Utilities Safety Division has referred a docket against your company to the Enforcement Section of the Commission. Pipeline Safety Evaluation No. 2008-0829 was conducted by Commission personnel on McKinney Unit 3397 of McKinney & HP's System 610969 as a response to an incident, or other condition requiring our staff to conduct an investigation. The evaluation revealed a major violation of Commission Pipeline Safety Rules. I have detailed that violation in the attached complaint. Penalty guidelines for this very serious violation support the staff-recommended penalty of $2,000 for the 49 CFR 192.13(c) violation. In addition, an enhancement of $25,000 for a reportable incident or-accident, is added, which results in an administrative penalty of $27,500. However, to avoid a hearing in the matter, it is the standard procedure of Enforcement to offer to settle this docket for a lesser penalty of $26,500. (The enhancements may not be reduced). If you wish to settle this matter with an Agreed Order, I will prepare the necessary document. If you do not agree to this disposition within 14 days of this letter, we will proceed to a hearing at which the larger penalty will be sought. Your company's cooperation in resolving this matter is appreciated. r; Christopher S. Hokhkiss, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6779 cc: Mary McDaniel, Austin 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 AN EQUAL OPPORTUNITY EMPLOYER * PHONE: 512/463-6762 FAx: 512/463-6989 http://www.rrc.state.tx.us • • . MICHAEL L. WILLIAMS, CH"RMAN VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LowELL E. WILLIAMS, DIRECroR ENFOSC,(y'MENT SECTION RAILRO.AD COMMISSION OF TEXA OFFICE OF GENERAL COUNSEL ^c,j.. Lz:) P AD CC;Z,1F;;1^ _10l11 OrC I ^=;^C ^ ° Uec,i°n - Office of Generci Coun;Al P.t9: CriX:]^ +i7 En{^f&^ A7X73711-2^67 4 = ...._ 7006 0810 []00[l 4587 9731 02M-02-M•1540 Domestic Return Receipt COMPLETE THIS SECTION ON DELIVERY SENS: COMPLETE THIS SECT/ON ' ■ Complete items 1, 2, and 3: Also complete Item 4 if Restricted Delivery is desired. I[I Pr(ntouur name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the maiipiece, or on the front if space permits. 1. Article Addressed to: Kim P. Cocklin, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 x.. O Agent / ^L7 Addressee G. pate of Delivery ne) D. Is delivery address different from item 1'? If YES, enter delivery address below; 7006 0810 0000 4587 9717 Certified CSH:01/16/09 GUD-09828 Mail Receipt fot Merchandise _ ❑ Insured Mail ❑ C.O.D. 4. Restricted Delivery? (Extra Fee) lttttilttltl,ttlttttlt,tilttltiltlt„li,tl,t,l,llttl,t,il ^ltti Ye ❑ No ❑ Yes 7006 0810 0000 4587 9717 P$ Form 3811, February 2004 Domestic Return Receipt 102595-02-M-154 U.S. Postal ServiceTM m CERTIFIED MAtLTM RECEIPT U.S. Postal Service3M r9 r- D^ N CERTIFIED MAILTM RECEIPT r^ (Domestic Mail Only; No Insurance Coverage Provided) C^I]^ (Domestic Mail Only; No Insurance Coverage Provided) [CO N -I- Return Receipt Fee (Endorsement Required) Restricted Delivery Fee (Endorsement Required) Restricted Delivery Fee (Endorsement Required) Sent To ^freeet,Ap£No-=--------------------- fSentTo -------- ------------------------------ --- I orPO Box No. F................................1..............-........................-..^. d State, Z/Po-4 PS Form 3800, June 2002 Postmark Here Return Receipt Fee (Endorsement Required) See Reverse for Instructions Sveeetilpt No-----------------°-°---- ,•-•-----••------------------•----°-----• or PO BoxNo. --- - -f - ^- ^- - - - - - - ° City State,°Z/P+4 ^ PS Form 3800, June 2002 - °- -- - ° See Reverse for Instructions First-Class M r- UNITED STATES POSTAL SERVICE • Sender:,Please print your name, address, and ZIP+4 in C^> Rtllc.r^-.CAp s"iG'tt` ^^Os' P.O. t3ox 1,Qn7 stin, TX 7£711-LO67 Postage & Fees Paid SE[\{M: COMPLETE THIS SECTION USPS Permit No. G-10 ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. this box • ■ Attach this card to the back of the mailpiece, or on the front if space permits. #OPJ G;= Tl=y6S O,rrce of Gerrer4t C a^nsol COMPLETE THIS SECTION ON DELlVERY Agent ❑ Addressee 0. Datp of L)elivery 0, l(G (oY_! ❑ Yes Q(No D. Is delivery address different from item 1? If YES, enter delivery address below: 1. Article Addressed to: 7006 0810 0000 4587 9700 Corporation Service Company, R. A. Atmos Energy Corp. Mid-Tex Division 701 Brazos St., Ste, 1050 Austin, TX 78701 Certified CSH:01/16/09 GUD-09828 y.-❑ Insured Mail ass Mail .j „.mrn Receipt for Merchandise ❑ C.O.D. ❑ Yes 4. Restricted Delivery? (Extra Fee) iLii91}}tili}}i}}t^tf}}113}3111}Jf}}^^f}11}r3rl1}i^i!!f^!#S!! 2. Art' (h Number r from service labe!) PS Form 3811, February 2004 UNITED STATES POSTAL SERVICE • Sender:,Please print your name, address, and ZIP+4 in f: iw- c..^ tw) -- . TRA%L+;c,`, t1D CG^lf1r!#^^t^iJ OaCTy;tAS Office of Cenercf Cctie34r P^} :12%7 1X78711-2^ ; 7 ^. 7006 0810 ❑ 1100 4587 9700 Domestic Return Receipt First-Class Ma Postage & Fees Hai r SEN^: COMPLETE THIS SECTION USPS Permit No. G-10 ■ Co!}plete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse this box • so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 102595-02-M-1540 COMPLETE THIS SECTION ON DELIVERY A. Signature ❑ Agent ❑ Addressee eceived by (Printed Name) C. Date of Delivery f 2) [ 7b(^ D. Is delivery address different from item 1? '0 Yes ❑ No If YES, enter delivery address below: 1. Article Addressed to: Robert W. Best, CEO/Pres./Chair. ' Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 7006 0810 0000 4587 9724 Certified CSH:01/16/09 GUD-09828 ❑ Insured Mail ail :eipt for Merchandise ❑ C.O.D. 4. Restricted Delivery? (Extra Fee) ❑ Yes 1^}t}11ti{}S}},{}},13i}}11}11}1111}}}1}1i1}}{1 1 711 t13}111A}1 2. Art, (7) 'Vumber from service lah^" PS Form 3811, Februai_ 0000 4587 9724 701316 0810e urn Receipt 102595-02-M-1540 U.S. Postal ServiceTM O.S. Postal ServiceTM CERTIFIED MAIL RECEIPT TM (Domestic Mail Only, No Insurance Coverage Provided) Return Receipt Fee (Endorsement Required) Postmark Here ^ CERTIFIED MAIL RECEIPT r%-- (Domestic Mail Only; No Insurance Coverage Provided) TM IT' Postmark Here Return Receipt Fee (Endorsement Required) Restricted Delivery Fee (Endorsement Required) Restricted Delivery.Fee (Endorsement Reqwred) SentTo ^treet Apf No.; ---------------------------------------------------------- °--------.orPOBoxNo. ----------------------------- '=-----------------------------°--°----------°----°Ciry, State, Z/Pt4 PS Form 3800, June 2002 See Reverse for Instructions ^Ap£No.l ° --orPOBoxNo. Ciry Sta^e, ZIP+4 -- ..... ...... . .. .°....- - ^ ..-° ....... ............................ . PS Form 3800, June 2002 ------------ `•I See Reverse for Instructions UNITED STATES POSTAL SERVICE First-Class Ma. Postage & Fees Paid USPS Permit No. G-10 Sender: Please-print your name, address, and ZIP+4 in this box • c-N ^ r..^ t,._ A#Lt^^data CO :u1fJN OF Tr;CFS ^E^Jarcir,un! Se.iort - Office of Cener;:l Co:;nsel P.07o:5x 12:'dl AW1ii, TX 7U711-z.CiQ7 1^}}}i^}!t}Ft}!1}}}}(}}}t}i}!}^^F^FI}}^1}}}}}/}{^}}lI}fl^}^i}f 7006 0810 0000 4587 9694 nrn ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Vota livery D. Is delivery address different from item 1? If YES, enter delivery address below: 1. Article Addressed to: Atmos Energy Corp Mid Tex Division P.O. Box 223705 Dallas, TX 75222-3705 o ^n CD r ent ❑ Addressee ❑ Yes ❑ No 7006 0810 0000 4587 9694 Geritied CSH:01 / 16/09 GUD-09828 ❑ Insured Mail _ ....... .......npt for Merchandise ❑ C.O.D. 4. Restricted Delivery? (Extra Fee) 2. Ar'` (7. ❑ Yes Number rfromservicE PS Form 3811, February2004 7006 0810 DDCID 4587 9694 Domestic Return Receipt 102595-02-M-1540 ; NAME AND ADDRESS OF SENDER 0 OFFICE OF GENERAL COUNSEL - ENFORCEMENT RAILROAD COMMISSION OF TEXAS P.O. DRAWER 12967 AUSTIN, TX 78711-2967 ARTICLE NUMBER OF ARTICLE 1 7006 0810 0000 4587 9694 2 7006 0810 0000 4587 9700 CERTIFIED Jo NAME OF ADDRESSEE C3 lac C^ `b 3 TYPE OF MAIL: 7006 0810 0000 4587 9717 010 POSTAGE FEE R.R. FEE REMARKS Atmos Energy Corp Mid Tex Division P.O. Box 223705 Dallas, TX 75222-3705 2.70 2.20 GUD 0928 CSH 01/16/09 Corporation Service Company, R. A. Atmos Energy Corp. Mid-Tex Division 701 Brazos St., Ste. 1050 Austin, TX 78701 2.70 2.20 GUD 09828 CSH 01/16/09 Kim P. Cocklin, Sr. Vice-Pres. 2.70 2.20 GUD 09828 Atmos Energy Corporation 4 7006 0810 0000 4587 9724 5 7006 0810 0000 4587 9731 CSH 01/16/09 cJ Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas,-TX 75240 1^0 Robert W. Best, CEO/Pres./Chair. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 2.70 2.20 GUD 09828 CSH 01/16/09 John R. Reddy, Sr. Vice-Pres. Atmos Energy Corporation Mid-Tex Division 5430 LBJ Freeway, Ste. 1800 Dallas, TX 75240 2.70 2.20 GUD 09828 CSH 01/16/09 ^ ^-- TOTAL NUMBER OF TOTAL NUMBER OF PIECES LISTED BY PIECES RECEIVED BY SENDER' POST OFFICE POSTMASTER, PER (NAME OF RECEIVING EMPLOYEE) ' 5 . The full declaration ofvalueis required on all domestic and intemational mail registered mail. The maximum idemnity payable for the reconstruction of nonnegotiable documents under Express Mail document reconstruction insurance is s500 per piece subject to additional limitations for multiple pieces lost or damages in a single catastrophic occurrence. The maximum idemnity payable on Express Mail merchandise insurance is $500, but optional Express Mail Service merchandise insurance is available for up to $5,000 to some, but not all countries. The maximum idemnity payable is $25,000 for registered maH. See DomesricMailMaima! R900, S913, and S921 for limitations of coverage on insured and COD mail. See laremationalMailManual for limitations ofcoverage on international mail. Special handling charges apply only to Standard Mail (A) and Standard Mail (B) parcels. Pipeline Safety Docket Referral DocketNo: 08-9828 Operator: ATMOS ENERGY CORP., MID-TEX DIVISION Region Referral Date: Attorney: Operator Type: Gas Distribution Supporting Documents ❑ d Safety Eval No: ❑ Prev Safety Eval No: ❑ Accident/Special No: ❑ POC Received 2008-0829 Date POC Recd: Num Of POC's Recd: Date: 0 Status d Referred To Legal ❑ 10/1/2008 ❑ Hearing ❑ Legal Negotiating ❑ Agreed Order ❑ Complaint Filed ❑ PFD Comments: Dismissal Violation 192-013-003 is to be fined $2000 and violation 192-805-010 is to be fined $1000 for ,a total of $3000. Mary McDaniel has recommeded a 50% reduction for settlement before hearing which would bring the total to $1500. She would also like to add a $25,000 penalty for this being a reportable incident or accident. The grand total recommended penalty is $26,500 (please see the penalty calculation worksheet) ❑ Non-Monetary Penalty: Total Violation Penalty: $0.00 Total Enhanced Penalty: $3,000.00 Total Docket Penalty: $3,000.00 Page 1 of 3 Penalty Amount Collected: Form PS-53 $0.00 10/1/2008 • DocketNo: 08-9828 Operator: ATMOS ENERGY CORP., MID-TEX DIVISION Violation No: Violation Code: I 192-013-003 Plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified, or followed as necessary. Requirement: 49 CFR 192.13(c) Violation Note: : The investigation of this incident determined the operator's emergency plan was not implemented correctly. The operator must conduct actions that are directed toward protecting people first and then property. The service technician that responded to the Grade 1 leak did not investigate the sewer system when a known leak existed. The sewer system is a critical system that must be checked for gas migration because it has direct path to homes. The service technician took readings in the storm drain and other utility substructures and inside the Holy Family School. M.J. Sheridan, the contractor for Atmos did not follow procedures stipulated under the Atmos Utility Operations Handbook. The procedure requires utility lines to be exposed at cross points before the directional boring process begins, The Scope of Work stipulated that dirt within 12 inches of the existing main be hand dug. M.J, Sheridan acknowledges in their submission of the Third Party Damage Information Report dated 8/1/08, that failure to identify and excavate the ,affected facility was a factor that potentially contributed to the damage. Atmos failed to ensure that the contractor was correctly following boring procedures. First Day Of Non-Compliance: Days Out Of Compliance: Compliance Date: Penalty Rate Per Day: Enhanced Penalty Amount: $2,000.00 for $0.00 Reportable Incident / Accident Correction Verified: Violation No: 2 Violation Code: 192-805-010 The operator did not ensure that pipeline personnel were qualified to perform covered tasks as required in the written qualification program. Requirement: 49 CFR 192.805 (b) Viola n Note: The operator did not ensure the individual performing the covered task was qualified under the operator qualification plan, The prior Atmos Mid-Tex Operator Qualification plan does not include directional boring as a covered task, However, the new Atmos Enterprise Operator Qualification t.plan, which has been in place since January 1, 2008, has directional boring as a covered task. 14an Estrada, the individual operating the boring rig for M.J. Sheridan was not qualified to perforr.n this covered task. First Day Of Non-Compliance: Days Out Of Compliance: Compliance Date: Penalty Rate Per Day: Enhanced Penalty Amount: $1,000.00 for $0.00 Reportable Incident / Accident Correction Verified: Page 2 of 3 Form PS-53 10/1/2008 DocketNo: 08-9828 Operator: ATMOS ENERGY CORP., MID-TEX DIVISION wwwwxxxwxwxxxwwwwwwwxwxxwwxxwwwwwwwwwwwwwwxwwwxwxwwwwwwwwwwwwwwxwwwwwwwwwwwwwwwwxwxwwwwxwwwwwwwwwwwwwwwwwwxwwwwxwwwwww End Of Referral Regional Supervisor Mary cDaniel 2, aTo ^ ^1 ^^^C o rn^^%^S ^ ^ ^ ^^ a ol,u, 0) ^,^^r rn --A^ ktaA_V^ Page 3 of 3 Form PS-53 10/1/2008 • • TO BE FILLED OUT BY MARY Docket # Please circle Enhancement Reason: Impacted Residential/Public Area rr reer. ^.^ r.srrr^ ^. ,n.•.., . :..,. , '__..,^..= Reportable Incident/Accicti Exceeding Pressure Control Limits Time Out of Compliance Affected Area in Excess of 100 Square Ft. Reckless Conduct of Operator Intentional Conduct of Operator Straight Penalty Not Per Day Rated xaiizoaa t-ommission ot '1#6 I Page 1 of 4 0 Figure: 16 TAC §8.245(i) Table 5. Penalty calculation worksheet. [ ypical penalties from Table 1 _ 1. 16 TAC §3.70 - Pipeline Permits Required $1,000 1 s 2. 16 TAC §8.1 - General Applicability and Standards $5,000 3. 16 TAC §8.51 - Organization Report $1,000 4. 16 TAC §8.101 - Pipeline Integrity Assessment and Management Plans $5,000 $ 5. 16 TAC §8.105 - Records $5,000 $ 6. 16 TAC §8.110 - Operations and Maintenance Procedures $5,000 $ 7. 16 TAC §8.115 - Construction Commencement Report $5,000 $ 8. 16 TAC §8.201 - Pipeline Safety Program Fees 10% of amount due $ $5,000 $ $1,000 $ 11. 16 TAC §8.210 - Reports $5,000 $ 12. 16 TAC §8.215 - Odorization of Gas $5,000 11 $ 13. 16 TAC §8.220 - Master Metered Systems $5,000 $ 14. 16 TAC §8.225 - Plastic Pipe Requirements $5,000 $ 15. 16 TAC §8.230 - School Piping Testing $1,000 9. 16 TAC §8.203 - Supplemental Regulations 1 $ 10. 16 TAC §8.205 - Written Procedure for Handling Natural Gas Leak Complaints 16. 16 TAC § 8.23 5 - Natural Gas Pipelines Public http://info.sos.state.tx.us/fids/16 0008 0245-5.html F 1/13/2006 Kai! roaa t,ommission ot"V I;mips Page 2 of 4 $5,000 $ $10,000 $ $5,000 $ $5,000 $ Education and Liaison 17. 16 TAC §8.240 - Discontinuance of Service [iii. 49 CFR 192.613 - Continuing surveillance _ 19. 49 CFR 192.619 - Maximum allowable operating pressure 20. 49 CFR 192.625 - Odorization of gas 21. 49 CFR Part 192 - Transportation of Natural and $5,000 ^ z ^ 210pb ^, ^^2• ^^ Other Gas by $1,000 Pipeline: Minimum Federal ^^ $ () 0L Safety Standards $1,000 22. 49 CFR Part 193 - Liquefied Natural Gas Facilities 23. 49 CFR Part 199 - Drug and Alcohol Testing $ 500 1 1 F $ 24. Subtotal of typical penalty amounts from Table 1 (lines 1 - 23, inclusive) % $ Wp 25. Reduction for settlement before hearing: up to 50% of line 24 amt. 9 26. Subtotal: amount shown on line 24 less applicable settlement reduction (line 25) $ ^S b^1 Penalty enhancement amounts for threatened or actual pollution or safety hazard from Table 2 27. Bay, estuary, or marine habitat $5,000 -$ $25,000 28. Impact to a residential or public area $1,000 $15,000 $ 29. Hazardous material release $2,000 $25,000 $ 30. Reportable incident or accident $53p00 http://info.sos.state.tx.us/fids/16 0008 0245-5.htm1 1/13/2006 xau wau ^-ommtssion ot '1amp Page 3 of 4 $25,000 31. Exceeding pressure control limits $5,000 $20,000 $ $10 / square foot $ $100-$2,000 / mo. $ Penalty enhancements for severity of violation from Table 2 32. Affected area exceeds 100 square feet 33. Time out of compliance 34. Subtotal: amount on line 26 plus all amounts on lines 27 through 33, inclusive $ Penalty enhancements for culpability of person charged from Table 2 35. Reckless conduct of person charged 36. Intentional conduct of person charged double line 34 anit. $ triple line 34 amt. $ Penalty enhancements for number of prior violations within past seven years from Table 3 37. One 1 38. Two ilIF [39.Tiiree 11 40. Four 41. Five or more IF $1,000 Fs I $2,000 [$ $3,000 $ $4,000 $ $5,000 1 1s] Penalty enhancements for amount of penalties within past seven years from Table 4 42. Less than $10,000 $1,000 43. Between $10,000 and $25,000 $2,500 http://info.sos.state.tx.us/fids/16 0008 0245-5.htm1 $ r--^ 1/13/2006 natsiuau W.u1111111551011 UI .as Page 4 of 4 46 L44. Between $25,000 and $50,000 $5,000 $ 45.Between $50,000 and $100,000 = $10,000 $ 10% of total amount $ 46. Over $100,000 47. Subtotal: line 34 plus amounts on lines 35 and/or 36 plus the $ arnount shown on any one line from 37 through 36, inclusive 48. Reduction for demonstrated good faith of person charged F TOTAL PENALTY AMOUNT: amount on line 47 less any amount $ $ _ shown on line 48 http://info.sos.state.tx.us/fids/16 0008 0245-5.html 1/13/2006 • MICHAEL L. WILLIAMS, CHAIRMAN VICTOR G. CARRILLO, COMMISSIONER ELIZABETH A. JONES, COMMISSIONER MARY L. MCDANIEL, P. E. DIRECTOR SAFETY DIVISION RAILROAD CoMMIssIoN OF TEXAS SAFETY DIVISION September 26, 2008 Ms. Patti Richards V. P. Technical Services ATMOS ENERGY CORP., MID-TEX DIVISION P. 0. Box 223705 Dallas, TX 75222-3705 Re: Pipeline Safety Evaluation No(s): 2008-0829D ATMOS ENERGY/MCKINNEY (All correspondence must include the Evaluation No.) Dear Ms. Patti Richards: We have received your letter of September 04, 2008 which outlines the actions planned to correct the alleged violation(s) found during the above-referenced evaluation(s). After reviewing your correction plan, our staff has determined that revisions are necessary. The attached page(s) itemize the violations from our letter dated August 05, 2008 and, where specified, revisions are required. The information requested must be sent to this office by October 10, 2008. If you have questions please contact the appropriate regional office identified in the enclosed memo. Ma L. McDariiel, P. E. Di ector 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 * PHONE (512) 463-7058 FAX (512) 463-7319 TDD (800) 735-2989 OR TDY (512) 463-7284 AN EQUAL OPPORTUNITY EMPLOYER Required Revisions to the Plan of Correction (POC) Evaluation No: 2008-0829 D (All correspondence must include the Evaluation No.) MCKINNEY & HP'S item No 1 Plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified, or followed as necessary. Requirement: POC Revision: 49 CFR 192.13(c) The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. Item No 2 Records necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: POC Revision: 49 CFR 192.603(b) The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. Item No 3 Communication was not established or maintained with appropriate fire, police, or other public officials to identify the types of gas pipeline emergencies of which officials will be notified. Requirement: POC Revision: 49 CFR 192.615(c)(3) The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. August 05, 2008 Page 1 of 2 MCKINNEY & HP'S Item No 4 The operator did not ensure that pipeline personnel were qualified to perform covered tasks as required in the written qua lification program. Requirement: 49 CFR 192.805 (b) POC Revision: The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. I tem Mo 5 The operator did not conduct the prescribed post-accident testing for the presence of a prohibited drug. Requirement: 49 CFR 199.105 (b), POC Revision: The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. I tem No 6 The operator did not conduct the prescribed post-accident testing for the presence of alcohol. Requirement: 49 CFR 199.225(a) POC Revision: The extension has been denied. December 5, 2008 is too long of a time frame for a response. The violations cited would not require access to premises and the operator should already have the date needed for a response. End of violations August 05, 2008 Page 2 of 2 • r ax t rom PJ: 09-24-08 09:25a Trnnsrnlttal Cover Sheet for ROvicw of Operator Correapopdence A^'^E1'^''TxDN: A i.f - ^Re^iion^l Re RETUxN By.. A3AP P,O&nsl Offiice: ^O' f.}-\.^ Date Mailed: q, Z 1Evaluatioa NOW ^^ --MZ 9 And/Mougb - Operai»jr Comspondwce Dated: G ^^`^^ Repe^t f^#^f^tiQne: El Yes )(j%p AeftGbed 4arv8pondence and recommended ectlou: . Pt'aiC Iltudiag C1 Approved EstimWd. Corapleticn Aate: 0 Approwed and Complete Coaftmed Compktion Dste; (Ta confirn^ Wa^pxetlaa Mpcst 'oLMti,a^^s =W also be complet X Itevisiow ReqWred Now POC Due I?dte: 0 EAMfcn 10 ^t New F'M Due Date: New i,..C Due Dam • C! Compkdon Pending . ' 0 Cwftmed L'ompWoA ^Oll^t^k^ CompjCdolt L^ft: a Extcnsion New Cempletk= Due J,?aft: a roUnquaw New CMpWon Due Dad^ • 1 C] completlell 1*eJuN'pag (Rtleat Violatwns Oj*) E7 Con3imed Completion • Conruwed Com,plebon 17gft: . Q Deliaqtten# . Natri: Review the att1tched apwatQr varrespondence and indirada the recammeWed aatico aban+.. When cavisions am mquUrd to the Plan Of correclion, use backside of this ft.no to refme" the ers]tusttan aumber aad viot+dien irtaa riwnber to deseriba the dWoiaaaYl. AJso, ,enter the "timmed et,mpktion dg m uW the coafa+ted compkti= dae whe+e approprim for each victbd' ion on the PS43 ANW(s)TtNInitial e+r^trespodr41e14e package is being copied to your `WER" fol+dac on yomr netwaelce. Rabteo eh%aWaead tba F3-43 form(s) xo Cnrs,^e or Shatrt^el for t^rrtt^r pqrocs^ie^ , ^'1^ ^.:c^ns^o•t hc^..s b^c.^ ^ e.^, cd . ^G4C rw^ie! S,11006 t S +Db tDnJo^r ^r a- rGSQo,yst. 'C^^ viotk.^;a,s ^^^•eUt ox-.^ ^n^..l^ nU•^' ^'GC^^s;rc c^^^esc^ A-0 ?Kw:fscs oPe-r64k>r shvwAd. D&re.,A,•j 1uus,c- juako-- v^-^•c^ 4" u. +-tSQbnSe. .^ r ax s i'um 4p/ ^.zl ^IV • v.. • ^TMOS energy 89-24-88 89:26a Pg: 3 Patti Rlchard* Vice Presid®rlt TechnicaI Services September 4, 2008 Ms. Mary fVEaDanief, P.E_ Director, Safety Division Railroad Commission of TexasPost Office Box 12967 Austin, TX 78711 Re: Safety Evaluation No. 08-0829E•a McKinney Unit Dear Ms_ McDaniel: I Piease be advised that due to the complex nature of this incident and the coordination required gaining access to premises and data, Atmos Energy is still investigating the refet`enced safety evaluation. Due to the ongoing investigation surrounding this incident Atmos Energy respectFuliy requests an extension for this response until December 5, 2008. If further inforcnation is needed please do not hesitate to contact me. Pattl Richards Attachment I At(1799 ERGfgy COrporbtlofl 5420 LB.1 Fraeway, Suita 1800 pallss, 7x 76240 P 214-206-2807 F 214-206-2126 patti.fthardsoatrirosenergy.com WN iTMOS energy CRS Patti Richards Vice President Technical Services September 4, 2008 Ms. Mary McDaniel, P.E. Director, Safety Division Railroad Commission of Texas Post Office Box 12967 Austin, TX 78711 Re: Safety Evaluation No. 08-0829D McKinney Unit RECEIVED RRC OF TE): : from: ---------------NA mcf purchased: mcf sold: 343 integrity_code: 6776 lost unacct for gas_june ending from: 0000 mcf purchased: mcf sold: mcf lost: no purchase ------^225^ ^ - --- cao o -------J. person I contacted: 'M,. tcc- SX,-ks on Title 1: AA-^ns 0 % LU 0 • ---------- number fatalities: number injuries: callin-no: 0 00-CA-000 to: 0000 -9 , pf3-CA-y°15 person 2 contacted: Title 2: ynsl !• '• c^n^^ ^..h T'X - personnel contacted at: county locations COLLIN ------------------------------------------------------------- --------------------------------------- ^ violations cited new code old_code 192-479-006 192-463-001 192-703-002 192-721-001 00-479-006 00-463-001 00-703-002 00-721-001 est_completion conf completion repeat 3/25/2008 3/25/2008 3/25/2008 3/25/2008 * For use of codes, procedural guidance, and blank forms, go to the "Forms and Procedures" button on the "package_builder" form. 7/31 /2008 + loss - gain Page 1 of 1 Field Evaluation Pac?age Evaluation Dates Start: Evaluator(s): 5'1_^ 1f^ 1 ALr9^C-93 4,tkXc.1a (first and last name) Company Selected: Company Unit: Company System: refresh date: End : 4/28/2008 1 7 31 U 1^^ ^^0'P _r 6776 ATMOS ENERGY CORP., MID-TEX DIVISION 21935 UNIT OF COMPANY ID 6776 1756 SYSTEM OF COMPANY ID 6776 Were violations cited for the com an s stem? p yy Unit Selected: 7/31/2008 Yes No If yes, enter the Evaluation No 3397 ATMOS ENERGY/MCKINNEY System(s) Selected: 610969 ^ System Code MCKINNEY & HP'S D Evaluation No(s) g _0g^29 Page 1 of 1 Company - Unit Data Make changes/corrections in the boxes with dotted borders company companyjd: name: 6776 ATMOS ENERGY CORP., MID-TEX DIVISION 1 ----------------------•---------------•-------------------------------------------: ------------------------- ------------------------- --------------------- --------' representative: title: addressl: Ms. Patti Richards V. P. Technical Services ------------ ---------- P. O. Box 223705 phone: 24hr_phone: (800) 249 - 9406 fax: ---------- ------------------------------------------------------ ' -------------------------------------------------------- Dallas, TX 75222-3705 (214) 206 - 2809 ---- --------------------- address2: town, state, zip: -------------------------------------------------------' --------------------------------------------------------' ^--------------------------------------------------------^ ---------------------------------- ------------------- ----------------------------------------------- ----------------- ------------- -----------= ------------------------------------------------------------------------------------------------------------------------^ 2142062126 = ------------------------ ------ unit unit id: name: representative: title: addressl: 3397 ATMOS ENERGY/MCKINNEY 1 -------------------------------------------------------------------• Mr. Terry Triem ^-------------------------------------------------------------------; S&C Supervisor 2601 Logan Street ------------------- ✓ address2: town, state, zip: ------------------ Dallas, TX 75215-0000 ---------------------- phone: 4692617461 24hr phone: 8004603030 7/31/2008 ---------------------- '--------------------------------------------------------------------' ^-------------------------------------------------------------------. = ----------------------- ------------------------- ------------ Page 1 of 1 Alleged Violation Cck, System: 610969 Evaluation No: MCKINNEY & HP'S ^ g - ^ V2--q Violation Code Were violations cited for this system? Note Corrected Repeat X yes ❑ no Previous Evaluation No (if yes enter prev eval no. for the violation) Item No I ^(otr, - O1$" oOb D yes ❑ no D yes ® no F^ yes M no Item No 2 \vE _ OIS_ p3i ❑ yes ❑ no ❑ yes ® no F-] yes >q no Item,No-!^ \ca.. 0^'l - Oo3 ❑ yes ❑ no ❑ yes [X no ❑ yes Ig no ❑ yes ❑ no ❑ yes JR no E] yes IN no F-1 yes ❑ no ❑ yes S no F^ yes N no Item N Item No 01- SoS-ot t7. ❑ yes ❑ no ❑ yes "K no [-I yes N no Item No qi\- {pS - $pa ❑ yes ❑ no ❑ yes X no Ej yes^R no ❑ yes ❑ no ❑ yes ® no Item No ^ \0,01- a 6 _ Oi a $ V -^ 0 - Ai^- 1 4- z W^( 'NA . ? rev . V 14, Item No 9 ❑ yes 0 no ❑ yes [] no ( N 6+ 5 `^ RLeQ0ko ^-ew (nLM Item No 10 7/31/2008 ❑ yes ❑ no ❑ yes r-j no ['^ yes F-] no - Page 1 of I • ^-. The Railroad Commission of Texas Safety Division Report No 08-0829 RAILROAD COMMISSION OF TEXAS Safety Division ACCIDENT INVESTIGATION REPORT 08-0829 Operator: Atmos Energy Corp., Mid-Tex Division Location: Intersection of Throckmorton St. and Fenet St. McKinney, TX. Date of Accident: May 16, 2008 Call-in Number: 08-CA-495 Investigated By: Alfred R. Garcia Jr. Reviewed By: Mary McDaniel, P.E. i ^A^^ F^,J-„Zk" The Railroad Commission of Texas Safety Division Report No 08-0829 TABLE OF CONTENTS Report No. 08-0829 1. SYNOPSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . ...1 II. EVALUATION OF OPERATOR'S RESPONSE ....................................2 AND PROGRAM EFFECTIVENESS III. FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 -4 IV. ALLEGED VIOLATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..6 A. PIPELINE FAILURE INVESTIGATION REPORT B. PHOTOGRAPHS C. THIRD PARTY DAMAGE INFORMATION REPORTS D. ODOR CONCENTRATION TEST E. ONE-CALL TICKET F. SKETCH ii 6 The Railroad Commission of Texas Safety Division ♦ Report No 08-0829 I: SYNOPSIS On Friday May 160`, 2008, at approximately 5:35 pm, an explosion and fire occurred at 613 Fenet St., McKinney, Texas. Immediately following was a second explosion and fire at 615 Fenet St. and a third explosion at 601 Throckmorton St. minutes later at 5:46 pin. Excavation revealed a Grade 1 leak on a 3" polyethylene natural gas distribution main. M.J. Sheridan of Texas, Inc., a contractor hired by Atmos Energy Corporation to replace the existing 3" polyethylene natural gas main with a 4" polyethylene natural gas main, hit the existing 3" gas line with a directional boring rig. Gas migrated into the sewer system and into the homes resulting in the explosions. The ignition source is unknown. There were initially three injuries as a result of the incident, however over the course of the investigation one person died as a result of the injuries. The natural gas distribution system is owned and operated by Atmos Energy Corporation (Atmos). PART I: SYNOPSIS 1 W-) The Railroad Commission of Texas Safety Division Report No 08-0829 PART II: EVALUATION OF OPERATOR'S RESPONSE AND PROGRAM EFFECTIVENESS The incident occurred on Friday, May 16, 2008, at approximately 5:35 pm. The 3" polyethylene natural gas main was hit by M.J. Sheridan of Texas at approximately 4:30 pm. M.J. Sheridan notified Atmos dispatch of the hit at 4:38 pm. Service Technician Johnny Jackson was notified 4:48 pm and arrived on-site at 5:06 pm to respond to the Grade 1 leak reported. Upon arrival, Mr. Jackson expanded the coned off the area established by M.J. Sheridan and began a partial leak investigation to determine gas migration patterns. He detected gas concentrations in the storm drain closest to the hit line on Fenet St. and removed the manhole cover to let the storm drain vent. He checked utility manholes across the street and checked inside the Holy Family School for presence of gas. He did not find any other gas concentrations except in the storm drain closest to hit line on the north side of Fenet St., west of Throckmorton St. Mr. Jackson did not check the sewer system in his investigation. There is a large manhole to the sewer system in the middle of Fenet St., west of Throckmorton. There are also several new cleanouts along the property line of the homes. The sewer system is a critical area when a known leak exists. In damages caused by directional boring operations, gas migration patterns may not be the same as a hit line where an open excavation area exists. The gas does not have an open path to vent to the atmosphere and dissipate. Gas migration therefore is unknown. Also fluid is used in the directional boring process and this may also have a capping effect on the gas. Therefore the sewer is a critical system to check during any gas leak investigation. Atmos Emergency Procedures calls for personnel to give immediate attention to potential hazards to people or property. No horimeswere evacuated in the emergency response until after the explosions. However, in the twenty-nine minutes that Mr. Jackson was on-site, he moved his vehicle three times. An Atmos construction crew was dispatched at 5:00 pm. The crew was dispatched from the Atmos Plano Service Center. The crew did not arrive unti16:05 pm: One must note the time of day and the traffic conditions to travel North from Plano to McKinney. The availability of a crew from the Atmos McKinney Service Center may have been a more prompt emergency response, or even the M.J. Sheridan crew that was on-site. M.J. Sheridan is a contractor for Atmos and should be able to recognize and react to Abnormal Operating Conditions. The contract crew notified their company headquarters of the hit line but did not cal1911 to notify emergency officials. Had emergency officials been dispatched sooner they may have made the determination if homes needed to be evacuated. Once again, damage caused by the directional boring process is different in that gas migration are unknown due to the gas not having a direct path large enough to vent to the atmosphere and dissipate. PART II: EVALUATION OF OPERATOR RESPONSE AND PROGRAM EFFECTIVENESS 2 ^ The Railroad Commission of Texas Safety Division Report No 08-0829 PART III: FINDINGS 1. On May 16, 2008, at approximately 4:30 pm, M.J. Sheridan of Texas, a contractor working for Atmos Energy hit an existing 3" polyethylene natural gas main while using a directional boring rig to install a new 4" polyethylene natural gas main. The hit line was at the intersection of Fenet St. and Throckmorton St. in McKinney, Texas. 2. Line locates were requested by M.J. Sheridan on One Call Ticket #081091063. However the ticket was not refreshed after 14 days. M.J. Sheridan was excavating within the identified tolerance zorie: ::' 3. At 4:38 pm, Atmos emergency call center received a call about the hit line from Kathy Gutierrez of M.J. Sheridan. Ms. Gutierrez had received information regarding the hit line from a member- of the crew immediately following the hit. 4. Service Technician Johnny Jackson was notified 4:48 pm and arrives on-site at 5:06 pm to respond to the Grade 1 leak reported. 5. At approximately 5:35 pm an explosion occurs at 613 Fenet St. and a second explosion at 615 Fenet St. followed at approximately 5:36 pm. A third explosion at 601 Throckmorton is reported at 5:46 pm while the Fire Department is on-site responding to the initial explosions. 6. The first notification to 911 was immediately following the first explosion at 5:38:20 pm by Nancy Gonzales. A second 911 notification is made at 5:38:41 pm by caller Rosa Bailey. Both were residents in the area of the explosions. 7. No notifications were made prior to the explosions to the Atmos emergency call center nor 911 regarding the gas leak by the general public. 8. Atmos construction crew arrived at 6:05 pm and the gas was shut off to the area at 7:25 pm. 9. Gas concentrations were detected in the sewer system. Actual readings were not recorded by Atmos technicians. A vapor extraction unit was used to remove the gas from the sewer system. 10. Excavation revealed the boring rig bit had punctured the middle of the 3" polyethylene natural gas main. PART III: FINDINGS 0 The Railroad Commission *as Safety Division Report No 08-0829 11. On May 16, 2008, at 8:40 pm the odorant level at 504 Howard St. was rated as strong at one percent gas in air. It was first detected at 0.2 percent gas in air. 12. The line was located properly but the depth of the 3" main was not verified. 13. The scope of work called for the new 4" polyethylene main to be installed at a depth of 42". The scope of work also stipulated that dirt within 12 inches of the existing pipeline will be hand dug. 14. M.J. Sheridan did not hand dig within the 12 inches as required. 15. The depth of the existing 3" main was 60" from the top of the pipe. 16. Atmos Energy submitted the required Third Party Damage Information Report to the Railroad Commission on 6/8/08. 17. M.J. Sheridan submitted the required Third Party Damage Information Report to the Railroad Commission on 5/30/08. This submission was an initial report with a supplemental report dated 8/1/08. 18. There was one fatality and two injuries as a result of the incident. 19. The ignition source is unknown. 20. The gas distribution system is owned and operated by Atmos Energy. PART III: FINDINGS 4 • The Railroad Commission of Texas Safety Division Report No 08-0829 IV: ALLEGED VIOLATIONS During the investigation, several alleged violations were noted. Two alleged violations were cited to M.J. Sheridan Inc. under 16 TAC, Chapter 18 in regards to damage prevention. Six alleged violations were cited to Atmos Energy Corporation under CFR 192 and CFR 199 in regards to procedures, records, operator qualification, and drug & alcohol testing. 1. 16E - 018 - 008 (M.J. Sheridan of Texas, Inc.) 2. 16E - 018 - 031 - (M.J. Sheridan of Texas, Inc.) 3. 192 - 013 - 003 (Atmos Energy Corporation) 4. 192 - 603 - 003 (Atmos Energy Corporation) 5. 192 - 615 - 008 (Atmos Energy Corporation) 6. 192 - 805 - 010 (Atmos Energy Corporation) 7. 199 - 105 - 802 (Atmos Energy Corporation) 8. 199 - 225 - 801 (Atmos Energy Corporation) PART IV: ALLEGED VIOLATIONS 5 The Railroad Commission of exas 'Safety Division IV: ALLEGED VIOLATIONS 1. 16E - 018 - 008 2. 16E-018-031 3. 192-013-003 4. 192-603-003 5. 192-615-008 6.' 192-805-010 7. 199 -105 - 802 8. 199 - 225 - 801 PART IV: ALLEGED VIOLATIONS 0 Report No 08-0829 APPENDIX A *eline Failure Investigation tport Pipeline System: Location: McKinney & HP'S Operator: McKinney, Texas Medium Released: Date of Occurrence: Natural Gas 05/16/2008 Quantity: unknown PHMSA Arrival Time & Date: 7:49 pm 5/16/08 Investigation Responsibility: Atmos Energy Corp., Mid-Tex Division Total Damages $ ❑ PHMSA ® State estimated at $225,000 ❑ NTSB Other Company ReportedApparent Cause: ❑ Corrosion ❑ Natural Forces ❑ Incorrect Operation ❑ Other Outside Force Damage ❑ Material and/or Welds ❑ Equipment and Operations ❑ Other Rupture. Leak Fire Explosion Evacuation ❑ Yes ® Yes ® Yes ® Yes ❑ No ❑ No ❑ No ❑ No ® Yes ❑ No Excavation Number of Persons 30 Area 15 homes i^iafii^^ Sumr^^ 11, Short summary of the Incident/Accident which will give interested persons sufficient information to make them aware of the basic scenario and facts. On Friday May 16, 2008, M.J. Sheridan of Texas Inc., a contractor working for Atmos Energy, hit a 3" polyethylene natural gas main while using a boring rig to install a new 4" polyethylene natural gas main. This work was part of a Capital Improvement project by the City of McKinney. The gas migrated into the sewer system and found an ignition source causing three homes to explode and catch fire at 613 Fenet St., 615 Fenet St. and 601 Throckmorton St. There were three injuries at the time of the incident. All were care-flighted to Parkland Memorial Hospital with severe burns. One homeowner died as a result of the injuries. Region/State Region 6/Texas Principal Investigator: Date: Reviewed by: Title: Alfred R. Garcia Jr. Ausust 1. 2008 Date: 1 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) b l" C.k nt!' g-S ftod3 ^p eline Failure /nvestigatiorrep ort ^i ^^ ti 4r>, . ^^ ` &^^ i, ..°: °Fail^ure^ ^acatio^:'^ R`esponse Location (City, Township, Range, County/Parish): McKinney, Texas (Acquire Map) Address or M.P. on Pipeline: Type of Area (Rural, City): Intersection of Throckmorton and Fenet St. City Date: Time of Failure: 05/16/08 Time Detected: 4:30 pm Time Located: Approximately 4:30 pm 4:30 pm How Located: Odor in atmosphere, gas blowing from work area NRC Report #: (Attach Report) Time Reported to NRC: 08-CA-495 (RRC Call-In Number) Reported by: Russel Windsor with Atmos Energy 6:52 pm Type of Pipeline: Gas Distribution Gas Transmission Hazardous Liquid LNG ❑ LP ❑ Interstate Gas ❑ Interstate Liquid ❑ Municipal ❑ Intrastate Gas ❑ Intrastate Liquid ❑ Jurisdictional Gas Gathering ❑ Offshore Liquid ❑ Offshore Gas ❑ Jurisdictional Liquid Gathering ❑ Offshore Gas - High HzS ❑ CO, Public Utility ❑ Master Meter ❑ LNG Facility Pipeline Configuration (Regulator Station, Pump Station, Pipeline, etc): 3" Polyethylene Natural Gas Distribution Main 4^ :^^^ ^:_ „ Op^r''ator^0»^iier^nf`ormatio^, Owner: Atmos Energy Corp., Mid-Tex Division Operator: Atmos Energy Corp., Mid-Tex Division Address: P.O. Box 223705 Dallas, TX. 75222-3705 Address: P.O. Box 223705 Dallas, TX. 75222-3705 Company Official: Patti Richards Company Official: Patti Richards Phone No.: 214-206-2809 Phone No. 214-206-2809 Fax No.: 214-206-2126 Fax No. 214-206-2126 ❑ N/A Drug and Alcohol Testing Program Contacts Drug Program Contact & Phone: Pipeline Testing Consortium 1-800-294-8758 (Third Party Excavator's Administrator) Alcohol Program Contact & Phone: Pipeline Testing Consortium 1-800-294-8758 (Third Party Excavator's Administrator) 11i11lT^"83`NF;'; Product/Gas Loss or Spill 2 ) Amount Recovered Unknown Estimated Property Damage $ $210,000.00 NA Associated Damages(3) $ $13,500.00 1 Photo documentation 2 Initial volume lost or spilled 3 Including cleanup cost 2 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) rP eline Failure Investi9^ationReP ort 'ami $1,500.00 Estimated Amount $ Description of Property Damage: Explosion and fire at 613 Fenet St. Explosion and fire at 615 Fenet St. Explosion and fire at 610 Throckmorton St. All three homes were a total loss. Yes ❑ No Number: 71 ❑ Yes No Number: _ Customers out of Service: Suppliers out of Service: ^ l, ,MV ^:: ^ .^y{y Z .. ✓ ^. ), J.^' Y ,.p .a9 i..^y .« .... A..:',rr'Y'^iN , i% _ ' . Fatalities: ® Yes ❑ No Company: Contractor: Public: 1 Injuries - Hospitalization: ® Yes ❑ No Company: Contractor: Public: 2 Injuries - Non-Hospitalization: ❑ Yes ❑ No Company: Contractor: Public: Total Injuries (including Non-Hospitalization): Company: Contractor: Public: Name NA-public (Homeowner 615 Fenet St.) Nancy Foster NA Raul Moreno Fenet St.) 5 • ..^.. ^ ^ Yr ^ ..s. ^..^,^^a^^;.>> ^^^^ ♦ }^^w ^ {^^ ^^^, ^.p' t'Z'K t.^{J' .t^sYY' . ^.y^ , : aw .,^. -' ; ^,' Yrs. Exp. Type of Injury Second and Third Degree Burns later resulting in her passing on NA 7/27/08. NA-public (in household at 615 Fenet St.) NA-public (Resident 613 Arthur Bryson F Yrs w/ Comp. Job Function 3 NA NA Second and Third Degree Burns NA NA Second and Third Degree Burns .;^ ;,(:. .. s' ^`rrig/Atcq^vl ^'esting,. ,; ^^ „ _ _ . [] N!A Were all employees that could have contributed to the incident, post-accident tested within the 2 hour time frame for alcohol or the 32 hour time frame for all other drugs? ❑ Yes ® No J ob F unction T est D at e & Time L ocati on 3 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) Results Pos Neg ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ Type o f D rug N eline Failure lnvesti9^ation*p ort ;y,sterit l^escriptiorr ` . Describe the Operator's System: The distribution system is designated as system id 610969 McKinney & HP'S. The system contains 343 miles of pipe and has four MAOP's. The area of town where the incident occurred has an MAOP of 40 psig. The piping where the incident occurred consisted of 2" and 3" Polyethylene pipe. ; ,.,,,..,, Pfpe l^`ailt^re Lte:s'eriptiori: , Length of Failure (inches, feet, miles): ❑ NIA 2.8 inch puncture Position (Top, Bottom, include position on pipe, 6 O'clock): (1) Description of Failure (Corrosion Gouge, Seam Split): Middle of pipe at 9 O'clock position The bit of a boring machine punctured a 3" polyethylene natural gas main. ❑ Yes Laboratory Analysis: No Performed by: Preservation of Failed Section or Component: If Yes - Method: In Custody of: ❑ No ®Yes Bagging McKinney Police Department Develop a sketch of the area including distances from roads, houses, stress inducing factors, pipe configurations, etc. Bar Hole Test Survey Plot should be outlined with concentrations at test points. Direction of Flow. , FaiXr^re Descriptio^t Componenf ® N/A Component Failed: Manufacturer: Model: Pressure Rating: Size: Other (Breakout Tank, Underground Storage): ^^`- 'Fx• ,^-4 kY 7^. F Y. / ,( .^r ^, 07 Material: Polyethylene Pipe - PE2306 Wall Thickness/SDR: SDR - 11.5 Diameter (O.D.): 3 inch Installation Date: 08/04/77 SMYS: NA Manufacturer: Unknown Longitudinal Seam: NA Type of Coating: NA - Plastic Pipe Specifications (API 5L, ASTM A53, etc.): v:,^ 4T'+1^ :Y ;:^ ->- 'Y ASTM D2513 PE2306 f..:, ,.'' Ref. ER# 7571-77 °' ; - Type: Butt fused Procedure: Fusion NDT Method: Visual Inspection Inspected: 4 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ❑ N/C1 . t. ® Yes . • , ❑ No , , Rex Gracy ❑ N/A N eline Failure lnvestigation 7^eport { ..^ ❑ ^"^iite.o^Fqt^ure^F'ailureSite - N/A Elevation @ Failure Site: unknown Pressure @ Failure Site: 20 psig Direction from Failure Site Pressure Readings @ Various Locations: LocationlM.P./Station # Pressure (psig) Elevation (ft msl) Upstream McKinney- Hunt St. & Finch DRS27 20psig NA X Downstream LTp N/A Type of Product: API Gravity: Specific Gravity: Flow Rate: Pressure @ Time of Failure (4) Distance to Failure Site: High Pressure Set Point: Low Pressure Set Point: S^uti^is"Data^^Y Specific Gravity: Flow Rate: Pressure @ Time of Failure (4) Distance to Failure Site: High Pressure Set Point: Low Pressure Set Point: ^ ' ^ ^ ^ ^^^ ` F^,^ ^"[]^terau'i3#^^^ ^^sut^^ •" ^.i,'°°r ^ `` ^ N/A ^r Determination of MAOP: Established by pressure test Max. Allowable Operating Pressure: 40 psig Actual Operating Pressure: 20 psig Method of Over Pressure Protection: Relief Valves and Regulator-Monitor Stations in system Relief Valve Set Point: 42 psig monitored at 40 psig ., , , ^^^^ Capacity Adequate? _>.. .,,^.•:._ y Itta t e =^ailrtre: ' . ® Yes ❑ No . {^} *r,41 rF,rr p e ^ -,T•^. ^ J:.3. j^-^,-x p ® Pressure Test Conducted in place? (Conducted on Failed Components or Associated Piping): ❑ Yes If NO, Tested after removal? ❑ Yes N/A ' ❑ No ❑ No Method: Describe any failures during the test. ❑ N/A Condition of and Type of Soil around Failure Site (Color, Wet, Dry, Frost Depth): . soil was dry in the area but wet around the hit line due to operation of drilling rig. Soil seemed to be a sand and clay mixture. 4 Obtain event logs and pressure recording charts 5 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ^\eline Failure lnvesti9ation eIn ort N . ❑ N/A ater ^anditions: ^ F'&Aure Site Type of Backfill (Size and Description): Soil Type of Water (Salt, Brackish): Unknown Water Analysis ❑ Yes ® No maernalPi' P eor ComRo^rent^acatnination External Corrosion? ❑ Yes N/A Coating Condition (Disbonded, Non-existent): ❑ No Description of Corrosion: Description of Failure Surface (Gouges, Arc Burns, Wrinkle Bends, Cracks, Stress Cracks, Chevrons, Fracture Mode, Point of Origin): Above Ground: ❑ Yes ❑ No Buried: Stress Inducing Factors: ❑ No ❑ Yes Depth of Cover: N/A P/S (Surface): P/S (Interface): Soil Resistivity: pH: Date of Installation: Method of Protection: Did the Operator have knowledge of Corrosion before the Incident? ❑ Yes ❑ No How Discovered? (Close Interval Survey, Instrumented Pig, Annual Survey, Rectifier Readings, ECDA, etc): ' Internal Corrosion: ❑ Yes Zriternal X+lp^^-_ vr f~'onip,aiertl:Ezarmination ❑ No Injected Inhibitors: ❑ Yes Type of Inhibitors: Testing: ❑ Yes ^ N/A ❑ No ❑ No Results (Coupon Test, Corrosion Resistance Probe): Description of Failure Surface (MIC, Pitting, Wall Thinning, Chevrons, Fracture Mode, Point of Origin): 5 Attach copy of water analysis report 6 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) N eline Failure Investi9^ationtp ort N!A Cleaning Pig Program: ❑ Yes ❑ No Gas and/or Liquid Analysis: ❑ Yes ❑ No Results of Gas and/or Liquid Analysis Internal Inspection Survey: ❑ Yes Results ❑ No Did the Operator have knowledge of Corrosion before the Incident? How Discovered? (Instrumented•Pig, Coupon Testing, ICDA, etc.): ; y ^ ,A- ^^ ❑ Yes ❑ No ❑ N/A ; Ouiside Fo^ee D'aniage Responsible Party: M.J. Sheridan of Texas Inc. Telephone No.: 214-389-5810 Address: 11427 Seagoville Rd., Balch Springs, TX. 75180 Work Being Performed: Installing a new 4" gas main for Atmos Energy due to a Capital Improvement Project by the City of McKinney. The number Atmos assigned to the project is 080.25570 Equipment Involved: Called One Call System? ® Yes ❑ No Directional Boring Rig One Call Name: Texas Excavation Safety System, Inc. One Call Report #(8) 081091063 Notice Date: 04/18/08 Time: 08:23am Response Date: 04/21/08 Time: unknown Details of Response: Atmos' contract line locater marked the facilities correctly with paint as the response. The line locate request was not refreshed and the markings of the original locate were still visible at the time of the incident. Was Location Marked According to Procedures? ❑ No Yes Pipeline Marking Type: Location: Paint Sidewalk and street over the main State Law Damage Prevention Program Followed? ❑ Yes Notice Required: ® Yes ® No ❑ No ❑ No State Law Response Required: ® Yes Was Operator Member of State One Call? ® Yes Was Operator on Site? ❑ Yes ❑ No Did a deficiency in the Public Awareness Program contribute to the accident? ® Yes ❑ No Is OSHA Notification Required? ❑ Yes ® No 6 Attach copy of gas and/or liquid analysis report 7 Attach copy of internal inspection survey report 8 Attach copy of one-call report 7 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ❑ No ® No ^p eline Failure Investigatione port ®NIA Natural Forc`es;;' ; Description (Earthquake, Tornado, Flooding, Erosion): 77777777-, ❑ N/A Y,iTii^^ ^sdla^ion Squeeze Off/Stopple Location and Method: The operator had two squeeze points due to a two-way feed. The first squeeze point was North of the damaged area in the 600 block of Throckmorton. The second squeeze point was the 3" poly main at the Southeast corner of Fenet & Howard St. Valve Closed - Upstream: Not performed I.D.: NA Time: NA M.P.: NA Valve Closed - Downstream: Not performed I.D.: NA Time: NA M.P.: NA Pipeline Shutdown Method: Manual ❑ Automatic ❑ SCADA ❑ Controller ❑ ESD Failed Section Bypassed or Isolated: Isolated Performed By: Utilizing squeeze tool on poly pipe Valve Spacing: NA R^ Gas Odorized: ® YesY ❑ N/A Concentration of Odorant (Post Incident at Failure Site): ❑ No Method of Determination: ® Yes ❑ No % LEL: ® Yes ❑ No % Gas In Air: ® Yes See attached odorant concentration test Time Taken: ® Yes Was Odorizer Working Prior to the Incident? Type of Odorizer (Wick, By-Pass): ® Yes ❑ No YZ injection ❑ No Type of Odorant: Scentinel 0-10 Odorant Manufacturer: NJEX Model: 7202 Monitoring Interval (Weekly): monthly Amount Injected: 1.3020 per MMCF Odorization History (Leaks Complaints, Low Odorant Levels, Monitoring Locations, Distances from Failure Site): 8 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ❑ No ON eline Failure Investi 9^ation ^ A ort There are two odor concentration test points that cover the incident area. One odor test point OC-16498 is located at 2050 Couch Dr., approximately 3.0 miles from the incident area. The last odor test for this location was conducted on 6/5/07 by Atmos technician Durwood Scalf. The odor concentration was tested as readily detectable at 0.38% gas-in-air. The second odor test point is located at 1801 Hill St., approximately 1.7 miles from the incident area. The last odor test for this location was conducted on 6/5/07 by Atmos technician Durwood Scalf. The odor concentration was tested as readily detectable at 0.38% gas-in-air. Leak complaints were reviewed for the area and Atmos records only indicate one Leak Investigation Order for the day of the incident reported by Kathy Gutierrez with MJ Sheridan of Texas, Inc. An odor concentration test was conducted by Railroad Commission of Texas investigator Alfred Garcia Jr. and Atmos Technician Larry Bridges at 8:40 pm on 5/16/08 and rated as strong at 1.0% gas in air. Q N/A Temperature: 74 degrees F Wind (Direction & Speed): Unknown Climate (Snow, Rain): Clear Humidity: Unknown Was Incident preceded by a rapid weather change? ❑ Yes ® No Weather Conditions Prior to Incident (Cloud Cover, Ceiling Heights, Snow, Rain, Fog): Clear and calm ,.rgratior^^u^vey ; Bar Hole Test of Area: ® Yes ❑ No I ❑ NIA Equipment Used: Trakit III Method of Survey (Foundations, Curbs, Manholes, Driveways, Mains, Services) (9) Bar Hole testing was performed around the structures involved in the incident and recorded on Atmos records. The only records maintained by Atmos are of the bar hole testing. Additionally, readings were taken in the sewer cleanouts and vents of approximately 15 homes. No record exists for these additional readings. Gas was detected in the sewer system and 15 homes were evacuated. A vapor extraction unit was used to remove the gas from the sewer system. The sewer was clear of gas concentrations at 11:22 pm on 5/16/08. The readings in the sewer system were not recorded by Atmos perssonnel. The service technician, that first arrived on scene for Atmos Energy, detected gas in the storm drain closest to the leak. ®NIA fmpact Location (Nearest Rivers, Body of Water, Marshlands, Wildlife Refuge, City Water Supplies that could be or were affected by the medium loss): OPA Contingency Plan Available? ❑ Yes Followed? ❑ Yes ❑ No Class Location/,F^igh :C"ons^quence Area Class Location: 1 ❑ 2❑ 3® 4 ❑ Determination: Residential area of distribution system Odorization Required? ® Yes ❑ No 9 Plot on site description page 9 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) (,) ❑ No ❑ N/.A. HCA Area? [] Yes ® No ® N/A Determination: Distribution main with 40psig MAOP ❑ N/A (1) Failure "lnvesti9 ^ation ^-eline p :^ _ ,..i, E ^ ^ 1 ^ x ; re ^" +o# , r r^ Y" ..,R..s,, .Z. ftr',s.y;.n":t;l:,"yA• '_^:. ^,, R ' Y;r^wr; ❑ NfA ^1 BSST[7'E ^CSt^1St07^r - Li# as l^ecessary^ .. A,. h." •, . ; i •^" ^ ep ort +.`. ;^ ' - Req'd (10)Assessment Deadline Date Test Date Test Medium Pressure (psig) Duration ^s ( ) /o SMYS % N/A 8/4/77 Air 90 nsis 30 minutes NA Installation Next Next Most Recent Describe any problems experienced during the pressure tests. N/A rnternpl Li^ie IitsiectQiifQtherAssessment History,: g.r (10) , '" " C.` Req d Assessment Deadline Date ^Qttl^r.l3t QS^BCBJSQI^^r Assessment Date Type of ILI Other Assessment Indicated Anomaly Method (12) If yes, describe below Tool Initial ❑ Yes ❑ No Next ❑ Yes ❑ No Next ❑ Yes ❑ No Most Recent ❑ Yes ❑ No Describe any previously indicated anomalies at the failed pipe, and any subsequent pipe inspections (anomaly digs) and remedial actions. ^ :,^,^^^ ^ ^„„^ ^_^^' ^. ^ ".^^: hr'e=.^"azl^ir^;iG^o"nditmns andActions^ ^ " ❑ N/A Was there a known pre-failure condition requiring (10) the operator to schedule evaluation and remediation? ❑ Yes (describe below or on attachment) ® No If there was such a known pre-failure condition, had the operator established and adhered to a required (10) evaluation and remediation schedule? Describe below or on attachment. ❑ Yes ❑ No ® N/A Prior to the failure, had the operator performed the required (10) actions to address the threats that are now known to be related to the cause of this failure? ❑ Yes ❑ No ® N/A List below or on an attachment such operator-identified threats, and operator actions taken prior to the accident. Describe any previously indicated anomalies at the failed pipe, and any subsequent pipe inspections (anomaly digs) and remedial actions. NA 10 As required of Pipeline Integrity Management regulations in 49CFR Parts 192 and 195 11 MFL, geometry, crack, etc. 12 ECDA, ICDA, SCCDA, "other technology," etc. 10 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) IReline Failure Inve p sfiga" t^on tport Are Maps and Records Current? (13) ® Yes ❑ No Comments: Ref. Mapsheet AG271560 ❑ N/A ; :Lealc,,^`urvHistory Leak Survey History (Trend Analysis, Leak Plots): Mapsheet AG271560 contains 3950 ft. of bare steel main with 63 service lines, 9313 ft. of coated steel with 165 service lines, and 7752 ft. of poly main with 96 service lines. The last leak survey cycle of the bare steel was on 8/30/06 and 12/8/04. The last leak survey cycle of the coated steel was on 8/26/05 and 6/9/03. The last leak survey on the poly was 8/26/05 and 6/9/03. The next leak survey will be due in August 2008. .. N^;>,^.. » .,. 1'ij '^''J^€'4^^'N i ❑ N/^i , Oiper^itiostory rt Hr Description (Repair or Leak Reports, Exposed Pipe Reports): There was no repaired leaks or unrepaired leaks on record for this area prior to the day of the incident. The only records for this area is the leak survey history. Did a Safety Related Condition Exist Prior to Failure? ❑ Yes No ❑ Yes Reported? ❑ No Unaccounted For Gas: McKinney is part of the metro system lost and unaccounted for gas report. The 12 month reporting period for June ending 2007 shows a 3.34% LUG. Over & Short/Line Balance (24 hr., Weekly, Monthly/Trend): NA r..`^r.:-:.:.^.^ ^^ ' ^^' ^F'.; ^ ^^. -^ "^^;^° r ^ • ^. .. .'. ::.,y.^.x. .": : : - . . ❑ N/A : . ^^:^Y^ (7'perator%G`ontra tor Error^ ^ Name: Juan Estrada (M.J. Sheridan of Texas, Inc.) Job Function: Directional Rig Operator Title: Operator Years of Experience: unknown Training (Type of Training, Background): unknown Was the person "Operator Qualified" as applicable to a precursor abnormal operating condition? 1-1 Yes ® No ❑ N/A Not under the current plan Was qualified individual suspended from performing covered task ❑ Yes ❑ No ® N/A Type of Error (Inadvertent Operation of a Valve): Did not verify depth while crossing existing utility while operating directional boring rig leading to damaged line as required in scope of work and procedures. Procedures that are required: Atmos procedures state that utility lines should be exposed at cross points before directional boring process begins. One-Call procedures require hand digging within tolerance zone. Actions that were taken: Contract crew notified their local M.J. Sheridan office then a call was placed to Atmos emergency line by Kathy Gutierrez of M.J. Sheridan. Pre-Job Meeting (Construction, Maintenance, Blow Down, Purging, Isolation): Yes on 5/2/08 Prevention of Accidental Ignition (Tag & Lock Out, Hot Weld Permit): NA Procedures conducted for Accidental Ignition: NA 13 Obtain copies of maps and records 11 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ^ eline Failure Investi9^ationep ort p ❑ N/A pePatW^artt^^CarError'„ Was a Company Inspector on the Job? ❑ Yes No Was an Inspection conducted on this portion of the job? ❑ Yes ® No Additional Actions (Contributing factors may include number of hours at work prior to failure or time of day work being conducted): NA Training Procedures: unknown Operation Procedures: unknown Controller Activities: NA Name Title Years Experience Hours on Duty Prior to Failure Shift NA NA NA NA NA Alarm Parameters: NA High/Low Pressure Shutdown: NA Flow Rate: NA Procedures for Clearing Alarms: NA Type of Alarm: NA Company Response Procedures for Abnormal Operations: NA Over/Short Line Balance Procedures: NA Frequency of Over/Short Line Balance: NA Additional Actions: NA Additio^u^.,4et46rt,c T'4ken-by the Operator ❑ N/A Make notes regarding the emergency and Failure Investigation Procedures (Pressure reduction, Reinforced Squeeze Off, Clean Up, Use of Evacuators, Line Purging, closing Additional Valves, Double Block and Bleed, Continue Operating downstream Pumps): 12 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ^p eline Failure Investig ation p ort AdditionatActions: Take# by the Operator, ❑ N/A Atmos service technician coned off the area upon arrival and then began to try and determine gas migration patterns. When the Atmos crew arrived they began excavating to apply squeeze tools to the main. A vapor extraction unit was brought on-site to remove any gas build-up in the sewer after the flow of gas was cut-off. Additionally, service technicians continuously monitored vent stacks and sewer cleanouts of the evacuated homes to determine if gas concentration readings sustained to a reading of zero. A CNG unit was brought on-site to supply gas to the 71 other homes that were affected by the flow of gas being shut off to the neighborhood. Proper purging and reliting procedures were followed with qualified personnel to restore service once the CNG unit was in place. 13 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) eline Failure Investigation . .^, . _..,, port ,. •...-,p Overall Area from best possible view. Pictures from the four points of the compass. Failed Component, Operator Action, Damages in Area, Address Markings, etc. Photo No. 1 nPCCrintinn Roll No. Photo No. Please see attached photo pages 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 10 10 11 11 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19 19 20 20 21 21 22 22 23 23 24 24 25 25 26 26 27 27 28 28 29 29 30 30 Type of Camera: Digital Film ASA:NA Video Counter Log (Attach Copy): NA 14 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) De.cr.rintinn Roll No. aefine Failure lnvestigationep ort f . . . z. Additionat In,^'ormation Sources Agency Name Title Phone Number Detective 972-547-2738 Police: Jeffrey Taylor Fire Dept.: John Nickles Fire Marshall 972-547-2854 City Of McKinney-Meredith Ladd City Attorney 214-747-6100 State Fire Marshall: State Agency: NTSB: EPA: FBI: ATF: OSHA: Insurance Co.: FRA: MMS: Television: Newspaper: Other: 15 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) ^ ^ eline Failure lnvestigation p ep ort Petsons Anterviewed Title Name Johnny Jackson (Atmos Energy) Service Technician Harlyn Farrell (City of McKinney) Water Wastewater Superintendent 16 Form 11 Pipeline Failure Investigation Report (Revised 03/07/08) Phone Number 972-547-7360 (80/LO/£0 pasinab) podaa u0i;e6i;sanuj amlied auwladid I I wAo.1 16 •sanu;;uoa uol;e8l;saew 80/I£/LO y$noy3 80/LI/SO •auaas;aedap sao;uSl;saeul DRU •Pooyaoqq8lau ay;3o pua y;.iou aq; no saawo)sna 2utao1sa ' pue aug ay; 2u; ind ueRa4sn^aaa sow;^ •;S uo;aouqao.iyy uo;ulod azaanbs J eau paddsa au1Z •au;l ;ly 3o uo;;eeeaxa supaq .fauu;gaw 30 43 •IS PJgmoH ti0S 3g 3 sa; uolea;uaauoa .iopo w io3aad sa2pta11 ,faauZ uelalu aa sow y L ;d pue ao;s8l;sanul O^ •sul8aq uo1;e81;sanul •a;;s-uo •.tp ela.ief) pa.gld ao;a21;saeu ^ DIM •a;noa-ua •.ip elaasD paJ31d a01e21 ;saeul 31M •loo; azaanbs ;Iwsn (q jjo sl eaag o; su2 spodaa sow;d wdZZ: 11 wdil:0l wdOb:B wd6ti:L wdS£:L wdSZ:L •;uapiaul y;im ;slsse o; llea saelaaaa •.tp ulaagf) paJ31d ao;e2I;saeul OUH wdS I :L a;nw-ua Si syooag ueg ao;e2l;saeu; 3UH •sKoojg uug uosJad pea-uo 9 uoi8ag ^q[ 01 u014uwao3u; ay; spaum.io3 uosnlaa31alueQ uosaad Ilaa no apima;e;s ORR •aag no aaam sasnoq £ pun ;na sum aug u se papodaa sum;uaplaul aqy •;uap;aul ay;3o au11,faua2aawa se2 ,Clod ,b (OUR) sexaZ3o uoisslwwoO peo.alleg sagl;ou sow;d •sexay 'ouald woa3 palanea; 8uingy a;ls-uo san;aae ,tiaaa uol;an.c;suo3sow;d ayy •aBa Io.i;ed u; e.iawea pa;unow aa;lod kq pau;waa;ap uo;.lowNaoa y.L I09Iu uolsoldxa palyy wdtS:9 wdZS:9 wdS0:9 wd9ti:S len;ae ay; a.^u pa;sil saw;I ay} .^o1,Cuy .^aad3O .^ad;nq sawl;;uaaa33.P^ etoy s.Cew gol;aoda.i ;uaw;.^edaQ 3 ayI •sa^,; apaIou^ ya;udslp sow;v 01 uolsoldxa s;aodai pue s11ea ue;aiuqaay aainaaS sow;d •a; ^ s-uo sanlaae;uawpudaQ aald •a;noJ-ua pa;.toda.t st;uaw;.iedaQ a.ilj •a;;s-uo saelaJe;uaw;audaQ aallod •paggou;uaw;aedaQ a.n3 •pag;;ou;uaw;aedaQ aayod Salleg esog wo i3 ya;¢dslp ,faua8aawa Bq pae;aaa.i Ilua 116 PuoaaS •salezuog ,faueu wo.t3 ya;udslp ,fauAiawa ,fq paelaaaa pea 116 Isa13 wd£b-S wdli7:S wdOti:S wd8£: S wdIt,:B£:S wdOZ:B£:S •;S }auaj SI9 Iu uolsoldxa puoaaS (xozdd8)wd9£:S •;S;aua3 £I9 3 u uo;soldxa;sa13 (xoaddv)wdS£:S •a;^ s o; a;no.i-ua pa;aodaa eaaJa uo;;ana;suoO •suaal}ed uo 1; e Al I u^ se 2l ao3 saloyuew f;;ll;n ilunlaaya sul2 aq pue aull;ly ay; punoje vaje ay;33o sauoa'aull;;y ay; saglaae ue;a;uqaa; ayy •a;ls-uo saelJaB uu;aluyaay aalnaaS -u;ew;na e3opodaJ ay;3o asneaaq paqa;edslp Si maJa uol;an.i;suoj V •a;ls o; a;noa-ua uelaluqaay aaleaaS •;uawu8;sse aapap 31ea7 sa2palmou3jae ue;aluqaay aaln.cas •uosyaep ,fuuyor uelaluqaay aa;eJaS 01 pau81ssu Si aapap 318a-1 ayy •u;-pea ay; ao3 aap.io 31gal e sa;e.iaua;I wa;sBs sow;d •aull I!4 aq; $ulpoda.i uePl.wayS •p•H 3o zaa,ta;;nf) ,fy;eX woa; IIUa u sae1030.1 .10;u03 pea ,Cauallawa sow;d alay; pagl;ou n^ aaa ayy •uluw seg 1e inIuu aua ,f a^f od •s.ia^unbpeay ,fusdwoa 1 qI 1<£ ay; 31ana;s uePl.iayS •t•IAI •iolaualuo3 aw;; a;ew;xo.iddV Juang wd90:S wd00:S wdZS:ti wd I S:ti wd81q, wdbl,: b wd8£:ti wd0£:ti au.uZ (•sa^ Pue ;uaware da a^<3