GUD DOCKET #9981 1(rItEED ORDERS WITH RULE VIOL^1TIOtV T^-{^R "IE^<^^J l}(f3)(2} ^ CONFERENCE D,kTE:_ OPERATORNAi'vIE: ^ LC n6 A4rn0 OPERATOR NUN[BER:_ _ DOCKET NUMBER: (^cJ^ ' ^hGf' l^/^ `"^`(l^^'^"^ r/^r^jf/y•^ T'D (^,,'7^j ^ LC. ^ ^ Cj LEASE & WELL NO.: S ID (^nq,0)1 FIELD & COUNTY: DATE VIOLATIONS BEGAN: RULE (S) VIOLATED & VIOLATIONS: '^' q ^' Fi^.. (9 z . 13 ^ c^.^,^.^ `^r' `Eq C Fr H-2, ^Aui4 oco A-cd..M. ^^ 0 3(^ `fil1 Cr'^,^mf^, / ^Jt^ rY^ i ^.y._^Q^^ ^-^-^ 9 cri2-- A, Co I 3 b ' COMPLIANCE DATE:1)_) 5-- I^ ^ ` ^1^^ ,^ -^ ^a^ e ^ ^^'f itiiANNER OF COMPLIANCE: DOC UMENTATION OF COMPLIANC E: PENALTY PAID: S t-Z- ^JnvD REMARKS: STAFF ATTORNEY: t '" l(v\ LEGAL ASSISTANT:^51:_ BARRY T. SMITHERMAN, CHAIRMAN ^^_ DAVID PORTER, COMMISSIONER ^\r\` ^^` ^ LINDIL C. FOWLER, JR., GENERAL COUNSEL DAVID W. COONEY, JR., DIRECTOR CHRISTI CRADDICK, COMMISSIONER ENFORCEMENT SECTION RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL June 17, 2014 Jeffrey S. Knights Atmos Energy Corp., Mid-Tex Division P.O. Box 223705 Dallas, Texas 75222-3705 Re: GAS UTILITIES DOCKET NO. 09981 Dear Mr. Knights: Enclosed please find a copy of the Stipulation, Agreed Settlement and Consent Order, in the above mentioned docket, approved by the Commissioners on June 17, 2014 This matter is now closed. Sincerely, (V( awi^ ^ Becky Tate Legal Assistant Office of General Counsel - Enforcement (512) 463-4889 cc: Carrie Smith, GUD Enforcement File 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 * POST OFFICE Box 12967 * AUSTIN, TEXAS 78711-2967 . 71r AN EQuAi. OPPORTUNiTY EMPLOYER FAx: 512/463-6989 PHONE: 512/463-6762 http:/ /www.rrc.state.tX.us 4D RAILROAD COMMISSICIN'OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID 610980), DALLAS COUNTY, TEXAS CONSENT ORDER The Enforcement Section of the Commission, through its attorney, announces that the Enforcement Section and Atmos Energy Corp., Mid-Tex Division ("Respondent") have agreed to an informal disposition of the matters under this docket through this Consent Order ("Order"), subject to the approval of the Commission. The Commission has authority to informally dispose of this case through a consent order pursuant to TEX. GOV'T CODE ANN. § 2001.056(3). IN SETTLEMENT OF THIS DOCKET, the Enforcement Section of the Commission and Respondent do hereby agree and stipulate as follows: I. Respondent is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. Respondent is an "operator" as that term is defined in Title 16, Section 8.5(20) of the Texas Administrative Code. 3. Respondent is a"person" as that term is defined in Title 16, Section 8.5(21) of the Texas Administrative Code. Respondent is a "gas company" as that term is defined in Title 16, Section 8.5(11) of the Texas Administrative Code. The Enforcement Section and Respondent hereby agree that the alleged violations set forth in Gas Utilities Docket No. 09981 regarding Safety Evaluation No. 2010-0703, are hereby settled and compromised under the terms of this Order. 6. Respondent makes no admission of any alleged pipeline safety violation, but wishes to address the Commission's concerns under the terms of this Order. 7._ The Commission wishes to further the goal of safe operations of gas pipeline facilities within the State of Texas. 8. Respondent has elected not to avail itself of the opportunity for public hearing. 9. The Commission has jurisdiction to assess an administrative penalty against Respondent pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. Consent Order, GUD No. 09981, Page 2 10. The violations alleged in Gas Utilities Docket No. 09981 are in compliance with the requirements of 49 CFR 192.13(c), 49 CFR 192.603(b), and 49 CFR 192.613(b). 11. An administrative penalty in the amount of NINETY-FNE THOUSAND DOLLARS($95,000.00) shall be recovered by the Commission for the violations asserted against Respondent. 12. Respondent has placed into the possession of the Commission funds in the amount of NINETY-FIVE THOUSAND DOLLARS ( $95,000.00) as payment of administrative penalties assessed in Gas Utilities Docket No. 09981 pursuant to TEX. UTIL. CODE ANN. § § 121.206 and 121.207. 13. The person signing hereunder for Respondent has authority to represent Respondent in this matter. Jurisdiction of this docket having been established and an agreement of the parties having been reached, it is, therefore, ORDERED by the Railroad Commission of Texas that Atmos Energy Corp., Mid-Tex Division is assessed an administrative penalty in the amount of NINETY-FIVE THOUSAND DOLLARS ($95,000.00), and that Gas Utilities Docket No. 09981 is informally disposed of and closed by this Consent Order. RAILROAD COMNIISSION OF TEXAS (Order approved and signatures affixed by Master t'^ ne, 11. ^^! ^.) Agreed Order dated APPROVED AS TO FORM AND SUBSTANCE Atmos Energy Corp., Mid-Tex Division By: Jeffrey S. Knights Vice President, Technical Service RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL MASTER AGREED ORDER JUNE 17, 2014 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 01-0281880 Espada Operating LLC (Operator No. 254277) 01-0286235 Cuatro Petro Corp. (Operator No. 191906) 04-0286309 04-0286313 Sydri Operating, LLC (Operator No. 833597) Vidal Lopez, Sole Prop. of A. J. Services (Operator No. 000251) 7B-0261032 Revard Petroleum, LLC (Operator No. 703609) 7B-0281036 ORDER TERMS $2,250.00 Penalty paid Completion report filed $500.00 Penalty paid Site remediated $5,000.00 Penalty paid P-4 reissued $8,350.00 Penalty paid Site remediated $2,000.00 Penalty paid Wells plugged (Operator No. 631265) $4,948.00 Penalty paid In compliance 7B-0286572 Veritas Energy, LLC (Operator No. 884589) $1,250.00 Penalty paid Penalty only 7B-0287562 Hadaway Consult and Engineer, LLC (Operator No. 342392) 7B-0288549 Ross Boykin Oil Co. (Operator No. 085187) 7C-0282915 Pharaoh Oil & Gas, Inc. (Operator No. 661322) 08-0287138 Big Star Oil & Gas, LLC (Operator No. 070445) P. I. D. Drilling, Inc. $18,500.00 Penalty paid In compliance $754.00 Penalty paid Site remediated $3,3 71.00 Penalty paid Wells plugged & site remediated $13,750.00 Penalty paid Site remediated & frac tank removed Master Agreed Order for JunA, 2014 Conference 08-0287141 08-0287565 Swepi LP d/b/a Shell Western E&P (Operator No. 774719) BFP Black Canyon, LLC (Operator No. 068492) Page 2 $9,340.00 Penalty paid Operator backfilled & leveled pit $5,300.00 Penalty paid Pit backfilled & compacted 09-0262709 Ira Schoppa, Sole Proprietor, IJS Oil (Operator No. 422882) $7,000.00 Penalty paid Wells plugged 09-0283785 Henderson & Erickson, Inc. $4,000.00 Penalty paid Well plugged (Operator No. 3.76810) 09-0287455 Suncoast Technical Services (Operator No. 829259) $3,750.00 Penalty paid Penalty only 09-0288170 Nacogdoches Oil and Gas, Inc. (Operator No. 598796) $513.00 Penalty paid Site remediated LP-Gas 2468 Ferrellgas, L.P. (License No. 09280) $500.00 Penalty paid Ferrellgas, L.P. (License No. 09280) $375.00 Penalty paid LP-Gas 2474 LP-Gas 2508 GUD 09981 GUD 10316 Mick Wilborn (License No. None) Atmos Energy Corp., Mid-Tex Div. (Company ID 6776) Atmos Energy Corp., Mid-Tex Div. (Company ID 6776) 009282 009320 Frisco Construction Texas Sterling Construction 009374 BTU Utilities 009521 010884 012823 014369 014870 016485 019035 020670 JV Electric 021188 022110 Verizon, Plano Riverside Irrigation Riverside Irrigation City of Port Arthur In compliance In compliance $500.00 Penalty paid Ceased all LP gas activities $95,000.00 Penalty paid In compliance $5,000.00 Penalty paid In compliance $500.00 Penalty paid $825.00 Penalty paid $1,500.00 Penalty paid $500.00 Penalty paid $500.00 Penalty paid $1,000.00 Penalty paid $500.00 Penalty paid $500.00 Penalty paid Texas Sterling Construction $825.00 Penalty paid Texas Sterling Construction Menade Construction $750.00 Penalty paid $500.00 Penalty paid City of Port Arthur Water Department City of Alvin $550.00 Penalty paid $500.00 Penalty paid Master Agreed Order for June ^2014 Conference $500.00 Penalty paid $550.00 Penalty paid City of Port Arthur $550.00 Penalty paid City of Port Arthur Mitchell Chuoke Plumbing, Inc. $550.00 Penalty paid $1,000.00 Penalty paid $500.00 Penalty paid $1,000.00 Penalty paid Iron Access $1,000.00 Penalty paid Ed Phillips Plumbing C & B Electrical Contractors City of Lubbock $1,250.00 Penalty paid $500.00 Penalty paid $1,000.00 Penalty paid $3,250.00 Penalty paid $300.00 Penalty paid $300.00 Penalty paid $2,250.00 Penalty paid $1,000.00 Penalty paid $500.00 Penalty paid ARK Contracting Services $1,000.00 Penalty paid Centerpoint Energy Entex $1,250.00 Penalty paid Barson Utilities Bruce's General Construction Legacy Sitework LLC $2,250.00 Penalty paid $3,250.00 Penalty paid C & B Electric 025159 Barson Utilities 025887 Quickstrip 025929 Renaissance Contractors Partnership 025955 AJ's Landscaping 026057 026134 Jaime Vallejo ARK Contracting Services 026229 026855 026937 026985 027158 027560 Page 3 City of Port Arthur 022607 022880 023015 023392 023615 024331 024404 024444 024455 024870 027123 027148 0 Ramer Concrete ABCO Fire Protection T Construction LLC Circle H Contractors, LP $2,000.00 Penalty paid $1,000.00 Penalty paid $2,250.00 Penalty paid 028021 RFE Services LLC $2,000.00 Penalty paid $1,000.00 Penalty paid $2,250.00 Penalty paid $2,750.00 Penalty paid $2,750.00 Penalty paid $3,250.00 Penalty paid 028072 SAJ Excavation $2,750.00 Penalty paid 028108 Ark Contracting Services 028202 Booth & Associates 028218 Alamo Concrete $1,000.00 Penalty paid $1,500.00 Penalty paid $3,250.00 Penalty paid 028238 City of West Columbia $2,250.00 Penalty paid 028427 028571 028587 Allied Foundation Specialists, Inc. $2,500.00 Penalty paid $2,750.00 Penalty paid 028673 028760 N P Enterprise Centerpoint Energy Entex Bevilacqua Construction Eastex Foundation Services 028824 028899 Texas Gas Service Company Liberty Septic & Excavating 027637 027727 027799 027920 027943 Irrigation Plus Muniz Concrete & Contracting Inc. ARK Contracting Services Barry A. Martin Painting Contractors G&G Rankin Const. $1,250.00 Penalty paid $3,250.00 Penalty paid $1,500.00 Penalty paid $1,250.00 Penalty paid $2,750.00 Penalty paid Master Agreed Order for JuneO2014 Conference Page 4 028904 028951 029002 029012 029023 029039 029044 029099 029139 City of Rowlett Vallejo Construction Cobra Cable Phouang Vieng $500.00 Penalty paid $1,000.00 Penalty paid $1,000.00 Penalty paid $1,500.00 Penalty paid $2,250.00 Penalty paid $2,250.00 Penalty paid $2 , 000.00 Penalty paid $2,750.00 Penalty paid $3,250.00 Penalty paid 029154 Centerpoint Energy Entex $1,250.00 Penalty paid 029157 029170 Mastec North America $1,000.00 Penalty paid 029236 Ferguson Construction TNMP $2,000.00 Penalty paid $1,000.00 Penalty paid 029247 Barson Utilities $1,000.00 Penalty paid 029262 029267 029327 Mastec Na Inc. $500.00 Penalty paid City of Amarillo $500.00 Penalty paid Badeco, Inc. Bryant Lawn & Sprinkler CPS Energy City of Big Spring Tracker Services NTS $1,000.00 Penalty paid $1,250.00 Penalty paid 029420 Atmos Energy, West Texas Division Allied Foundation Specialists, Inc. 029424 Jose Garcia 029500 Centerpoint Energy Entex Trinity Plumbing 029328 029637 029638 029644 029645 029650 Guevara Construction Pace Plumbing Co. Digtec $2,500.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $500.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid Muniz Concrete $2,000.00 Penalty paid La Feria Contractors, Inc. 029689 Pruski's Hauling $1,250.00 Penalty paid $1,000.00 Penalty paid 029694 029721 Romans Fence Co., Inc. Brownsville Public Utilities Board 029765 Triple B Construction A Plus Plumbing Contractors 029531 029777 $2,750.00 Penalty paid $1,000.00 Penalty paid $2,250.00 Penalty paid $2,500.00 Penalty paid Grand Prairie Water Utilities Infrasource Bob Mitchell, Inc. $1,000.00 Penalty paid 029838 029846 DCP Midstream, LP $1,250.00 Penalty paid Quality Excavation Ltd. $1,250.00 Penalty paid 029851 R.M. Walsdorf, Inc. 029859 029864 City of Hamlin ARO, Inc. $2,250.00 Penalty paid $500.00 Penalty paid 029871 Centerpoint Energy Entex Centerpoint Energy Entex 029795 029797 029816 029877 $2,750.00 Penalty paid $2,500.00 Penalty paid $1,000.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid Master Agreed Order for Junef, 2014 Conference 0 Page 5 029878 029880 029884 Centerpoint Energy (Electric) 029900 Northeast Service, Inc. 029902 029905 029908 029909 029916 029917 Benjamin Franklin Plumbing $1,250.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $1,000.00 Penalty paid $2,750.00 Penalty paid City of Hutchins $1,000.00 Penalty paid Bridgepoint Communications Inc. 029918 Garcia Demolition 029920 Texas Community Propane, Ltd. $1,250.00 Penalty paid $1,250.00 Penalty paid $500.00 Penalty paid $1,250.00 Penalty paid $3,250.00 Penalty paid $1,250.00 Penalty paid 029925 City of Palmer Centerpoint Energy (Electric) 029929 City of Palestine Centerpoint Energy Entex Centerpoint Energy Entex Atmos Energy, West Texas Division City of Lubbock 029933 029934 029937 029940 029941 029942 029945 029946 029947 Circle C Construction 029949 029951 $1,000.00 Penalty paid $2,000.00 Penalty paid $500.00 Penalty paid Agritexgas, LP $1,250.00 Penalty paid $1,500.00 Penalty paid $1,500.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $500.00 Penalty paid $1,250.00 Penalty paid Agritexgas, LP $1,250.00 Penalty paid ARK Contracting Services K D Electric $1,000.00 Penalty paid Quality Excavation, Ltd. IES Residential Inc. AEP-Texas Atmos Energy, West Texas Division Wayne Holden Co. Ragsdale Plumbing Co. $1,500.00 Penalty paid $1,250.00 Penalty paid 029959 029963 Centerpoint Energy Entex Jitter Pump Service Texas Gas Service Company 029964 Nexlink $1,500.00 Penalty paid 029968 Infinity Classic Pools 029973 Centerpoint Energy Entex $2,250.00 Penalty paid $1,250.00 Penalty paid 029974 Romans Fence Co., Inc. $2,750.00 Penalty paid 029975 Centerpoint Energy Entex $1,250.00 Penalty paid 029983 City of Lubbock 029987 Centerpoint Energy Entex $1,250.00 Penalty paid $1,250.00 Penalty paid 029992 American Wall Systems LP 029997 Victor Andrade Concrete $2,750.00 Penalty paid 030001 030002 030003 Centerpoint Energy Entex $1,250.00 Penalty paid Centerpoint Energy Entex $1,250.00 Penalty paid $500.00 Penalty paid 030004 Sherrill Construction Targa Midstream Services LLC 029954 030015 Colonial Fence Company Co., Inc. $2,750.00 Penalty paid $1,750.00 Penalty paid $500.00 Penalty paid $500.00 Penalty paid $1,250.00 Penalty paid Master Agreed Order for June 12014 Conference 030016 Texas Gas Service Company 030017 030020 A.E.P. Texas Fisher Lease Service 030025 Centerpoint Energy Entex 030026 030028 030029 030032 030036 030037 030039 L & P Pipeline & Construction 030042 030044 S&H Construction 030045 03 0049 ' 030057 030059 Fort Davis Water Supply Corp. Centerpoint Energy Entex Atmos Energy, West Texas Division Texas Gas Service Company Water Department Centerpoint Energy Entex Patron Construction Southwest Destruction Page 6 $1,250.00 Penalty paid $500.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid $2,000.00 Penalty paid $1,000.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid $2,750.00 Penalty paid $500.00 Penalty paid $2,750.00 Penalty paid AEP/Swepco Atmos Energy, West Texas Division $1,000.00 Penalty paid $1,000.00 Penalty paid . Texas Community Propane, Ltd. $1,250.00 Penalty paid 030063 Texas Gas Service Company $1,250.00 Penalty paid 030065 City of Port Arthur Atmos Energy Corp., Mid-Tex Div. $2,750.00 Penalty paid Texas Gas Service Company $1,250.00 Penalty paid $1,750.00 Penalty paid 030074 City of Greenville $1,500.00 Penalty paid 030077 030078 030079 Centerpoint Energy Entex Pruski's Hauling $1,250.00 Penalty paid $1,250.00 Penalty paid Ecko Construction $2,750.00 Penalty paid 030080 Coserv Gas, Ltd. $1,250.00 Penalty paid 030082 030086 Texas Gas Service Company $2,250.00 Penalty paid Centerpoint Energy Entex Atmos Energy, West Texas Division $1,250.00 Penalty paid 030066 030067 030089 030090 West Texas Rural Telephone $1,250.00 Penalty paid $1,000.00 Penalty paid $2,250.00 Penalty paid 030095 Pruski's Hauling 030096 Texas Gas Service Company 030099 Infrasource $1,250.00 Penalty paid $2,750.00 Penalty paid 030103 Severn Trent Services $1,000.00 Penalty paid 030110 Centerpoint Energy Entex $1,250.00 Penalty paid 030111 Old Pal Construction and Concrete $2,750.00 Penalty paid 030112 030114 030115 030126 030128 Centerpoint Energy Entex Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid $1,250.00 Penalty paid $2,250.00 Penalty paid $1,750.00 Penalty paid 030130 City of Mineral Wells Texas Gas Service Company Pruski's Hauling West Texas Utility $2,250.00 Penalty paid $2,750.00 Penalty paid Master Agreed Order for Junef, 2014 Conference • Page 7 030131 Franco Builders $2,750.00 Penalty paid 030132 Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid 030133 030134 030136 030137 030140 030142 030143 030146 030148 030149 030150 030152 030155 030156 Atlas Foundation Repair $1,500.00 Penalty paid $1,250.00 Penalty paid Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid Arch Land Design Inc. $3,250.00 Penalty paid DCP Midstream, LP $1,250.00 Penalty paid Centerpoint Energy Entex $1,250.00 Penalty paid Angel Brothers Enterprises, Ltd. Charter Plumbing LLC $1,250.00 Penalty paid $1,250.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid $2,250.00 Penalty paid Atmos Energy, West Texas Division $1,250.00 Penalty paid Centerpoint Energy Entex $1,250.00 Penalty paid Oktex Utility Construction, Inc. $1,500.00 Penalty paid 030157 030169 030171 Coserv Gas, Ltd. Reytec Construction Resources, Inc. Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid 030175 030178 030181 EAS Contracting, LP Atmos Energy Corp., Mid-Tex Div. Palos Construction $2,250.00 Penalty paid $1,250.00 Penalty paid 030182 Centerpoint Energy Entex 030186 Centerpoint Energy Entex $1,250.00 Penalty paid $1,250.00 Penalty paid 030189 Centerpoint Energy Entex Cimarron Underground, Inc. Mid Plains Rural Telephone Cooperative $1,250.00 Penalty paid $2,250.00 Penalty paid $1,500.00 Penalty paid 030192 030195 030204 030205 030212 030214 030215 030231 Centerpoint Energy Entex $1,250.00 Penalty paid 3F Utility Construction Inc. $2,750.00 Penalty paid Texas Sterling Atmos Energy Corp., Mid-Tex Div. $2,750.00 Penalty paid $1,250.00 Penalty paid $2,750.00 Penalty paid $1,250.00 Penalty paid CA Electrical & Construction $2,250.00 Penalty paid Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid. 030232 030238 030242 City of Hutchins E.P. Brady, Ltd. Excavators & Constructors, Ltd. $1,500.00 Penalty paid $1,750.00 Penalty paid $1,250.00 Penalty paid 030245 030246 Buyers R. Builders $1,750.00 Penalty paid Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid 030248 Centerpoint Energy Entex $1,250.00 Penalty paid 030252 City of Iowa Park $1,000.00 Penalty paid 030190 030191 Centerpoint Energy Entex Holecek Construction Inc. Centerpoint Energy Entex Atmos Energy Corp., Mid-Tex Div. Orbit Construction $1,750.00 Penalty paid $1,250.00 Penalty paid $3,250.00 Penalty paid Master Agreed Order for June 17 2014 Conference • Page 8 $1,250.00 Penalty paid 030256 Atmos Energy Corp., Mid-Tex Div. 030259 Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid 030261 030262 030264 Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid Fire Line Services, Inc. $1,500.00 Penalty paid $1,250.00 Penalty paid 030267 030270 030271 030272 030274 030276 030277 030297 030298 030299 030303 030308 030314 030317 030319 030333 030336 Atmos Energy Corp., Mid-Tex Div. Atmos Energy Corp., Mid-Tex Div. Atmos Energy, West Texas Division Smithco $1,250.00 Penalty paid $1,250.00 Penalty paid Ace Fence $500.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $3,250.00 Penalty paid $1,000.00 Penalty paid $1,000.00 Penalty paid $1,250.00 Penalty paid $1,000.00 Penalty paid Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid Centerpoint Energy Entex $1,250.00 Penalty paid Centerpoint Energy Entex Atmos Energy, West Texas Division Atmos Energy, West Texas Division Jason Alley Grimmett Brother's Inc. Joslin Construction Centerpoint Energy Entex Centerpoint Energy Entex $1,250.00 Penalty paid $2,750.00 Penalty paid $500.00 Penalty paid $1,250.00 Penalty paid Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid 030337 Outdoor Management Services 030338 City of Brenham Tree Source Atmos Energy Corp., Mid-Tex Div. $3,250.00 Penalty paid $1,500.00 Penalty paid 030339 030340 030343 030347 030349 Anchor Fence Co. Centerpoint Energy Entex W.C.E.C. Centerpoint Energy Entex City of Port Arthur 030356 030359 030367 030372 030373 030374 030375 030378 ARS Plumbing 030379 030382 030383 030389 030391 Atmos Energy Corp., Mid-Tex Div. Saeco Electric & Utility, Ltd. City of Garland Centerpoint Energy Entex Triple B Services LLP City of Decatur City of McAllen L. Howard Construction, Inc. City of Spur BCI Mechancial Inc. Atmos Energy, West Texas Division Atmos Energy Corp., Mid-Tex Div. $500.00 Penalty paid $1,250.00 Penalty paid $1,500.00 Penalty paid $1,250.00 Penalty paid $2,250.00 Penalty paid $3,250.00 Penalty paid $1,000.00 Penalty paid $1,250.00 Penalty paid $1,500.00 Penalty paid $500.00 Penalty paid $1,500.00 Penalty paid $1,750.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid $500.00 Penalty paid $500.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid Master Agreed Order for June'02014 Conference Page 9 030395 030397 030400 Ritter Construction Company Circle C Construction Pharr Public Utilities $2,000.00 Penalty paid $500.00 Penalty paid 030404 030405 030407 Atmos Energy Corp., Mid-Tex Div. Austin Traffic Signal Construction Co. Atmos Energy Corp., Mid-Tex Div. $1,250.00 Penalty paid $1,250.00 Penalty paid $1,250.00 Penalty paid 030416 Online Directional Boring, LP 030419 Atlas Foundation Repair $2,250.00 Penalty paid 030433 Exerplay $2,750.00 Penalty paid $1,250.00 Penalty paid $500.00 Penalty paid Master Agreed Order for June#2014 Conference I Page 10 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 June 17, 2014. RAILROAD COMMISSION OF TEXAS • IRMAN BARRY T. SMITHERMAN duIsR &iAfr :k COMMISSIONER CHRISTI CRADDICK ATTEST: -.-. ; t/.. ! ".. . R LE-_ / l i •'w 3• t 't .; IWIQW ?.V??ilm WW WWI 7/ 1'7] 'Yf?r?f'??71?7 5: I y? WIWIMW Irwwr WW rm - . w?mw Ij'??vw 7791/ ;%?v?2grr?a?6: y? ?2 OZ VIM/?Jammy WW WI W, \gipf?a ?107% . Way/I3 ^ ^ L `^• ^t ^^^ ^ cl^ c;( --;I 0 ATMOS ENERGY RESPONSE TO VIOLATIONS GUD 9881 Violation 1. 192-013(b) File Name DOC001.PDF Atmos states in their response to the commission in the last paragraph of page one that "The Company's trained technicians are available 24/7, 365 days a year to quickly address system issues and technical training is an integral part of the safety initiatives at Atmos Energy". Also included with the document is their "Interim Supplemental Wet Weather Leak investigation Procedures" attached to POC stamped August 2, 2013. Violation 2. 192-603(b) Atmos addresses the violation in their Interim Supplemental Wet Weather Leak Investigation Procedures. They state "If gas is detected at any point during the outside leak investigation, bar test approximately 5-foot intervals until 0% to pin point the leak and determine the migration pattern". Violation 3. 192-805(b) Atmos addresses the violation in their "Interim Supplemental Wet Weather Leak Investigation Procedures" in the first paragraph. Violation 4. 192-613(b) Atmos completed its physical inspection of 100,000 Steel Service Lines in September 2012. Atmos continues to review and address Steel Service lines as a part of its ongoing operations. Mary Ross McDonald Director Barry T. Smitherman, Chairman David Porter, Commissioner Christi Craddick, Commissioner RAILROAD COMMISSION OF TEXAS Pipeline Safety Division November 15, 2013 455-21 Mr. Jeffrey S. Knights, Vice President, Technical Servic ATMOS ENERGY CORP., MID-TEX DIVISION P. 0. Box 223705 Dallas, TX 75222-3705 Re: Pipeline Safety Evaluation Inspection Package Number: 102051 ATMOS ENERGY/MESQUITE (All correspondence must include the Inspection Package Number) Dear Mr. Jeffrey S. Knights: We have received your letter of August 2, 2013, 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 Terry Sullivan in the Fort Worth Regional Office at (817) 882-8966. Sincerely, Mary Ross McDonald Director 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 Elaine Moore From: Sent: To: Cc: Subject: Attachments: Kendall Smith Wednesday, April 02, 20141:38 PM Elaine Moore Polly McDonald RE: GUD 09981; Atmos Energy, Mid-Tex Division PES_IP-102051_LtrNovlS-2013.pdf; ATMOS RESPONSE TO GUD 9881,docx Please see attached a copy of the completion letter in the Pipeline Safety Evaluation System (PES) and some additional summary of violation completion info, provided by Terry Sullivan from the Pipeline Safety regional field office in Fort Worth. From: Elaine Moore Sent: Thursday, March 27, 2014 10:34 AM To: Kendall Smith Subject: GUD 09981; Atmos Energy, Mid-Tex Division Hi, Kendall. I am working on notes for David Cooney for the Atmos case in the event the Commissioners have any questions. Could you give me some language I can use as to how compliance was achieved for the 3 violations cited, 49 CFR 192.13(c), 192.603(b) and 192.613(b). Also, regarding the steel line replacement, were all of the lines replaced in the system or just a percentage. If not all, can you tell me what percent. Lastly, when was the line replacement completed? Thanks for your help. I want to be clear on what constitutes compliance just in case. Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave. P0 Box 12967 Austin, Texas 78711 Phone: (512) 936-2301 1 Elaine Moore From: Sent: To: Subject: Elaine Moore Thursday, March 27, 2014 10:34 AM Kendall Smith GUD 09981; Atmos Energy, Mid=Tex Division Hi, Kendall. I am working on notes for David Cooney for the Atmos case in the event the Commissioners have any questions. Could you give me some language I can use as to how compliance was achieved for the 3 violations cited, 49 CFR 192.13(c), 192.603(b) and 192.613(b). Also, regarding the steel line replacement, were all of the lines replaced in the system or just a percentage. If not all, can you tell me what percent. Lastly, when was the line replacement completed? Thanks for your help. I want to be clear on what constitutes compliance just in case. Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave. PO Box 12967 Austin, Texas 78711 Phone: (512) 936-2301 1 .,^..^-^-m__^^_-LF' . ^-` c^c. -^ -- ^G^'1r^ _ _'^ , ^-____c-^ ,^. ---^ -^^^ cr). G,^^ .Q1•^ ` ^r prn n - ^^^ ^ C^ --:) C)O? C- O-C ^\ F I Barry T. Smitherman, Chairman David Porter, Commissioner Mary Ross McDonald Director Christi Craddick, Commissioner RAILROAD COMMISSION OF TEXAS Pipeline Safety Division November 15, 2013 455-21 Mr. Jeffrey S. Knights, Vice President, Technical Servic ATMOS ENERGY CORP., MID-TEX DIVISION P. O. Box 223705 Dallas, TX 75222-3705 Re: Pipeline Safety Evaluation Inspection Package Number: 102051 ATMOS ENERGY/MESQUITE (All correspondence must include the Inspection Package Number) Dear Mr. Jeffrey S. Knights: We have received your letter of August 2, 2013, 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 Terry Sullivan in the Fort Worth Regional Office at (817) 882-8966. Sincerely, P"4.1 Mary lross McDonald Director 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 Page 1 of 1 Choose an Application ^^ Log Out Go Remittance Management System Remittance Management Main 0.232 sec Remittance Information Control Information Control Number: 17017 Remit Date: 03/18/2014 Control Status: CLOSED Register: MACHINE 2 Total Entered: 494,372.00 Credit Total: 0.00 Check Total: 494,372.00 Cash Total: 0.00 Remittance Information Remit Status: IN FINANCE Register Number: 3088563 . Tracking Number: Receipt Number: Received Date: 03/18/2014 Payment Method: 1 - CHECK Check Number: 1356976 Received Amount($): 95,000.00 Al l oca ted ( $): 95,000.00 Unallocated($): 0.00 Replacement Payment: N Returned Check Reg. #: Type of Card: Last 4 Digits: Expiration Date: Remitter Information First Name: Middle Name: Last Name: Payee Id: Company Name: ATMOS ENERGY CORPORATION Email Address: Phone Number: Authorization Information Direct Return : Date Authorized: Authorized by: Auth. Code: Merchant Id: Trans. Date/Time: Settlement Date: Trace No.: Forms Information Forms Attached: Alloc Id 568402 GC -- General Counsel - No Form Alloc Date Fee Code/ Description 3/20/2014 7:30:37 PM SUSPENSE (SUSPENSE) Amount 95 , 000.00 Total Adjust Amount Current Alloc 0.00 95 , 000.00 Other pocuments Benefactor ATMOS ENERGY CORPORATION Property Alloc Status IN FINANCE User ID rmsbatch Return Disclaimer I RRC Online Home I RRC Home I Contact http://webapps.rrc. state.tx.us/RM/remittanceInfoDetailAction.do?searchByRegisterNoLink... 3/27/2014 Page 1 of 1 Enter/Edit Allocation Adju^nt Choose an Application ^ v Go Log Out Remittance Management System Remittance Management Main 0.394 sec Enter/Edit Allocation Adjustment Control Information Control Status: CLOSED Re mit Date: 03/18/2014 Control Number: 17017 Remit Status: PENDING ADJUST Remittance Information Register Number: 3088563 s 03/18/2014 Received Date: Tracking Number; Received Amount($): 95,000.00 Receipt Number: Allocated($): 95,000.00 UnAllocated($): 0.00 Remitter Name: ATMOS ENERGY CORPORATION Payee Id: Payment Methqd: 1 - CHECK Last 4 Digits: Exp. Date: Auth. Code: Trace No.: Trans. Date/Time: Settlement Date: Merchant Id: Type of Card: / Authorization Information Create New Allocation ❑ Add Allocation Property: Create Alloc Id Benefactor: Amount($): Fee Code: V Name: Submit Adj. New Allocation Date Value: Fee Code/ Description Amount Total Adjust Current Allocation Benefactor Undo Return Showing: 1- 2 of 2 results . Property Al loc Edit / Delete Status Amount LG-GUD-SF $95,000.00 570916 03/27/2014 (Legal Enforcement) 568402 03/20/2014 SUSPENSE $0.00 $95,000.00 GUD 09981 $95,000.00 $-95,000.00 ATMOS $0.00 ENERGY CORPORATION PENDING FINANCE Delete Edit Disclaimer I RRC Online Home I RRC Home I Contact http://webapps.rrc.state.tx.us/RM/allocationAdjustmentAction.do 3/27/2014 AMARILLO NATIONAL BANK Amarillo, TX Atmos Energ,v, Corporatiqn : . Gfi^CKQAT^":; 's;CHECK NUMBER,::;;: t ><: OB4M^r^;14:;. 1 356976°^::;';''...:^.? .; PO Box 650205 Dallas,TX 75265^02 . `CH^CKAMOil:NT .':i ..:^****^*** 9^5;Q90:00 , : Void After 90 Days PAY: Ninety-Five Thousand DoQars And Zero Cents************** RAILROAD COMMISSION OF TEXAS 1701 N CONGRESS AVE AfJS^'IN,.7X;78701-14f12, riittatiNs 11' 135694611' 1:1113242191: 11300 05310 NO.1356976 DATE: 05-Mar-14 F1^iQT^iSCo. ___- _ . ^.^.. :, , CHE030514 VENDOR NAME: RAILROAD COMMISSION OF TEXAS I1+kV t^E17;4 E AI^IC3 . T > . _ .. ^ :_,......_ z _. . < --- 05-MAR-14 95,000.00 VENDOR No: 205639 ^^t3 .'f ltlS?C4^l^ _ .. . _.. .. .,, ..^. ^ 0.00 _.:. l^f^ t^ G^^fV7 _ . 95,000.00 SH- DIANE WITTEN - GUD DOCKET PLEASEDETACHANDRETAINTHISSTATEMENTASYCURRECORDOFPAYMENT. 4815570 95,000,00 0.00 95,000.00 AMARILLO NATIONAL BANK . :° Al, M ari'€iTX . ... HOC,K ANIO^:NT . 'CCiECKAATE':`:;. :.:CHECK NUMl3El^'..::, Atmos Ener^,K Corpor.a.,tion,,.. f'O Box 650205 : ::; ;;; .:•s ' Dallas,TX 7526a^i *:::95 -Q0:00 1356976 OB Wn1 4: Void After 90 Days PAY: Ninety-Five Thousand Dollars And Zero Cents************** TO THE RAILROAD COMMISSION OF TEXAS ORDER:OF 1701 N CONGRESS AVE ALJS^'li^l:`f`X.,:78701-14-0-9- ii' L3569?611' 1:11i3242L91: 11'00 0531ii' NO. 1356976 VENDOR NAME: RAILROAD COMMISSION OF TEXAS DATE: 05-Mar-14 ^} ^ _ • x^1 !(.[ /^ zTlt3l^i ,.,._ _ __. _,.,_ .... ..... CHE030514 y^ ^+ ..Ga ^^fRb^F.t" : y 4., .^,,.:.... , 5-MAR-14 m. ^ VENDOR No: 205639 ., _., {R/'^ a^._-..,._....^-.^.....,...,....,e.. ^+^+ {^ ^. . 95,000.00 0.00 95,000.00 0.00 ^..Sa __^ _ 95,000.00 SH- DIANE WITTEN - GUD DOCKET PLEASE DETACH AND RETAIN THIS STATEMENT AS YOUR RECORD OF PAYMENT. 4815570 95,000.00 • DATE: 05-Mar-14 INVCAI^ Gy^ ^^R^T [71W ° _N ^, NO. 1356976 VENDOR NAME: RAILROAD COMMISSION OF TEXAS -- - - , .INVOtC3^ DA^E CHE030514 05-MAR-14 - - VENDOR No: 205639 -- ... t3iiNT 95,000.00 NET AMQU:NT 0.00 95,000.00 SH- DIANE WITTEN - GUD DOCKET r^tiE7p.^^,^ PLEASE DETACH AND RETAIN THIS STATEMENT AS YOUR RECORD OF PAYMENT. 4815570 95,000.00 0.00 95,000.00 Parsley Coffin^enner Post Office Box 13366 Austin, Texas 78711 Telephone (512) 879-0900 Fax (512) 879-0912 A Limited Liability Partnership March 13, 2014 VIA HAND DELIVERY Ms. Elaine Moore Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Austin, Texas 78701 Re: 0 GUD No. 09981; Enforcement Action against Atmos Energy Corp., Mid-Tex Division (Company ID 6776) for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System (System ID 610980), Dallas County, Texas Dear Ms. Moore: Pursuant to our earlier conversation, enclosed herewith is an executed Consent Order in connection with the above-referenced docket. I have also enclosed Atmos Energy Corp.'s check in the amount of Ninety-five Thousand Dollars ($95,000.00) pursuant to the terms of the proposed order. Thank you for your attention to this matter. Please contact me if you have any additional questions. regard AMC/ltr Enclosure 98 San Jacinto Boulevard, Suite 145o, Austin, Texas 78701 Elaine Moore From: Sent: To: Subject: Attachments: Elaine Moore Monday, March 03, 2014 11:57 AM ann.coffin@pcrllp.com GUD 09981; Atmos Energy DOC.PDF Ann - Attached is the revised order. Let me know if you have any questions. Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave. Austin, Texas 78711 Phone: (512) 936-2301 1 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID 610980), DALLAS COUNTY, TEXAS CONSENT ORDER The Enforcement Section of the Commission, through its attorney, announces that the Enforcement Section and Atmos Energy Corp., Mid-Tex Division ("Respondent") have agreed to an informal disposition of the matters under this docket through this Consent Order ("Order"), subject to the approval of the Commission. The Commission has authority to informally dispose of this case through a consent order pursuant to TEX. GOV'T CODE ANN. § 2001.056(3). IN SETTLEMENT OF THIS DOCKET, the Enforcement Section of the Commission and Respondent do hereby agree and stipulate as follows: 1. Respondent is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. Respondent is an "operator" as that term is defined in Title 16, Section 8.5(20) of the Texas Administrative Code. 3. Respondent is a "person" as that term is defined in Title 16, Section 8.5(21) of the Texas Administrative Code. 4. Respondent is a "gas company" as that term is defined in Title 16, Section 8.5(11) of the Texas Administrative Code. 5. The Enforcement Section and Respondent hereby agree that the alleged violations set forth in Gas Utilities Docket No. 09981 regarding Safety Evaluation No. 2010-0703, are hereby settled and compromised under the terms of this Order. 6. Respondent makes no admission of any alleged pipeline safety violation, but wishes to address the Commission's concerns under the terms of this Order. 7. The Commission wishes to further the goal of safe operations of gas pipeline facilities within the State of Texas. 8. Respondent has elected not to avail itself of the opportunity for public hearing. 9. The Commission has jurisdiction to assess an administrative penalty against Respondent pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. Consent Order, GUD No. 09981, Page 2 10. The violations alleged in Gas Utilities Docket No. 09981 are in compliance with the requirements of 49 CFR 192.13(c), 49 CFR 192.603(b), and 49 CFR 192.613(b). 11. An administrative penalty in the amount of NINETY-FIVE THOUSAND DOLLARS($95,000.00) shall be recovered by the Commission for the violations asserted against Respondent. 12. Respondent has placed into the possession of the Commission funds in the amount of NINETY-FIVE THOUSAND DOLLARS ($95,000.00) as payment of administrative penalties assessed in Gas Utilities Docket No. 09981 pursuant to TEX. UTIL. CODE ANN. § § 121.206 and 121.207. 13. The person signing hereunder for Respondent has authority to represent Respondent in this matter. Jurisdiction of this docket having been established and an agreement of the parties having been reached, it is, therefore, ORDERED by the Railroad Commission of Texas that Atmos Energy Corp., Mid-Tex Division is assessed an administrative penalty in the amount of NINETY-FIVE THOUSAND DOLLARS ($95,000.00), and that Gas Utilities Docket No. 09981 is informally disposed of and closed by this Consent Order. 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: Jeffrey S. Knights Vice President, Technical Service • • Elaine Moore From: Sent: To: Subject: Elaine Moore Monday, February 24, 2014 11:01 AM 'Ann M. Coffin' RE: GUD 09981; Atmos I have no problem with your proposed change. From: Ann M. Coffin [mailto:ann.coffin0pcrllp.com] Sent: Friday, February 14, 2014 11:56 AM To: Elaine Moore Subject: Re: GUD 09981; Atmos Elaine - Thanks for forwarding this. The docket reference in paragraph 10 has a typo (see below) and I'm wondering if we can make one minor change to the language in paragraph 10 to read as follows: 10. The violations alleged in Gas Utilities Docket No. 00981 09981 have been ^l°^°d are in compliance by °°c^^^with the requirements of 49 CFR 192.13(c), 49 CFR 192.603(b), and 49 CFR 192.613(b). Please let me know and thanks again. Hope you have/had a great week off (depending on when you read this). Ann From: "Elaine Moore" To: "ann coffin" Sent: Tuesday, February 11, 2014 3:17:37 PM Subject: GUD 09981; Atmos Dear Ann - Attached is the Consent Order we discussed regarding Gas Utilities Docket No. 09981. As you know, I will be out of the office until February 24th. We can discuss any issues you may have upon my return. Sincerely, Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave. Austin, Texas 78711 Phone: (512) 936-2301 1 Elaine Moore From: Sent: To: Subject: Attachments: Elaine Moore Tuesday, February 11, 2014 3:18 PM 'ann.coffin@pcrllp.com' GUD 09981; Atmos DOC.PDF Dear Ann - Attached is the Consent Order we discussed regarding Gas Utilities Docket No. 09981. As you know, I will be out of the office until February 24th. We can discuss any issues you may have upon my return. Sincerely, Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave. Austin, Texas 78711 Phone: (512) 936-2301 i RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID 610980), DALLAS COUNTY, TEXAS CONSENT ORDER The Enforcement Section of the Commission, through its attorney, announce that the Enforcement Section and Atmos Energy Corp., Mid-Tex Division ("Respondent") have agreed to an informal disposition of the matters under this docket through this Consent Order ("Order"), subject to the approval of the Commission. The Commission has authority to informally dispose of this case through a consent order pursuant to TEX. GOV'T CODE ANN. § 2001.056(3). IN SETTLEMENT OF THIS DOCKET, the Enforcement Section of the Commission and Respondent do hereby agree and stipulate as follows: 1. Respondent is a "gas utility" as that term is defined in Section 121.001 of the Texas Utilities Code. 2. Respondent is an "operator" as that term is defined in Title 16, Section 8.5(20) of the Texas Administrative Code. 3. Respondent is a "person" as that term is defined in Title 16, Section 8.5(21) of the Texas Administrative Code. 4. Respondent is a "gas company" as that term is defined in Title 16, Section 8.5(l1) of the Texas Administrative Code. 5. The Enforcement Section and Respondent hereby agree that the alleged violations set forth in Gas Utilities Docket No. 09981 regarding Safety Evaluation No. 2010-0703, are hereby settled and compromised under the terms of this Order. 6. Respondent makes no admission of any alleged pipeline safety violation, but wishes to address the Commission's concerns under the terms of this Order. 7. The Commission wishes to further the goal of safe operations of gas pipeline facilities within the State of Texas. 8. Respondent has elected not to avail itself of the opportunity for public hearing. 9. The Commission has jurisdiction to assess an administrative penalty against Respondent pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. r Consent Order, GUD No. 09981, Page 2 10. The violations alleged in Gas Utilities Docket No. 00981 have been placed in compliance by Respondent with the requirements of 49 CFR 192.13(c), 49 CFR 192.603(b), and 49 CFR 192.613(b). 11. An administrative penalty in the amount of NINETY-FIVE THOUSAND DOLLARS($95,000.00) shall be recovered by the Commission for the violations asserted against Respondent. 12. Respondent has placed into the possession of the Commission funds in the amount of NINETY-FIVE THOUSAND DOLLARS ($95,000.00) as payment of administrative penalties assessed in Gas Utilities Docket No. 09981 pursuant to TEX. UTIL. CODE ANN. § § 121.206 and 121.207. 13. The person signing hereunder for Respondent has authority to represent Respondent in this matter. Jurisdiction of this docket having been established and an agreement of the parties having been reached, it is, therefore, ORDERED by the Railroad Commission of Texas that Atmos Energy Corp., Mid-Tex Division is assessed an administrative penalty in the amount of NINETY-FIVE THOUSAND DOLLARS ( $95,000.00), and that Gas Utilities Docket No. 09981 is informally disposed of and closed by this Consent Order. 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: Jeffrey S. Knights Vice President, Technical Service 0 AGRE ED ORDERS, OTHER THAN 14 ^ 2) CONFERENCE DATE: December 14, 2010 OPERATOR NAME: Atmos Energy Corp., Mid-Tex Division. OPERATOR NUMBER: Company ID No. 6776 DOCKET NUMBER: GUD 09981 LEASE & WELL NO: Mesquite Pipeline System, ID#610980 FIELD & COUNTY: Dallas Coun . , Texas RULES VIOLATED: 40 CA f 1911 DATES VIOLATIONS BEGAN: 49 GPR j 192 . 603 (b)' and 49 CFR § 192.613 (b) November 2!?^D^ VIOLATIONS: 49 CFR § 192 13 (c) • Plans , procedures and/or programs required by Part 49 CFR 192 were not maintained, =^` ' modified, or followed as necessary;^5 Q,,-^,--= to administer the op eration and maintenance plan were not 49 CFR 192.603(b) : Records were necess 2maintained or were inadequate; Ce- 49 CFR § 192.613(b): The listed segment was found in unsatisfactory condition , but there was no p rogram " ( "X) to recondition or phase out the segment. COMPLIANCE DATE: November 29, 2010 MANNER OF COMPLIANCE: Replacing steel service lines and an gpproved settlement agreement which includes the replacement of all steel service lines by September 20, 2012 DOCUMENTATION OF COMPLIANCE: PENALTY PAID: E-mail to Lowell Williams from Phil Gamble dated November 29, 2010 1900000 REMARKS: STAFF ATTORNEY: LEGAL ,1SSIS"I'AN^T_ 9T • ^ Parsley Coffin Renner A Limited Liability Partnership Post Office Box 13366 Austin, Texas 78711 Telephone (512) 879-0900 Fax (512) 879-0912 August 2, 2010 Ms. Mary McDaniel Director, Safety Division Railroad Commission of Texas 1701 N. Congress Austin, Texas-78701 Re: Atmos Energy Corporation, Mid-Tex Division Pipeline Safety Evaluation No. 20100703 'Insp.ection Package No. 1,02051 Mesquite Dear Ms. McDaniel: Atmos Energy Corp., Mid-Tex Division ("Atmos' or "the Company") has received your letter dated July 2, 2010 regarding the Company's May 27, 2010 response to the referenced safety evaluation. In your correspondence, you propose revisions to the Company's correction plan and request that the. Company provide a copy of the protocols it has developed for wet weather investigations. As you know, the Commission has initiated a contested case involving Safety Evaluation No. 20100703, which has been docketed as GUD 9981; Enforcement Action against Atinos Energy Corp., Mid-Tex Division for Violations of * Pipeline Safety Regulations at the Mesquite Pipeline System. This enforcement action was initiated in response to a request by the Commission's Pipeline Safety Division, Given the pending status of this enforcement action, the Company does not feel that it is appropriate to address any issues involving this matter outside the context of that proceeding. The Company does, however, look forward to working with the Commission in a manner that will allow the parties to reach a mutually agreeable resolution of the issues involved in GUD No. 9981. In the meantime, I wish to assure you and the Commission that Atmos Energy is, and continu,es to be, dedicated to pro.viding the safest and highest quality service to ourcustomers, AMC/ltr 98 San Jacinto Boulevard, Suite 1450, Austin, Texas 78701 Page l of l Elaine Moore - Re: GUD 09981; Atmos From: To: Date: Subject: Carrie Smith Moore, Elaine 5/8/2012 11:11 AM Re: GUD 09981; Atmos Not in compliance :( Polly and David are working on a letter to the Operator at this time. I will forward to you as soon as it is finished. >>> Elaine Moore 5/8/2012 10:43 AM »> Hi, Carrie. Any chance that Atmos is in compliance in this case so we can settle it? I am keeping my fingers crossed! file://C:\Documents and Settings\MooreE\Local Settings\Temp\XPGrpWise\4FA8FF6BRR... 5/8/2012 • Elaine Moore From: Sent: To: Subject: Carrie Ebbinghaus Monday, November 18, 2013 11:41 AM Elaine Moore RE: GUD9981 Po!!y is out of town this week but I have forwarded to her and will wait for her response. Thanks! From: Elaine Moore Sent: Monday, November 18, 2013 9:14 AM To: Carrie Ebbinghaus Subject: RE: GUD9981 Good news. When I talked to Polly about this not too long ago, she indicated that she was going to look into the penalty amount and let me know what she would be willing to settle for. Will you please let me know if a decision has been made. Thanks. From: Carrie Ebbinghaus Sent: Friday, November 15, 2013 10:11 AM To: Elaine Moore Subject: GUD9981 This operator is now in compliance and the inspection package has been closed. i S I Elaine Moore From: Sent: To: Subject: Carrie Ebbinghaus Friday, November 15, 2013 10:11 AM Elaine Moore GUD9981 This operator is now in compliance and the inspection package has been closed. 1 VICTOR G. CARRILLO, CHAIRMAN ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, DIRECTOR MICHAEL L. WILLIAMS, COMMISSIONER June 2, 2010 ENFORCEMENT SECTION Ms. Patti Richards, V. P. Technical Services Atmos Energy Corp., N(i^FN(MoF GENERAI. COUNSEL PO Box 223705 Dallas, Texas 75222-3705 Via Regular and Certified Mail Return Receipt No. Re: OFFER OF SETTLEMENT - GUD 09981; Enforcement Action Against Atmos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System Dear Ms. Richards: Please be advised that the above-referenced case has been referred to the Commission's Enforcement Section to collect an administrative penalty and to obtain compliance from Atmos Energy Corp., Mid-Tex Division ("Atmos") with violations of 49 CFR 192.13(c) [plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified or followed as necessary]; 49 CFR 192.603(b) [records necessary to administer the-operation and maintenance plan were not maintained or were inadequate]; and 49 CFR 192.613(b) [pipeline segments were found in unsatisfactory condition, but there was no program to recondition or phase out the segments]. These violations were cited during a safety evaluation of Atmos' Mesquite system conducted between December 8, 2009 and March 25, 2010 (Safety Evaluation No. 200100703). Specifically, Atmos was found to be in violation of 49 CFR 192.13(c) for failing to properly enact emergency plan procedures during the investigation of the explosion at 2505 Catalina Drive in Mesquite, Texas, which occurred on November 20, 2009. Atmos not only failed to use all possible leak detection equipment and personnel at the incident site but also failed to investigate the cause of the explosion, detect gas concentrations, and create a Grade 1 leak for the explosion site until seventeen (17) days after the initial call. Violations of 49 CFR 192.603(b) were cited as a result of Atmos' repeated failure to maintain leak grading and leak monitoring data as exemplified in Leak Nos. 459302; 458826; 458825; and 458824 in which Atmos failed to indicate that bar testing was performed in each direction to 0% on the leak sketches. Lastly, data submitted as part of the PS-95 leak report reveals that Atmos has a leak rate of over 64% for its steel services in all leaks repaired within the Mesquite system in the past year. This rate of leak detection indicates a potential safety hazard and the need for an expedited June 1, 2010 Ms. Patti Richards - GUD 09981 Page Two program to recondition or phase out the steel service lines within the Mesquite systems as required by 49 CFR 192.613(b). Although Atmos has begun to replace the steel service lines with a-new°M generation of r^'y°*hyIi„° service lines within the Mesquite system, a°^*^^^comprehensive steel service line replacement program providing risk rankin g for replacement, date specific time frames for removal, risk ranking of M°„Iae°m°n+, and provisions for increased 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AusTIN, TEXAS 78711-2967 * PHONE: 512/463-6762 FAX: 512/463-6989 TDD 806-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us VICTOR G. CARRILLO, CHAIRMAN ELIZABETH A. JONES, COMMISSIONER LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, DIRECTOR MICHAEL L. WILLIAMS, COMMISSIONER ENFORCEMENT SECTION OFFICE OF GENERAL COUNSEL leakage surveys in the Mesquite system must be implemented. Should this case go to hearing, Enforcement would be seeking an order for compliance and a recommended penalty of not less than $190,000.00 (violation of 49 CFR 192.13(c) at $10,000.00 per day for 17 days and violation of 49 CFR 1-92.603(b) at $20,000.00, with zero penalty requested for violation of 49 CFR 192.613(b)). However, if by or before July 5, 2010, Atmos pays a settlement penalty amount of $95,000.00 (50% reduction of the penalty which would otherwise be requested at hearing) and brings the referenced violations into compliance and is amenable to implementing an expedited steel service line replacement program within the Mesquite system as elaborated in the attached proposed Stipulation, Agreed Settlement And Consent Order, Enforcement would be willing to recommend the Commission settle the case on such terms. For your information, the penalty must be paid by check made payable to the Railroad Commission, reference GUD No. 09981 and be sent to the Railroad Commission, Attn: Enforcement at 1701 N. Congress Ave., P.O. Box 12967, Austin, Texas, 78711. Please be advised that if I do not receive the settlement penalty amount, confirmation of compliance and the executed Stipulation, Agreed Settlement And Consent Order by no.later than 5:00 p.m. on Monday, July 5th, this offer will be deemed to have been rejected and a formal Complaint will be filed. At such time, there will be no opportunity for further negotiations. If you have any questions, do not hesitate to contact me. Sincerely, Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Phone: (512) 936-2301 1701 NORTH CONGRESS AvENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 * PHONE: 512/463-6762 FAx: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20010070320100703), AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER On this the day of , 2010, the above-captioned docket came on for consideration by the Railroad Commission of Texas ("Commission"). The Pipeline Safety Division of the Commission, through its Director ("Director"), announced that the Pipeline Safety Division 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"), subject to the approval of the Commission. The Commission has authority to informally dispose of this contested case docket through a consent order pursuant to Texas Government Code Annotated Section 2001.056(3). IN SETTLEMENT OF THE MATTERS AT ISSUE IN THIS DOCKET, the Pipeline Safety Division 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 Tex. Util. Code, Chapter 121, Subchapter E, Atmos is a"person" as that term is defined by 16 Texas Administrative Code Section 8.5(21). &3. Atmos is an "operator" as that term is defined in Title 16, Section 8.5(20) of the Texas Administrative Code. 6:4. Atmos operates gas pipeline facilities and is engaged in the transportation of gas as defined by 16 Texas Administrative Code Section 8.5(23) and 8.5(28) 7:5. Atmos is a "gas company" as that term is defined in Title 16, Section 8.5(11) of the Texas Administrative Code. $:6. Atmos makes no admission of any alleged pipeline safety violations, but wishes to address the Commission's concerns under the terms of this Order. 9:7. The Commission and Atmos wish to further the goal of the safe operation of natural gas 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 * PHONE: 512/463-6762 FAX: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us pipeline facilities within the State of Texas. 40-.8. Pursuant to Section 2001.051 of the Texas Government Code, the Commission gave Atmos an opportunity for a hearing regarding the matters at issue in this docket, and Atmos has elected not to avail itself of the opportunity for a hearing. 44-.9. The Commission has jurisdiction to assess an administrative penalty against Atmos pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 2-.10. An administrative penalty in the amount of NINETY FIVE THOUSAND DOLLARS ($95,000.00) shall be recovered by the Commission for the violation asserted against Respondent. 4-311. Atmos has placed into the possession of the Commission funds in the amount of NINETY FIVE THOUSAND DOLLARS ( $95,000.00) as payment of administrative penalties assessed in Gas Utilities Docket No. 09981 pursuant to TEX. UTIL. CODE ANN. §§ 121.206 and 121.207. 4-412. The Pipeline Safety Division and Atmos hereby agree that the alleged violations of 49 CFR ^ 192.13(c); 49 CFR 192.603(b) and 49 CFR 192.613(b) set forth in Gas Utilities DocketNo. 09981 regarding Safety Evaluation ID No. 20047-03,20100703 are hereby settled and compromised under the terms of this Order. 4-&13. In the summer of 2009, Atmos conducted specialized leakage surveys at the request of the Pipeline Safety Division. 4-6:14. As a result of the meetings and data collected and analyzed, Atmos and the Pipeline Safety Division began work to revise leakage survey frequencies and to develop a plan to replace all steel service lines. 1^.:15. Pipeline Safety Division and Atmos representatives have worked to develop and approve the risk based leak survey program for Atmos distribution facilities, including the Mesquite Pipeline System (System ID No. 610980). As part of this Order, these discussions will continue to prioritize the leak survey frequencies for the Mesquite Pipeline System (System ID No. 610980). 4-816. Atmos developed a voluntary program to replace all steel service lines from its natural gas distribution facilities and pipelines and replace it with a newer generation of service lines. The service line replacement program that is currently in place will be expanded by this Order to provide date specific time frames for removal, risk ranking of replacement, and provisions for increased leakage surveys in the Mesquite Pipeline System (System ID No. 610980). 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TEXAS 78711-2967 * PHONE: 512/463-6762 FAX: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us Stipulation, Agreed Settlement and Consent Order Gas Utility Docket No. 09981, page 3 4-3:17. Atmos agrees to efeate-a-maintain its' risk model on which te-base-its leak -survey program for the Mesquite Pipeline System (System ID No. 610980) is based to identify and prioritize the steel service line replacement. The priority and ranking system for steel service line replacement shall be based upon the degree of hazard for such system or segment within such system. The risk model shall identify risk factors and determine the degree of hazard associated with those risk factors. Atmos agrees to submit the time schedule for the remaining replacement using the risk model for the Mesquite Pipeline System (System ID No. 610980) by Jul 30 , 2010 for approval by Pipeline Safety Division. 34:18. Atmos agrees to submit plans for replacement including the method of replacement, materials selected, joining procedures, and plans to install excess flow valves at all replaced service line locations as applicable for the Mesquite Pipeline System (System ID No. 610980) by Jul 30 , 2010 for approval by Pipeline Safety Division. 4&19. Atmos agrees to conduct more frequent surveys for the Mesquite Pipeline System (System ID No. 610980) in those areas with the greatest potential for leakage and where leakage could be expected to create a hazard. Atmos agrees the following factors, although not limited to, will be used to establish an increased frequency of leakage surveys in those areas that contain steel service lines: (a) pipe location, which means proximity to buildings or other structures and the type and use of the buildings and proximity to areas of concentrations of people; (b) composition and nature of the piping system, which means the age of the pipe, materials, type of facilities, recent construction activities, operating pressures, leak history records, and other studies; (c) the corrosion history of the service lines, which means known areas of significant corrosion or areas where corrosive environments are known to exist, (d) environmental factors that affect gas migration, which means conditions that could increase the potential for leakage or cause leaking gas to migrate to an area where it could create a hazard, such as extreme weather conditions or events (significant amounts or extended periods of rainfall, extended periods of drought, unusual or prolonged freezing weather, hurricanes, etc.), particular soil conditions, unstable soil or areas subject to'earth movement, subsidence, or extensive growth of tree roots around pipeline facilities that can exert substantial longitudinal force on the pipe and nearby joints; and (e) any other condition known to the operator that has significant potential to initiate a leak or to permit leaking gas to migrate to an area where it could result in a hazard, which could include construction activity near the pipeline, wall-to-wall pavement, trenchless excavation activities (e.g., boring), blasting, large earth-moving equipment, heavy traffic, increase in operating pressure, and other similar activities or conditions. 1701 NORTH CONGRESS AvENUE * POST OFFICE BOX 12967 * AuSTIN, TEXAS 78711-2967 * PHONE: 512/463-6762 FAX: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us Stipulation, Agreed Settlement and Consent Order Gas Utility Docket No. 09981, page 4 39-.20. In the event that Atmos fails to comply with any of the terms of this Order, the Director shall immediately initiate an enforcement proceeding against Atmos, and pursuant to Texas Utilities Code Section 121.206, the Commission may assess a $10,000 penalty for each day the steel service line replacement program for the Mesquite Pipeline System (System ID No. 610980) remains noncompliant. 40-.21. The Director signing hereunder has authority to represent the Commission in this docket. 44-.22. The person signing hereunder for Atmos has authority to represent Atmos in this docket. The Commission's jurisdiction in this docket having been established and an agreement of the parties having been reached, it is, therefore, ORDERED by the Railroad Commission of Texas that: 1. Atmos Energy Corp., Mid-Tex Division is assessed an administrative penalty in the amount of NINETY FIVE THOUSAND DOLLARS ($95,000.00), and further 2. Atmos Energy Corp., Mid-Tex Division maintain and modify as necessaritsereate-a risk model in accordance with the provisions of this Order on which to base its survey program for the Mesquite Pipeline System (System ID No. 610980) to identify and prioritize steel service line replacement, and further 3. Atmos Energy Corp., Mid-Tex Division resurvey the Mesquite Pipeline System (System ID No. 610980) for steel service lines in accordance with the provisions of this Order, and undertake all necessary measures to remove all hi h risk steel service lines and replace them with newer generation of service lines by December , and futher 31,2010 4. ..- Atmos Energy Corp., Mid-Tex Division conduct more frequent leak surveys for the Mesquite Pipeline System (System ID No. 610980) in accordance with the provisions of this Order. and that Gas Utilities Docket No. 09981 is informally disposed of and closed by this Stipulation, Agreed Settlement and Consent Order. DONE THIS DAY OF 2010. 1701 NORTH CONGRESS AVENUE * POST OFFICE BOX 12967 * AUSTIN, TExns 78711-2967 * PHONE: 512/463-6762 FAx: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITY EMPLOYER http://www.rrc.state.tx.us Stipulation, Agreed Settlement and Consent Order Gas Utility Docket No. 09981, page 5 RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by Master Agreed Order dated , 2010.) Attest: APPROVED AS TO FORM AND SUBSTANCE Mary L. McDaniel, Director of Safety Division Railroad Commission of Texas Atmos Energy Corp., Mid-Tex Division By: Its: 1701 NORTH CONGRESS AvENUE * POST OFFICE Box 12967 * AUSTIN, TExAS 78711-2967 * PHONE: 512/463-6762 FAX: 512/463-6989 TDD 800-735-2989 OR TDY 512-463-7284 AN EQUAL OPPORTUNITYEMPLOYER http://www.rrc.state.tx.us LINDIL C. FOWLER, JR., GENERAL COUNSEL VICTOR G. CARRILLO, CHAIRMAN LOWELL E. WILLIAMS, DIRECTOR ELIZABETH A. JONES, COMMISSIONER ENFORCEMENT SECTION MICHAEL L. WILLIAMS, COMMISSIONER OFFICE OF GENERAL COUNSEL June 1, 2010 Ms. Patti Richards, V. P. Technical Services Atmos Energy Corp., Mid-Tex Division PO Box 223705 Dallas, Texas 75222-3705 Via Regular and Certified Mail Return Receipt No. Re: OFFER OF SETTLEMENT - GUD 09981; Enforcement Action Against Atmos Energy Corp., Mid-Tex Division Dear Ms. Richards: Please be advised that the above-referenced case has been referred to the Commission's Enforcement Section to collect an administrative penalty and to obtain compliance from Atmos Energy Corp., Mid-Tex Division ("Atmos") with violations of 49 CFR 192.13(c) [plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified or followed as necessary]; 49 CFR 192.603(b) [records necessary to administer the operation and maintenance plan were not maintained or were inadequate]; and 49 CFR 192.613(b) [pipeline segments were found in unsatisfactory condition, but there was no program to recondition or phase out the segments]. These violations were cited during a safety evaluation of Atmos' Mesquite system conducted between December 8, 2009 and March 25, 2010 (Safety Evaluation No. 200100703). Specifically, Atmos was found to be in violation of 49 CFR 192.13(c) for failing to properly enact emergency plan procedures during the investigation of the explosion at 2505 Catalina Drive in Mesquite, Texas, which occurred on November 20, 2009. Atmos not only failed to use all possible leak detection equipment and personnel at the incident site but also failed to investigate the cause of the explosion, detect gas concentrations, and create a Grade 1 leak for the explosion site until seventeen (17) days after the initial call. Violations of 49 CFR 192.603(b) were cited as a result of Atmos' repeated failure to maintain leak grading and leak monitoring data as exemplified in Leak Nos. 459302; 458826; 458825; and 458824 in which Atmos failed to indicate that bar testing was performed in each direction to 0% on the leak sketches. Lastly, although the steel service lines in the Mesquite system were found to be in unsatisfactory condition, there was no program to recondition or phase out the segments in violation of 49 CFR 192.613(b). Data submitted as part of the PS-95 leak report reveals that Atmos has a leak rate of over 64% for its steel services in all leaks repaired within the Mesquite system in the past year. This rate of leak detection indicates a potential safety hazard and the need for a program to recondition or phase out the steel service lines. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 AUSTIN, TEXAS 78711-2967 POST OFFICE Box 12967 AN EQUAL OPPORTUNITY EMPLOYER FAx: 512/463-6989 PHONE: 512/463-6762 http://www.rrc.state.tx.us June 1, 2010 Ms. Patti Richards - GUD 09981 Page Two Should this case go to hearing, Enforcement would be seeking an order for compliance and a penalty of not less than $190,000.00 (violation of 49 CFR 192.13 (c) at $10,000.00 per day for 17 days and violation of 49 CFR 192.603(b) at $20,000.00, with zero penalty requested for violation of 49 CFR 192.613(b)). However, if by or before July 5, 2010, Atmos brings the referenced violations into compliance - - including replacement of all steel service lines in the Mesquite system - - and pays a 95,000.00 penalty, Enforcement would be willing to settle the case and accept a fifty percent reduction of the penalty which would otherwise be requested at hearing. For your information, the penalty must be paid by check made payable to the Railroad Commission, reference GUD No. 09981 and be sent to the Railroad Commission, Attn: Enforcement at 1701 N. Congress Ave., P.O. Box 12967, Austin, Texas, 78711. Please be advised that if I do not receive the penalty and confirmation of compliance by no later than 5:00 p.m. on Monday, July 5th, this offer will be deemed to have been rejected and a formal Complaint will be filed. At such time, there will be no opportunity for further negotiations. If you have any questions, do not hesitate to contact me. Sincerely, Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Phone: (512) 936-2301 Railroad Commission 4/28/10 9:06 AM Page 1 of 1 Safety Division Docket Referral Docket Number: qq% I Inspection Package ID: 102051 Company: (6776)ATMOS ENERGY CORP., MID-TEX DIVISION Region Referral Date: 'I Attorney: Status and Status Date: XReferred to Legal: 1v ❑ Agreed Order: ❑ Legal Negotiating: ❑ PFD: ❑ Complaint Filed: ❑ Dismissal: ❑ Hearing: Comments: The operator did not follow emergency procedures after a natural gas related incident. Total Enhanced Penalty: $ 190,000.00 Penalty Amount Collected: Railroad Commission of Texav Pipeline Evaluation System 4/28/10 9:05 AM Page 2 of 4 Incident Report Incident ID: 494 Reportable to DOT? Yes NRC Number: unknown Release of hazardous liquid or carbon dioxide? No Red Border? Yes Estimated volume released: Release of gas or LNG? Yes Estimated property damage of $50, 000 or more? Yes Amount of property damage:$ 50,000.00 Emergency shutdown of LNG facility? No Polluted any stream, river, lake, reservoir, etc.? No Death or injury necessitating hospitalization? No Fatalities: Traffic rerouted? No Media interest? No Significant Events: Ignition? Yes Explosion? Yes Contact Type Pipeline Operator Injuries: Evacuation? No Company / Affiliation Name Atmos Energy Corp., Mid-Tex Division Elizabeth Delgato Phone Number 214-458-8238 Synopsis On Friday, November 20, 2009 at approximately 12:31 pm a house explosion occurred at 2505 Catalina Drive in Mesquite, Texas. There was one injury as a result of the incident. Subsequent investigation revealed that there was a leak on two compression couplings at the tap connecting the coated steel service lines to 2505 Catalina Drive and 2406 Luau Drive: Bar hole testing revealed gas migration from the leak area to the rear of the structure following the path of the customer yard line. No leaks were found on the customer yard line or house piping. The main supplying the tap is a two-inch coated steel line and is located in the alley behind the two residences. The service line supplying 2505 Catalina Dr. is a one-inch coated steel line. The natural gas distribution system is owned and operated by Atmos Energy. Investigation (Include a probable cause statement for incident/accident investigation) Refer to the attached PHMSA form. Emergency Response (Complete for incident/accident investigations) The initial emergency response on 11/20/09-by the operator was inadequate. Please refer to the attached PHMSA form and Alleged Violation Notes for"further detail. The subsequent actions taken by the operator on 12/8/09 and the days following appear to have been adequate. *Railroad Commission of Texa* Pipeline Evaluation System Incident Report 4/28/10 9:05 AM Incident ID: Date 04/20/2010 494 Comment Employee Carrie Smith CRS was asked to force close the 30 day report information so the letter could be sent out to the Operator. Updates Update Date 03/24/2010 Page 3 of 4 ' Update Note Employee Conrad Gonzales See incident detail. Wailroad Commission of Texas* Pipeline Evaluation System 4/28/10 9:05 AM Page 4 of 4 Incident Report Incident ID: 494 General Report is final? No Operator notified of excavation? No DOT Operator Identification Number: 31348 NRC Number (from Incident Detail): unknown Pipeline marked? 'No Origin of the Incident Cause: Other Incident Cause Operator reports still under investigation Failure Occured On: Joint HCA or USA? No Incident Occured On: Service Line Threads and fitting Material Involved: Steel Install Year: 1960 Impact of the Incident Volume of commodity released: Volume of commodity released (intential): 0 MCF Volume of commodity recovered: Inpatient hospitalization? No Deaths? No Company: Company: Public and non-operator costs: Cost of commodity unintentionally released: Cost of commodity intentionally released: Cost of repair: Cost of operator property damage: Cost of emergency response: Total property damage: 0 MCF 0 MCF ublic: 0 Public: $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 75,000.00 $ 0.00 $ 75,000.00 Incident Summary This incident occurred on the service tap on a steel service line. ATMOS considers this incident still under investigation; however, the Commission report is now final. Railroad Commission 4/28/10 9:06 AM Page 1 of 4 Safety Division Docket Referral: Violation List Inspection Package ID: Docket Number: 102051 Company: (6776)ATMOS ENERGY CORP., MID-TEX DIVISION Violation Code: 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 Notes Evaluation Violation Previous ID State Evaluation ID 20100703 Uncorrected Note Location The operator failed to properly.enact the emergency 2505 Catalina plan procedures. Drive Mesquite, TX. a.) 192.615 (a)(4) states,- "The availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency." The technician who investigated the Leak Investigation Order (LIO) about a possible explosion on Friday 11/20/09 at 2505 Catalina Dr., Mesquite, TX could not bar test due to wet soil conditions. The technician only had one type of leak detection equipment available at the incident site. The operator's technician should have used all the leak detection equipment and appropriate personnel available to further investigate the incident. b.) 192.615 (b) (3) states, "Review employee activities to determine whether the procedures were effectively followed in each emergency." An Atmos supervisor reviewed the LIO the following workday on Monday 11/23/09 and reviewed the note stating the incident was a possible CO explosion. However, on the LIO document it states that CO was not checked. This should be a red flag to the supervisor reviewing the LIO. No follow-up to the incident site occurred, even though bar testing had not been performed. Atmos received a letter from the homeowners insurance on 11/24/09 that the possible incident was natural gas related. Atmos responded on 11/24/09 to investigate the main and service line. A gas reading of 0.5% was detected at the service tap. No leak was graded at this time or a record of the bar testing results. During this check at least three additional leaks were Form PS-53 Railroad Commission 4/28/10 9:06 AM Page 2 of 4 Safety Division Docket Referral: Violation List Inspection Package ID: Docket Number: 102051 Company: (6776)ATMOS ENERGY CORP., MID-TEX DIVISION Violation Notes Evaluation Violation Previous ID State Evaluation ID Note Location found and graded. Atmos did not continue their investigation until December 7, 2010. The investigation was done in conjunction with the homeowners insurance representatives. Gas concentrations were detected and a Grade 1 leak was created for 2505 Catalina Dr. Mesquite, TX, seventeen days after the initial call. The emergency response to this incident is insufficient. Penalties Evaluation First Day of Days Out Of Penalty Enhanced Penalty Amount $ 170,000.00 ID Non-compliance Compliance Amount 20100703 11/20/2009 47 $q0i000.00 Enhancement Reason Impacted Residential/Public Area Violation Code: ^492-603-003 Records necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603(b) Violation Notes Evaluation ID Violation State 20100703 Uncorrected Previous Evaluation ID Note Location Leak No. 459302 2505 Catalina Dr., Mesquite, TX Leak No. 458826 2501 Catalina Dr., Mesquite, On the leak report, the leak sketch should indicate that bar testing was performed in each direction to 0%. The leak sketch shows the migration pattern but does not indicate that a 0% reading was obtained in each direction. This item has been an ongoing discussion with Atmos since 2009, regarding the improvement needed with leak grading and leak monitoring data. TX Leak No. Form PS-53 16 Railroad Commission 4/28/10 9:06 AM 9 Page 3 of 4 Safety Division Docket Referral: Violation List Inspection Package ID: Docket Number: 102051 Company: (6776)ATMOS ENERGY CORP., MID-TEX DIVISION Violation Notes Evaluation ID Violation State Previous Evaluation ID Note Location 458825 2402 Luau Dr., Mesquite, TX Leak No. 458824 3614 Palm Dr., Mesquite, TX Penalties Evaluation ID 20100703 Days Out Of Compliance First Day of Non-compliance Enhanced Penalty Amount Penalty Amount $ 20,000.00 Enhancement Reason Straight Penalty Not Per Day Rated Violation Code: 192-613-003 The listed pipeline segment(s) was found in unsatisfactory condition, but there was no program to recondition or phase out the segment(s). Requirement: 49 CFR 192.613(b) Violation Notes Evaluation ID Violation State 20100703 Uncorrected Previous Evaluation ID Location Mesquite Distribution System Note Atmos has experienced several incidents involving steel service lines over the past several years. These incidents have involved leaks from the steel service lines and their connections to the main or customer meter. Additionally data submitted as part of the PS-95 leak report reveals that Atmos has a leak rate of over 64% for their steel services in all leaks repaired within the Mesquite system in the past year, indicating a potential safety issue with these steel service lines and the need for a program to recondition or phase out these steel service lines. Enforcement requested to require the replacement of these steel service lines in Mesquite Railroad Commission 4/28/10 9:06 AM Page 4 of 4 Safety Division Docket Referral: Violation List Inspection Package ID: Docket Number: 102051 Company: (6776)ATMOS ENERGY CORP., MID-TEX DIVISION Penalties Evaluation ID 20100703 First Day of Non-compliance Days Out Of Compliance Penalty Amount Enhanced Penalty Amount $ 0.00 $ 0.00 Enhancement Reason Impacted Residential/Public Area Piltine Failure Investigation RArt Pipeline System: Medium Released: Investigation Responsibility: 11/20/09 Quantity: Unknown Natural Gas PHMSA Arrival Time & Date: Atmos Energy Corp., Mid-Tex Division Date of Occurrence: 2505 Catalina Drive, Mesquite, Texas Location: . Operator: Mesquite Total Damages $ N/A ® State ❑ PHMSA $75,000 ❑ NTSB Other Compaizy Reported Apparent Cause: ❑ Corrosion ❑ Excavation ❑ Natural Forces ❑ Incorrect Operation ❑ Other Outside Force Damage ❑ Material and/or Welds ❑ Equipment and Operations MOther Unknown-Still Under Investigation ❑ Yes No Yes ❑ No ❑ Yes No Explosion Yes ❑ No Evacuation Yes ❑ No Rupture Leak Fire Number of Persons 3 Area From residence 'arrative. Summary Short summary of the Incident/Accident which will give interested persons sufficient information to make them aware of the basic scenari facts. and On Friday, November 20, 2009 at approximately 12:31 pm a house explosion occurred at 2505 Catalina Drive in Mes uite, Texas. There was one injury as a result of the incident. Subsequent investigation revealed that there was a leak on ea h of the two compression couplings at the tap connecting the coated steel service lines to 2505 Catalina Drive and 2406 Lua Drive. Bar hole testing revealed gas migration from the leak area to the rear of the structure following the path of the customer yard line. No leaks were found on the customer yard line or house piping. The main supplying the tap is a twoinch coated steel line and is located in the alley behind the two residences. The service line supplying 2505 Catalina Dr. is a one-inch coated steel line. The natural gas distribution system is owned and operated by Atmos Energy. Region/State Principal Investigator: Date: Reviewed by: Region 6 Texas Title: A.lfred R. Garcia Jr. Date: March 1, 2010 1 Piline Failure Investigation R^rt ^Failure'Lo,cation &-Response-:, (Acquire Map) Location (City, Township, Range, County/Parish): Mesquite, Dallas County Address or M.P. on Pipeline: Type of Area (Rural, City): 2505 Catalina Drive City Date: Time of Failure: 11/20/09 Time Located: Time Detected: 1:00 pm on 12/7/09 How Located: Bar Testing of property NRC Report #: Unknown 1:00 pm on 12/7/09 Reported by: (Attach Report) Time Reported to NRC: NA NA NA Type of Pipeline: LNG Hazardous Liquid Gas Transmission Gas Distribution ❑ LP ❑ Interstate Gas ❑ Interstate Liquid ❑ Municipal ❑ Intrastate Gas ❑ Intrastate Liquid ❑ LNG Facility ® Public Utility ❑ Jurisdictional Gas Gathering ❑ Offshore Liquid ❑ ❑ Offshore Gas ❑ Jurisdictional Liquid Gathering ❑ Offshore Gas - High H2S ❑ COz Master Meter Pipeline Configuration (Regulator Station, Pump Station, Pipeline, etc.): A two-inch coated steel main with two one-inch coated steel service lines connected by a compression coupling at the tap. The main and service lines are located in the alley behind the residence and the meters sit at the rear property line. perator/OwnerInformation Owner: Atmos Energy Corp., Mid-Tex Division Operator: Atmos Energy Corp., Mid-Tex Division Address: P.O. Box 223705 Address: P.O. Box 223705 Dallas, Texas Dallas, Texas Company Official: Ms. Patti Richards Company Official: Ms. Patti Richards PhoneNo.: 214-206-2807 Phone No. 214-206-2807 Fax No.: 214-206-2126 Fax No. 214-206-2126 ® N/A Drug and Alcohol Testing Program Contacts Drug Program Contact & Phone: Alcohol Program Contact & Phone: Damages Product/Gas- Loss, or SpilltZ^ Unknown Estimated Property Damage $ $75,000 Amount Recovered N/A Associated Damages(3) $ Unknown Estimated Amount $ Unknown Description of Property Damage: 1 Photo documentation 2 Initial volume lost or spilled 3 Including cleanup cost 2 eline Failure Investigation Aort Damages The house at 2505 Catalina is a one-story brick veneer house on a slab foundation. The house is a total loss. Customers out of Service: ® Yes ❑ No Number: 1 Suppliers out of Service: ❑ Yes ® No Number: Fatalitiesand,Injuries Fatalities: ❑ Yes ® No Company: Contractor: Public: Injuries - Hospitalization: ❑ Yes ® No Company: Contractor: Public: Injuries - Non-Hospitalization: ® Yes ❑ No Company: Contractor: Public: Total Injuries (including Non-Hospitalization): Company: Contractor: Public: Job Function Name NA Public-Home Owner Kristi Samons -, +th. 1.. Yrs w/ Comp. Yrs. Exp. I Type of Injury Injuries did not require treatment NA N/A Drug/Alcoho't ,Tesfing 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 Results Job Function L ocat i on Test Date & Time 3 Pos Neg ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ Type o f Dru g ^ oline Failure Investigation Aort $ystern Description :!, Describe the Operator's System: Atmos records were reviewed to obtain information regarding the operation of the pipeline system. The natural gas distribution system is owned and operated by Atmos Energy Corporation. The Mesquite distribution system has a maximum allowable operating pressure (MAOP) of 60 p.s.i.g. at the measuring station designated as MS 4638 New Hope Station. The main supplying 2505 Catalina is a two-inch coated steel main and is located in the alley behind the residence. The original project number for the main installation is ER# 3558-60. Archived Lone Star Gas (now Atmos) records indicate the project was completed in December 1960. The service line supplying 2505 Catalina was installed in 7/25/61. The scope of work was to install nine feet of one-inch coated steel pipe. The service line supplying 2406 Luau St. was installed in 7/26/61. The scope of work was to install seventeen feet of oneinch coated steel pipe. Both service lines are supplied by the same tap and are connected with a compression coupling on each side of the tap. Pape Faalure Descr,iptaon inches, feet, miles): Length of Failure (inches, D N/^1 N/A Position (Top, Bottom, include position on pipe, 6 O'clock): Description of Failure (Corrosion Gouge, Seam Split): N/A Compression Coupling Gasket Laboratory Analysis: Performed by: ® Yes ❑ No Unified Investigations & Sciences, Inc. Preservation of Failed Section or Component: If Yes - Method: In Custody of., ❑ No ®Yes Atmos welded metal strapping from the one-inch service lines to the two-inch coated steel main to secure the failure section. Unified sealed and secured this section of pip in g. Unified Investigations & Sciences, Inc. 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. Componeht Failur.e Description Component Failed: 0 N/A Compression coupling Manufacturer: Normac Model: Unknown Pressure Rating: Unknown Size: 1" Other (Breakout Tank, Underground Storage): N/A Ripe:Data Material: Wall Thickness/SDR: Diameter (O.D.): Installation Date: SMYS: Manufacturer: Longitudinal Seam: Type of Coating: Pipe Specifications (API 5L, ASTM A53, etc.): 4 ^ N/A t' line Failure Investigation Aport A EIN/A. Joining Type: Welded tap and mechanical fitting Procedure: N/A NDT Method: N/A Inspected: ❑ Yes ® No ❑ N/'A Pressure, @ Time.of Failure @ Faalure Site : Elevation @ Failure Site: 530.81 ft. Pressure @ Failure Site: 20 psig Direction from Failure Site Pressure Readings @ Various Locations: Location/M.P./Station # Pressure (psig) MS 4638 New Hope Station 20 psig Elevation (ft msl) Upstream Downstream "^ N/A pstream: ump:SYation_ Data<< 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: N/A Upstream Compressor Station Data Specific Gravity: Flow Rate: Pressure @ Time of Failure (4) Distance to Failure Site: High Pressure Set Point: Low Pressure Set Point: ❑ N%A. Operoting.Pressure Determination of MAOP: Pressure Test Max. Allowable Operating Pressure: 60 p.s.i.g. Actual Operating Pressure: 20 p.s.i.g. at MS 4638 Method of Over Pressure Protection: Relief Valve ® Yes Capacity Adequate? Relief Valve Set Point: 62 p.s.i.g. ❑ No ❑ N/A ° IritegrityTestAfter FailurePressure Test Conducted in place? (Conducted on Failed Components or Associated Piping): ❑ Yes If NO, Tested after removal? 4 Obtain event logs and pressure recording charts 5 ❑ No ® Yes ❑ No P#line Failure Investigation Rport ❑ N/A ' Integrity TestAfter.F'a"ilure Method: Pressure tested for flow rate on isolated failed section. Describe any failures during the test. At the site of the incident, the leak area was isolated and capped to perform a pressure test with cover of soil in place. The isolated piping was pressurized with 20 psig of compressed air. Time was measured in seconds for a pressure loss of 5 psig. The test was performed three times. The first pressure test dropped 5 psig in 10 seconds. The second pressure test dropped 5 psig in 13 seconds and the third pressure test dropped 5 psig in 12 seconds. The isolated section consisted of 29'-1l" of two-inch coated steel main, 14'-3" of one-inch steel service to 2406 Luau, and 4'-6" of one-inch steel service to 2505 Catalina. Once the section of isolated piping was exposed 20 psig of compressed air was applied once again and a liquid soap test revealed that both compression couplings were leaking by the presence of bubbles. ❑ .N/A Soil'/^water°Conditions@Fa'ilure,Site : Condition of and Type of Soil around Failure Site (Color, Wet, Dry, Frost Depth): Type of Backfill (Size and Description): Saturated clay soil Clay soil Type of Water (Salt, Brackish): N/A Water Analysis ❑ Yes Rr jVa ❑ ,Q^. External Pipeor=.C`o'monent Examination External Corrosion? ❑ Yes None Coating Condition (Disbonded, Non-existent): Coating was good and intact ® No Description of Corrosion: None Description of Failure Surface (Gouges, Arc Burns, Wrinkle Bends, Cracks, Stress Cracks, Chevrons, Fracture Mode, Point of Origin): The gaskets of each compression coupling were examined and each gasket had either a crimp in the gasket material or the gasket material appeared to be deteriorating. Above Ground: ❑ Yes Buried: ® No Soil Resistivity: Unknown ❑ No Depth of Cover: 48 inches Stress Inducing Factors: N/A P/S (Surface): -1.18 v. ® Yes Caflaodic_^Frotection, P/S (Interface): N/A ' ❑ EN/A', Date of Installation: Unknown. pH: Unknown Method of Protection: Anode No ❑ Yes Did the Operator have knowledge of Corrosion before the Incident? Pig, Annual Survey, Rectifier Readings, ECDA, etc): No Corrosion How Discovered? (Close Interval Survey, Instrumented 5 Attach copy of water analysis report 6 P^ eline Failure Investigation Riport :Internal-Pip.e-.or^^'Component Examination' Internal Corrosion: ❑ Yes Injected Inhibitors: ❑ Yes ❑ No Testing: ❑ Yes Type of Inhibitors: Z N/A ❑ No ❑ No Results (Coupon Test, Corrosion Resistance Probe): Description of Failure Surface (MIC, Pitting, Wall Thinning, Chevrons, Fracture Mode, Point of Origin): Cleaning Pig Program: ❑ Yes Gas and/or Liquid Analysis: ❑ Yes ❑ No ❑ No Results of Gas and/or Liquid Analysis Internal Inspection Survey: ❑ Yes Results ❑ No Did the Operator have knowledge of Corrosion before the Incident? ❑ Yes ❑ No How Discovered? ( Instrumented Pig, Coupon Testing, ICDA, etc.): N/A : : Outside,Force D'anzage. Telephone No.: Responsible Party: Address: Work Being Performed: Equipment Involved: Called One Call System? One Call Name: One Call Report # Notice Date: Time: Response Date: Time: Details of Response: There are no other buried utilities in the alley behind 2505 Catalina Drive. 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 ❑ Yes ❑ No Moline Failure Investigation Rort utside Fo> ce,Damage ^ Was Location Marked According to Procedures? ❑ Yes Z N/A ❑ No Pipeline Marking Type: (') Location: State Law Damage Prevention Program Followed? ❑ Yes ❑ No Notice Required: ❑ Yes Response Required: ❑ Yes ❑ No Was Operator Member of State One Call? ❑ Yes ❑ No State Law Was Operator on Site? ❑ Yes ❑ No ❑ No ❑ No Did a deficiency in the Public Awareness Program contribute to the accident? ❑ Yes ❑ No Is OSHA Notification Required? ❑ Yes ❑ No ® NIA Natural Forces Description (Earthquake, Tornado, Flooding, Erosion): sFailure Isolation :. ❑ N/,A: Squeeze Off/Stopple Location and Method: Installed Stopple Fittings upstream and downstream of failed section and eliminated leak at 1:52 pm on 12/9/09. Valve Closed - Upstream: I.D.: Time: M.P.: Valve Closed - Downstream: I.D.: Time: M.P.: Manual Pipeline Shutdown Method: ❑ Automatic ❑ SCADA ❑ Controller ❑ ESD Failed Section Bypassed or Isolated: Failed section was isolated with stopple fittings but a bypass was installed prior for customers downstream. Valve Spacing: N/A Performed By: Stopple'Fittings ❑ NIA 'Odorization Gas Odorized: ® Yes Concentration of Odorant (Post Incident at Failure Site): ❑ No Method of Determination: ® Yes % LEL: ❑ Yes ❑ No 8 ❑ No % Gas In Air: ❑ Yes ❑ No *line Failure Investigation loort ❑ N/A Odorizafion, Odor Concentration Test Time Taken: ❑ Yes Was Odorizer Working Prior to the Incident? Type of Odorizer (Wick, By-Pass): Injection ® Yes ❑ No ❑ No Type of Odorant: Scentinel-0-10, BP Captan Odorant Manufacturer: YZ Odorizers Model: unknown Monitoring Interval (Weekly): Yearly Amount Injected: see below Odorization History (Leaks Complaints, Low Odorant Levels, Monitoring Locations, Distances from Failure Site): An odor concentration test was not conducted by Atmos on the day of the incident 11/20/09. Since investigation by the Commission was 18 days post incident, an odor concentration test was not performed. The test is irrelevant due to the time that had passed. The Mesquite distribution system receives odorized gas from four different locations. Atmos records were reviewed for the most recent injection record at each location prior to the incident date. (594) Hunt Fairway Pit. @ Poynor last injection rate of 0.998 lbs/MMcf on 10/30/09 (573) DE at Tri-Cities CR 1205 last injection rate of 0.750 lbs/MMcf on 9/3/09 (608) Enbridge Eustace Pit. FM 198 last injection rate of 1.013 lbs/MMcf on 10/30/09 (709) S2GC to S2G @ Poynor last injection rate of 0.880 lbs/MMcf on 0/30/09 (BP Captan) YT'eather:Condations Temperature: 59 degrees at 12:25pm Wind (Direction & Speed): South at 7mph Climate (Snow, Rain): Overcast Humidity: 94% Was Incident preceded by a rapid weather change? ❑ Yes ❑ N/A ® No Weather Conditions Prior to Incident (Cloud Cover, Ceiling Heights, Snow, Rain, Fog): The Mesquite area received 1.98 inches of rainfall on 11/20/09. (http://www.mesquitewx.com/wxraindetail.i)hp?year=2009 ) as 1Vligr.ation S'urvey: Bar Hole Test of Area: ® Yes ❑ N/A Equipment Used: Sensit Gold, Gas Trak III, RMLD, truck mounted units ❑ No Method of Survey (Foundations, Curbs, Manholes, Driveways, Mains, Services) (9) Leak surveys were performed over the main and services of mapsheet 131. Bar testing was performed at 2505 Catalina-Drive. Atmos retained records of all bar test data post incident. On 11/20/09 the Atmos technician that responded to the call about a possible explosion at 2505 Catalina Dr., stated bar testing could not be completed due to wet soil conditions. The Atmos technician tested the house piping and found no leaks. The sewer vent was also checked and no gas was detected. The Atmos technician used a Sensit Gold to survey aboveground and no gas was detected. The Atmos Technician stated the Mesquite Fire Department identified CO (Carbon Monoxide) as a possible cause of the explosion. 9 Plot on site description page 9 (1) PJline Failure Investigation Rort ❑ N/A as 1VligratioriSurvey On 11/24/09 Atmos personnel returned to bar test the main and service supplying 2505 Catalina. There was no access to the customer property. The technician detected a 0.5% sustained gas reading at the service tap in the alley. No record of the survey or bar tests results were kept. However, there were four leaks found during the monitoring performed on this date. On 12/7/09 Atmos personnel and the homeowners insurance investigators met to perform additional testing at 2505 Catalina. Bar hole testing was performed from the service tap to the inlet of the meter. Additionally, bar testing was performed following the path of the customer yard line to the point where the line enters the residence near the bathroom. The bar testing was performed at one-foot intervals. Gas concentrations ranging from 0% to 0.5% were detected. 16% gas was detected in an area under the bathtub. On 12/8/09 Atmos personnel and Railroad Commission investigators met to perform similar bar hole testing as had been performed on 12/7/09. Gas concentrations were detected along the same path following the customer yard line and around tree roots in the back yard. Refer to bar test data for exact readings. Note that very wet soil conditions existed during the bar testing on 12/8/09. nviroutnent Sensztavity Impac, 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 ❑ No ❑ N/A lass Location1High Consequence.Arn Class Location: 1 ❑ 2 ❑ 3® 4 Determination: Residential Distribution Odorization Required? ❑ No ® Yes HCA Area? Determination: ❑ Yes ❑ No ® N/A ❑ N/A ❑ N/A Pressure Test`Hrstory (Fxpand Last as Necessary) Installation (1) Req'd (10)Assessment Deadline Date Test Date Test Medium N/A Unk. Unk. Pressure (psig) Unk. Duration (hrs) ^o SMYS % Unk. N/A Next Next Most Recent Describe any problems experienced during the pressure tests. No archived records could be found on the pressure test data for the main and service lines. The main and service lines were installed prior to applicable code. - terria'l Line:Inspectioyr/Other Assessment Histo Expand>Zzstas Necessary) 10 Aline Failure Investigation R*rt ^ ... N/A Internal Linelnspeation/O&erAssessment History (F:.;Pand:ListasNecessary) Assessment Req'd Deadline Date Assessment Date Type of ILI Tool {^ ^t Indicated Anomaly If yes, describe below Other Assessment Method (12) 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. re..Failure_Conditions.and Aati'onff ^^ ❑ 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 ® No ❑ N/A ❑ Yes remediation schedule? Describe below or on attachment. Prior to the failure, had the operator performed the required (10) actions to address the threats that are now known to be related to ® No ❑ N/A ❑ Yes the cause of this failure? 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. Atmos has experienced several failures within the last three year time period on steel service lines. Leak repair data and leak survey data collected by Atmos indicate a large percentage of leaks that have occurred on steel service lines and their connections to mains and/or meter installations. Atmos had conducted a specialized leakage survey in some of the potentially high risk areas in the summer of 2009; however, this area appears to have been overlooked as meeting the survey criteria during the survey. Caps &:Records Are Maps and Records Current? (13) ® Yes ❑ -N/A ❑ No Comments: 2505 Catalina Dr. is located on mapsheet 131 in the Mesquite distribution system. .Ledk:Survey H'istory Leak Survey History (Trend Analysis, Leak Plots): 11 MFL, geometry; crack, etc. 12 ECDA, ICbA, SCCDA, " other technology," etc. 13 Obtain copies of maps and records 11 ❑ N/A Pioline Failure Investigation R*1 it xak,..Sur;:vey Flistor Pipe Type Units Services Type Job Number Garth, LeRoy CS 35482 680 LSA 482770 10/01/07 Garth, LeRoy P2. 158 2 LSA 482770 10/01/07 Garth, LeRoy CS 35482 680 LSA 339383 11/15/04 Garth, LeRoy P2 158 2 LSA 339383 T 11/15/04 Inspector Date Completed The last leak survey was performed on 10/01/07 for the coated steel (CS) main and services on mapsheet 131. RRC personnel requested that Atmos perform a special leak survey of the entire mapsheet 131 on 12/10/09. The special leak survey started 12/10/09 and concluded on 12/11/09. Twenty-four additional leaks were identified on this special survey. The leaks were graded according to Atmos leak grading procedures. Atmos personnel performed additional leak surveys of mapsheet 131 on 1/11/10, 1/12/10, and 1/13/10. Thirty-two additional leaks were identified on this special survey. The leaks were graded according to Atmos leak grading procedures. A special summer leak survey of mapsheet 131 was conducted ending on 7/29/09. In this survey only a portion of mapsheet 131 was covered. 9,860 feet of CS main and 277 service lines were surveyed compared to the 35,482 feet of CS main and 680 service lines on the entire mapsheet 131. Eighteen leaks were identified on this special summer leak survey. The leaks were graded according to Atmos leak grading procedures. The main and service line supplying 2505 Catalina was not included in this special summer leak survey. ❑ Papeline Opexataon.History Description (Repair or Leak Reports, Exposed Pipe Reports): Atmos records were reviewed for unrepaired leaks, and there were no open leaks found for 2505 Catalina or 2406 Luau. Repaired leaks were also reviewed, and there have been no previous repairs made at 2505 Catalina or 2406 Luau. The piping appears to be from initial installation. Did a Safety Related Condition Exist Prior to Failure? ❑ Yes ® No Reported? ❑ Yes ❑ No Unaccounted For Gas: The Mesquite system is included in the metro lug. The lost and unaccounted for calculation was 3.01 % for the 12-month June 2009 ending period. Over & Short/Line Balance (24 hr., Weekly, Monthly/Trend): N/A O „erator/Gontr^ctor Err Name: Job Function: Title: Years of Experience: Training (Type of Training, Background): Was the person "Operator Qualified" as applicable to a precursor abnormal operating condition? 12 ❑ Yes ❑ No ❑ N/A kline Failure Investigation Foort Qperator/Contractor,,Err-or Was qualified individual suspended from performing covered task ❑ Yes ® lV/A _ ^ ❑ No ❑ N/A Type of Error (Inadvertent Operation of a Valve): Procedures that are required: Actions that were taken: Pre-Job Meeting ( Construction, Maintenance, Blow Down, Purging, Isolation): Prevention of Accidental Ignition (Tag & Lock Out, Hot Weld Permit): Procedures conducted for Accidental Ignition: 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): Training Procedures: Operation Procedures: Contro l ler Activities: Name Years Experience Title Alarm Parameters: High/Low Pressure Shutdown: Flow Rate: Procedures for Clearing Alarms: Type of Alarm: Company Response Procedures for Abnormal Operations: Over/Short Line Balance Procedures: Frequency of Over/Short Line Balance: Additional Actions: 13 Hours on Duty Prior to Failure Shift Pi eline Failure Investigation R0rt lddzfzoriarActions T'aken by the 0perator, ,CTN/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): On 12/7/09 Atmos took two gas samples from 2505 Catalina. One gas sample was taken from the ground and the other gas sample was taken from the bathtub area. Armstrong Forensic Laboratory, Inc. tested the gas samples and both samples contained pipeline natural gas. Atmos continues to work in mapsheet 131 of the Mesquite distriution system to repair the leaks found on the postincident leak surveys. Atmos has also decided to replace each steel service line in mapsheet 131 as part of a risk-based assessment. 14 *line Failure Investigation Rwrt :Photo Documentation ,1^'^ 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. I nPCr.rintinn Photo No. Refer to photo pages 31 2 32 3 33 4 34 5 35 6 36 7 37 8 38 9 39 10 40 11 41 12 42 13 43 14 44 15 45 16 46 17 47 18 48 19 49 20 50 21 51 22 52 23 53 24 54 25 55 26 56 27 57 28 58 29 59 30 60 Camera Type: 15 DPCr.rintinn *line Failure Investigation Aort A7lditionallnformation S`our.ces Agency Title Name Police: Fire Dept.: Mesquite Fire Department Report (retained copy from Atmos) State Fire Marshall: State Agency: NTSB: EPA: FBI: ATF: OSHA: Insurance Co.: FRA: MMS: Television: Newspaper: Other: 16 . Phone Number Pioine Failure Investigation Rort Persons: lntervierved Name Title John Springfield Atmos-Operations Supervisor Elizabeth Delgado Atmos-Operations Supervisor 17 Phone Number Poline Failure Investigation R*rt _... - , , EentLog ^ :. Sequence of events prior, during, and after the incident by time. (Consider the events of all parties involved in the incident, Fire Department and Police reports, Operator Logs and other government agencies.) Event Time / Date 12:31pm / 11-20-09 Mesquite Fire Department receives an emergency call about possible house explosion at 2505 Catalina. 12:42pm / 11-20-09 Atmos Emergency Call Center receives call about possible fire and explosion at 2505 Catalina. 12:44pm / 11-20-09 Atmos dispatches Leak Investigation Order (LIO)#8007574831 to local service technician. 12:55pm / 11-20-09 Atmos service technician en-route to incident site. 1:04pm / 11-20-09 Atmos service technician arrives on-site and begins to perform leak check. The technician could not bar test due to wet soil conditions. LIO remarks state "no gas detected press test good sewer and survey good Capt Williams from FD said poss CO explosion." 2:37pm / 11-20-09 LIO is closed and Atmos technician departs the scene. 11-23-09 Atmos Supervision reviews and closes LIO#8007574831. 11-24-09 Atmos receives a letter from homeowners insurance, which requests Atmos to further investigate the incident. The insurance company believes natural gas may be cause of the explosion. 11-24-09 Atmos sends a technician to 2505 Catalina to bar test main and service line. A 0.5% sustained gas reading is detected at the service tap to the residence. There was no access to the property. 12-7-09 Atmos personnel and homeowners insurance investigators arrive at 2505 Catalina to perform additional testing. Gas concentrations are detected at the tap with gas migration following the customer yard line. 16% sustained gas reading was noted around the bath tub area. Gas samples were taken from the area around the bath tub and one in the soil. 12-8-09 Atmos reports incident to Railroad Commission of Texas (RRC) emergency line. 12-8-09 RRC investigators arrive and perform bar testing of main and service, as well as yard line to 2505 Catalina. Gas concentrations are detected at the tap with gas migration following the customer yard line. The soil conditions were very wet. 12-8-09 Atmos begins to excavate to isolate the service tap to 2505 Catalina. A bypass is installed to ensure service to downstream customers before the section is isolated. 12-9-09 Isolation of the leak area complete by using stopple fittings. 12-9-09 Atmos caps isolated section of piping and conducts a flow rate test with cover of soil in place. 12-10-09 Atmos continues to excavate the isolated section of piping to reveal the service tap. Once excavation was complete, the isolated section of piping was pressurized and a leak soap test was performed. The presence of a leak was noted on each compression coupling at the tap of the isolated section. 12-10-09 Atmos secures the isolated section of piping with metal strapping and Unified Investigation Services preserves the specimen. 12-10-09 & 12-11-09 Atmos performs a leak survey of the entire mapsheet 131 in the Mesquite distribution system. •Twenty-four additional leaks are found and graded according to Atmos leak grading procedures. 1-11-10 thru 1-13-10 Atmos performs a second leak survey of the entire mapsheet 131 in the Mesquite distribution system. An additional thirty-two leaks are found and graded according to Atmos leak grading procedures. 2-5-10 Atmos and RRC personnel as well as homeowners representatives test the secured isolation piping section at Unified Investigation Services facility. X-rays as well as physical examination of the piping and compression couplings was performed. Physical examination revealed Normac as the manufacturer of the two compression couplings. Physical examination also revealed either a crimp or deterioration of the gasket material. X-rays revealed misalignment of the piping in the coupling connecting 2505 Catalina. 18 Aline Failure Investigation Rport Event.Log Sequence of events prior, during, and after the incident by time. (Consider the events of all parties involved in the incident, Fire Department and Police reports, Operator Logs and other government agencies.) Investigatzon Contact Log ' Time Date Description Name 19 Aline Failure Investigation Rporf Investigataon;^Conta"ct Log Time Date Description Name Fazlure Investigataon,Documentataon L og Operator; Atmos Energy Appendix Unit #: CPF #: Documentation Descri ption Number Note: Operator records are reviewed and used to complete the report but are not retained. FOIA applies to federal agencies. A Photo Pages B Atmos Leak Investigation Order(LIO) dated 11/20/09 C Atmos Leak report number 459302 dated 12/7/09 D Atmos 30-day report E Mesquite Fire Department Report (first page) F Unified Investigation Services testing protocol dated 2/5/10 G Bar test data field notes dated 12/8/09 20 Date: FOIA Date Received Yes No *line Failure Investigation Aort Fatlure7nvestigation Documenlation Lo.g: Operator: Atmos Energy Appendix Unit #: Date: CPF #: FOIA Date Documentation Description Number Received Yes No Site Description, Provide 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. Photos should be taken from all angles with each photo documented. Additional areas may be needed in any area of this guideline. 2,SU`^ C^ e^tNR bc.^ •4^5k ^.^•}x. • t• t .4 ^ 5 `, s•`. .A USG6k -S"nS:k $t.^lc-^'^ r ., . ^ 4 ^• {, ti Y . • IILy MMoS^rSonn..1 i2(3l 6^ Nos. -1-o SLOtl-.E EVAL #: 2010 - 0703 COMPANY NAME: Atmos Energy l DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2406 Luau Drive, Mesquite, TX DESCRIPTION: Photo depicts the compression coupling nut and gasket. Photo shows crimp in gasket material. DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2406 Luau Drive, Mesquite, TX DESCRIPTION: Photo indicates the deterioration of gasket material. DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2406 Luau Drive, Mesquite, TX DESCRIPTION: Compression nut identifying Normac as manufacturer of the coupling. nified Intic,tigatiun.^ S Sricnccs, Inc. TrS'r PRoTOC:c)I., Loss Location: 2505.Catalina Mesquite, TX 75150 Date of Loss: November 20, 2009 Testing at: Unified Investigations & Sciences, Inc. 1700 Tech Centre Parkway Suite 110 Arlington, TX 76014 Date of Test: February 5, 2010 Listed below are the steps to be completed in examining the retained section of gas piping taken from the alley behind the Samons home. This protocol does not include any flow testing per agreement of the parties present at the initial inspection attempt on January 21, 2010. Ample opportunity will be provided for documenting and photographing the evidence during all testing, and theretore is not listed in the protocol steps below. Progression from each step to the next will be per agreement of all parties present. 1. Take X-ray images of the couplings and any other areas of interest on the piping. (This will be performed in the large parking area behind the building for safety reasons.) 2. Cut the wrap from the pipe couplings with a Dremel tool and attempt to identify their manufacturer(s). (This may involve some wire brushing to clean up the surfaces containing identification.) 3. Remove the braces welded to the piping by cutting with a gas torch. 4. Disassemble the couplings for inspection of their seals. 5. Any other testing as agreed to by the parties present. I700•Gxh Cenu•c I'akwav. Stdtc 110 • Arlinelon. Tocas?S,lll•1-.Id(li . 214'I46-S489 - Iar 21.1 '1•I6-`iS6 S Mesquito Fire Department Incident Report 2009-0014093 -000 Basic Alarm Date aud Time Arrival Time Controlled Date and Time Last Unit Cleared Date and Time Response Time Priority Response Completed Reviewed Release to Public Fire Department Station Shift Incident Type Aid Given or Received Action'I'aken 1 Apparatus - Suppression 12:31:48 12:36:07 Friday, November 20, 2009 14:40:47 Friday, November 20, 2009 0:04:19 Yes Yes Yes Yes ST3 A 240 - Explosion (no lire), other N - None 80 - Information, investigation & cnforeentent, other 7 Apparatus - Other Personnel - Suppression Personnel Pcrsonnel- Other Proporty Loss Contents Loss Property Value Contents Value Property Use 18 $30,000.00 $5,000.00 $50,500.00 $15,000.00 419 - I or 2 family dwelling Location Type Address Address City, State Zip 2505 CATALINA DR N1ESQUITE, TX 75150 District 303 Directions Latitude Longitude 2505 CATALINA DR 2537153.0 6978793.00 Apparatus ID Apparatus Dispatch Date and Time fn route to scene date and time Apparatus Clear Date and Time Apparatus priority response Apparattts cancelled nfter dispatch C05 12:32:29 12:34:21 12:40:36 Yes Yes Number of People Apparatus Use 2 Apparatus Action Taken 1 Apparatus Type 93 - Cancelled en route 92 - Chiefofficer car Personnel I 9094 - Greenman,'l-ravis Position: DRVPARA Personnel 2 5303 - Nutyra, Richard J Apparatus - C05 Friday, November 20, 2009 Friday, November 20, 2009 Friday, November 20, 2009 I'osition: DC Apparatas- EMSOZ Page: I Printed: 02i2312010 09:13:49 I I Leah Number: '1'nwn: 'LEAK REPORT 459302 h4esquite ,ldttress: 1.10 N: 2515 C'atalimtDr Date fnunrl: 12/7/2009 1'echuiei:m: Cortoi, Jonquin Prnhnhle Satrce: (:as Detected: CGI'fcst: \lrlcr t:: 4 Time Grnrlcd: 4:30 pm Service Assistnncc ReyucstcQ: 4:35 pnt Assistancc Arriverl: 4:40 ptn CunJitinn lilimtnateJ: 3:20 pm Soil 16 5118316 plapsheet: 131 Oar Tested each direction to 0% \7apscn: 49C Perimeter of uiigration pattern shown on sketch Soil Sru•race Over illain: Concrete liusiness Uistrict: No Oug up inlet riser: No Conletl Steel No ko Sw•i'ace Over I..eak1 (:Inss4l.ocaliun: Prubnhle Pipe Type: t Gratle: I 0 0 ^-9 0 t7' 09 ? -' i Temporary Rcpair'Ivpe; a°, 01. Tr „-....... ^^ Temp Repuir Utnr: hat: I'ransartion llnle: Lonp.: Cross Itefrence N: Caunty: DALI,AS Line Lucate N: Lcnk Itepaircd On: Type: Service Compression Coupling Material: Coaled Steel None Iratcrnnl Cnuting: Good `['bWK\ Nfin Pit Ilepth: Pipe Size: 1.00 C:ausr nr Leak: 5-/k6-v 2060 0 Rtallis. Josh C.CI Test % Gns: Ccl'rest'rech: Inlernnl Carrosian: No '1'echnicinn: Redmon, Patd Gusket / G-rings Snnp'1'est: Pass - Sanp'I'esI T'ech: \Innnfnctm•er; Compression Coupling informtlion : Alnrlet/Stplc: Snil'fypc: bkll:-) Aliu Lengtlr of 1'il: I.P. I-GO PSIG Stntiun Plus: Nollc IiPC: Pipe squcuerh I'rc.ssurc: Ezlermd C:m•rosion: lislcrnnl I'its: Unknnn•n '1'ypc: scrm No Pullout: clay NO Separnted: Pulley. Rohcft Odm'ant Detected: Yes Itepu i r Stnl ns: 1'ermanent '1'emp Rcpair'1)pe: No Temp Repnir'I'ech: ,lnuticlnstallcd Main #: \YI.: Test Statiun: No Anode 1nsL•rlled Sm'ricc P: N\'t: Test Slatinn: No ,lnndc Instnlled'1'cchnician: Recinton. Peul Test Station Stalinn Plus: Pipe losuil .Nlntn: -I,IS Pipe In suil tiervice: 1'ipc to soil'I'cchnieian: Left: -1,1R N!A Rrclifirtl: Left: N/:1 Itcctilied: Ih•cssurc Test of; $ervice 'lest \tcrlium: Air Test 1'ressnre: 120 Test Duration: 0 Top: \\1di'I'hirt:nrss Top: Side: Side. Specificd: il lartnllad 1'ipe infu I^ Siee: Replacet whpi.atmoun.crg}.cont:7777/pls/k3LUEl'RIN'I'/blueprint.litm]_so?RiJ=80&l-]ost... 1/7/2010 I • is Page 2 of 2 Show Advanicx Order Dctails Mid Texas Division - Show Advantex Order Details Business: MdTx - pl3an80 Customer: 1698491 Order 8007574831 Job FIRE Status: C Number: Code: Premise: 1374533 (1) Name: KRISTI SAMONS Address: 2505 CATALINA D R, MESQUITE,.TX, 75150-3428 Job Service Type: Pigs and Du ps: gU=80 Hos1=8007574831 SO=FIRE Created=11/20/2009 12:42:50 1st Dispatch: 11/20/2009 12:44:02 Num 0 Suspended: Num 1 Dispatched: Run Time: 01107/2010 0 0:49 ^ Display Nornlal Display ALL Last Time: 11/20/2009 12:55:29 Calculated: 12:55 1st Time Date: 11/20/2009 13:04:13 Calculated: 13:04 Occurrences: 1 Occurrences: 1 Total Time: 9 Total Time: 93 -^-^. Time Stamps Get More Activity Detail User ID Action Time Stamp KHUGHES CREATED DISPATCH ENROUTE ONSITE CLOSED 11/20/2009 12:42:50 11/20/2009 12:44:02 11/20/200912:55:29 11/20/2009 13:04:13 11/20/2009 14:37:30 14915 14915 14915 14915 Time Lapse 1 Min 11 Min 9Min 93 Min Time Zone Harvest Date Central Central Central Central 11/211200903:56:14 11/21/200903:38:28 11/21/200903:38:28 11/21/200903:38:28 11/21/2009 03:38:28 http:/ldfiv1 a=hpi.atmosenergy.eon1:7777/pls,/BLUI:PRiNT/blueprint.htni]_so?BiJ=S(kCHost... 1/7/2010 I PWTMOS energy. Marc Chapman Director Regulatory & Compliance January 7, 2010 Ms. Mary McDaniel, P.E. Director, Safety Division Railroad Commission of Texas Post Office Box 12967 Austin, Texas 78711 RE: November 20, 2009, Incident at 2505 Catalina Dr. Mesquite Please find enclosed for filing with the Railroad Commission an incident report which contains preliminaty information in Atmos Energy's continuing investigation of the referenced incident. We will provide this office with additional information once our investigation is complete. If there are any questions concerning this matter, please do not hesitate to contact me. Yours truly, Marc Chapman Attaclunent Ahnos Energy Corporation 5420 LBJ Freeway, Suite 1800, Dallas, TX 75240 P 214-206-2875 F 214-206-2132 marcus.chapmtm c,i?atmosener.-y.com NOTICE: This report is required by 49 CFR Part 191. Failure to report can result in a civil penalty not to exceed $100,000 for each violation Form Approved for each day the violation continues up to a maximum of $1,oD0,o0D for any related series of violations as provided in 49 USC 60122. OMB No. 2137-0522 ow U.S. DEPARTMENT OF TRANSPORTATION INCIDENT REPORT - GAS DISTRIBUTION SYSTEM PIPELINE AND HA7ARDOUS MATERIALS SAFETY ADMINISTRATION INSTFtIJ'G7'I, Important; Please read the separate instructions for completing this form before you begin. They clarify the information requested and provide specific examples. If you do not have a copy of the instructions, you can obtain one from the Office Of Pipeline Safety Web Page at http.//ops. dot pov. .^.,--' ❑ Supplemental Report Check one: Original Report [?AR_teA;^,GENEFtAL 1. Operator Name and Address 31348 a. Operator's 5-digit Identification Number (if known) b. If Operator does not own the pipeline, enter Owner's 5-digit Identification Number (if known) c. Name of operator Atmos Energy Corp., Mid-Tex Division 5420 LBJ Freeway, Suite 1800 d. Operator street address Dallas, Dallas, Texas 75240 e. Operator address ❑ Final Report City, County or Pattsh, State and Zip Code ............ . . . . . . . . . . . . . . . . . . . : . . . ......................... . . . . . . . . . . . ........... . . . . . . . . . . ........ . ..................................................... . ............ .... ............................... 11 ............... . ............. . ........................ . . . . . . ................. 5. Consequences (check and complete all that apply) Time and date of the incident 12:42 P.M. 11 month hr. 2009 year 20 day City and County or Parish Employees: Non-employee Contractors: a QX Property damage/loss (estimated) Total $ Latitude: 32.799524 Longitude -96.649197 Gas loss $ f. Class location description 0 Class 1 0 Class 2® Class 3 Incident on Federal Land 0 Yes 0 Class 4 ® No Type of leak or rupture ❑ Leak: 0 Pinhole Q Connection Failure (complete sec. F5) 0 Puncture, diameter or cross section (inches) ❑ Rupture (if applicable): Q Circumferentlal - Separation (p Longitudinal - Tear I Crack, length (inches) - Propagation Length, total, both sides (feet) Q N/A ® Other: 75,000 Operator Damage $ Public/private property damage (if not available, see instructions for how to provide specific location) e, General Pubtic: TX 75150 State and Zip Code d. Total number of people: Non-employee Contractors: b. ❑ Injury requiring inpatient hospitalization Total number of people: Employees: General Public: Location of incident a. 2505 Catalina Dr Street or nearest street or road b. Mesquite, Dallas c. a. ❑ Fatality 75,000 $ d. ❑ Gas ignited 0 Explosion e. [Z Gas did not ignite ® Explosion f. ❑ Evacuation (general public only) 0 No Explosion Q No Explosion people Evacuation Reason: Q Unknown Q Emergency worker or public official ordered, precautionary Q Threat to the public Q Company policy 6. Elapsed time until area was made safe: 47 hr. 22 min, 7. Telephone Report NRC Report Number 8 day 12 month 2009 year 8 a. Estimated pressure at point and time of incident: 20 PSIG b. Max. allowable operating pressure (MAOP): c. MAOP established by: 0 Test Pressure 3 49 CFR § 192.619(a)(3) PAF 55 PSIG psig ;^;"?R:gPAI2ERAND?'QUTHORfZED';SIGNt4TlJ(tEM` Mike Archer 214-206-2879 Area Code and Telephone Number Compliance Analyst (type or print) Preparer's Name and Title michael.archer(d-)atmoseneray.com 214-206-2132 Area Code and Facsimile Number Preparer's E-mail Address Marcus Chapman Director Regulatory & Compliance (type or print) Name and TiUe Form PHMSA F 7100.1 ( 03-04) 6ate Reproduction of th.is form is per»aitted 214-206-2875 Area Code and Telephone Number Page 1 of 3 p16RIMc^.oR^^tN=rv:.r.; 1. 3. Material involved (pipe, fitting, orothercomponent) Incident occurred on O Main O Service Line 0 Meter Set 0 Steel Q CastNVrought Iron 0 Other: threads on fitting Q Polyethylene Plastic (complete all items that apply in a-c) Q Other Plastic (complete all Items that apply in a-c) Plastic failure was: [] a. ductile M b. brittle [] c. joint failure Q Other material: O Pressure Limiting and Regulating Facility 2. Failure occurred on Q Body of pipe Q Pipe Seam Q Joint 0 Component 4. Year the pipe or component which failed was installed: Q Other: 'r"q."a'"'fL'^ ^ .L 1' .... ' . ca Y]•l.: ^ 3. 4. Seam type 5. Valve type 6. Pipe or valve manufactured by "^ ^s ^? ^ 0 Above ground 0 Underground Q Underwater 0 Inside/under building 0 Other: inches In year Important: There are 25 numbered causes in this section. Check the box to the left of the primary cause of the Incident Check one circle In each of the supplemental items to the right of or below the cause you indicate. See the instructions for this form for guidance If either F1(1) External Corrosion, or F1 (2) Internal Corrosion is checked, complete all subparts a - e. Ft ^ '° ^ A P,P ARE T^?C ^^ r^ i 2. 0 In open ditch 0 Under pavement 2. Depth of cover: F1 - CORROSION 1. 1. Area of incident SMYS Specification .rar_^.:•r„+-=mc=NFC:„ y^...^!^^ N. Qt3MEt3 ^ L.a v SI?^^1.^^A^4.^^i1l^;^EPilcaiiae)^^^7 'A„L?1Fbih^R^^L ^A in. 1. Nominal pipe size (NPS) in. 2. Wall thickness a. Pipe Coating Q Bare 0 Coated Q Unknown ❑ External Corrosion b. c. Cause of Corrosion Visual Examination 0 Stray Current 0 Galvanic 0 Improper Cathodic Protection Q Microbiological 0 Other: 0 Localized Pitting 0 General Corrosion 0 Other: d. Was corroded part of pipeline considered to be under cathodic protection prior to discovering Incident? 0 Yes Year Protectlon Started: Q No 0 Unknown e, Was pipe previously damaged in the area of corrosion? 0 Unknown How long prior to incident: years months Q No 0 Yes ❑ internal Corrosion F2 - NATURAL FORCES 0 Subsidence 0 Landslide 0 Earthquake 0 Other: 3. ❑ Earth Movement => 4. ❑ Lightning 0 Scouring 0 Mudslide 0 Washouts 0 Flotation 5. ❑ Heavy Rains/Floods => 0 Frost heave 0 Thermal stress 0 Frozen components 6. ❑ Temperature 7. ❑ High Winds F3 - EXCAVATION 8. ❑ Operator Excavation Damage (including their contractors) / Not Third Party 9. ❑ Third Party Excavation Damage (complete a-d) a. Excavator group O General Public b. Type: 0 Road Work 0 Other: 0 OtheC 0 Excavator other than Operator/subcontractor 0 Government 0 Electric 0 Sewer 0 Phone/Cable/Fiber 0 Landowner 0 Pipeline 0 Water 0 Other: 0 Building Construction 0 Railroad c. Did operator get prior notification of excavation activity? mo, 0 Yes: Date received: Q No 0 One Call System Notification received from: day 0 Excavator yr. 0 General Contractor 0 Landowner d. Was pipeline marked? Q No 0 Yes (If Yes, check applicable items i- iv) Q Flags 0 Stakes 0 Paint Q No 0 Yes 0 Accurate 0 Not Accurate 0 Yes 0 No iv. Were marks made within required time? F4. - OTHER OUTSIDE FORCE DAMAGE => Fire/Explosion cause: 0 Man made 10. ❑ Fire/Explosion as primary cause of failure 11. ❑ Car, truck or other vehicle not relating to excavation activity damaging pipe 12. ❑ Rupture of Previousiy Damaged Pipe 13. ❑ Vandalism i. Temporary markings: ii. Permanent markings: lii. Marks were (check one) Form PHMSA F 7100.1 (03-04) 0 Natural Describe in Part G. Page 2 of 3 Material 14. Q Body of Pipe 15. [] Component 16 . [^ Joint Weld 17. Q Butt 18. F Fillet 19. [Q Pipe Seam 0 Dent 0 Gouge 0 Wrinkle Bend 0 Arc Burn 0 Other; 0 Valve 0 Fitting 0 Vessel 0 Extruded Outlet 0 Other: 0 Gasket 0 0-Ring 0 Threads 0 Fusion 0 Other: 0 Pipe 0 Fabrication 0 Other: 0 Branch 0 Hot Tap 0 Fitting 0 Repair Sleeve 0 LF ERW 0 HF ERW 0 DSAW 0 SAW 0 Seamless 0 Spiral 0 Flash Weld 0 Other: p Other: part F5 ...................................................................................................................................................................... Coinplete .a-fff you lncficate..any ^cause.rri a. Type of failure: b. c. d. e. f. 0 Poor Construction Procedures 0 Procedure not followed 0 Poor Workrnanship C] Construction Defect Ej Material Defect 0 No 0 Yes Was failure due to pipe damage sustained In transportation to the construction or fabrication site? Yes, complete d-f, If known 0 No Was part which leaked pressure tested before incident occurred? yr, day mo. Date of test: hr. Time held at test pressure: PSIG Estimated test pressure at point of incident: F6 - EQUIPMENT AND OPERATIONS 20. [] Malfunction of Control/Relief Equipment 21. [] Threads Stripped, Broken Pipe Coupling ^ 0 Valve 0 Nipples 0 Instrumentation 0 Pressure Regulator 0 Other: 0 Valve Threads (Q Mechanical Couplings C) Other: 22. [J Leaking Seals ......................................................................................................................................................................................................................................................................................... 23. Q incorrect Operation 0 Inadequate Procedures 0 Inadequate Safety Practices a. Type: 0 Failure to Follow Procedures 0 Other: Alcohol test: b. Number of employees invoived In incident who failed post-incident drug test: 0 No d. Hours on duty for person involved: 0 Yes c. Was person involved in Incident qualified per OQ rule? F7 - OTHER 24. [] Miscellaneous, describe: Unknown 25. Investigation Complete ® Still Under Investigation (submit a supplemental report when investigation is complete) ONl'RIB_U_TlNG^TQ^rHE E1fEt^1X;-^>;;;i^ (4ttach additional sheets as necessaty) „ RARG^M= NARtZ4TtVE;DESCR ^ PTfOMOF^AC.T.,QRS Form PHMSA F 7100.1 (03-04) Page 3 of3 *Railroad Commission of Texas • Pipeline Safety Evaluation System Field Package Routing Sheet Inspection Package ID: 102051 Activity / Classification: Specialized / Accident Company: 6776 ATMOS ENERGY CORP., MID-TEX DIVISION Unit: 3411 ATMOS ENERGY/MESQUITE INSPECTOR Lead Inspector: Alfred Garcia, Jr Inspector(s): Terry Sullivan Region(s): Fort Worth-6 Date Mailed to Supervisor: Database Change Form Included? Requires Invoice for 16 TAC 8.201 Fee ❑ Yes ❑ Yes No UI/ N SUPERVISOR . Supervisor: Date Reviewed: Jody Kerl LLI-2 Date Mailed to Austin: Legal Enforcement Requested: Y ❑ No Director's Approval: Database Change Complete: Data Entry Complete: Letter Sent: Filed: Specialized Approval: Received: Notes: Distribution Railroad Commission of Texas* Pipeline Evaluation System Field Package ID: 102051, Specialized / Accident Company/Unit/System Data CHANGES COMPANYINFORMATION" Company 6776 ATMOS ENERGY CORP., MID-TEX Representative Ms. Patti Richards Title V. P. Technical Services Phone 214-206-2807 24 Hour Phone 866-322-8667 FAX 214-206-2126 E-Mail pattirichards@atmosenergy.com Please makeany changes fo address information in the shaded areas Mailing Address Address Line 2 Address Line I Type City, State Dallas, TX P. 0, Box 223705 Zip Code 75222-3705 ddress Changes CHANGES UNIT-INFORMATION .' Unit 3411 ATMOS ENERGY/MESQUITE Representative Mr. Terry Triem Title S & C Supervisor Phone 469-261-7461 24 Hour Phone 800-817-8090 FAX E-Mail Please.make any changes'to addressinformation in the'shaded areas Type^: Addr.ess'Line 1 ^ : , Ad'dress,Iine.2' : .: City, State Dallas, TX Mailing Address 2601 Logan Street Zip Code 75150 ddress Changes Physical Address ddress Changes SYSTEMS SEL`'ECTED FOR EVALUATION." Evaluation ID Systeni ; Ip^'' 610980 1 MESQUITE I Distribution 20100703 Railroad Commission of Texas Pipeline Evaluation System 4/28/2010 09:11 Page 1 of 2 Field Package ID: 102051, Specialized / Accident Distribution Evaluation Data CHANGES EVALUATION INFORMATION;.. Evaluation ID 20100703 Company (6776) ATMOS ENERGY CORP., MID-TEX DIVISION Unit (3411) ATMOS ENERGY/MESQUITE Begin Date 12/08/2009 End Date 03/25/2010 Miles Evaluated 370.948 Integrity Code Prescriptive and Risk Based Contact 1 Elizabeth Delgado Contact 1 Title Operations Supervisor Contact 2 Contact 2 Title 1310 Hwy 66, Garland, TX 75040 Contacted at SYST.EM' INFORMATION - CHANGES System ID 610980 System Name MESQUITE Status Active Jurisdiction Jurisdictional Intra-Interstate Intrastate System Code (D) Distribution Gathering Type Install Year 1926 T4 Number 99999 Total Miles 370.948 Region Fort Worth MILES'BY COUN Changes;:: Miles:byCounty„ oun DALLAS PREVIOUSEVALUATIONS , ,.. , Evaluation Activity / Classification 20093463 Standard / Comprehensive ( System ID Begin Date End Date 610980 12/14/2009 12/18/2009 Lead Inspector Terry Sullivan Railroad Commission of Texasle Pipeline Evaluation System 4/28/2010 09:11 Page 2 of 2 Field Package ID: 102051, Specialized / Accident Distribution Evaluation Data ;.^. ^ PREVIOU,S'V)OLATIONS; .;, Evaluation Violation Code State Status Status Date 20093463 192-703-002 Corrected Complete 12/18/2009 Railroad Commission of Texas0 Page 1 of 1 Pipeline Evaluation System 4/28/2010 09:11 Field Package ID: 102051, Specialized / Accident System Events/Comments System: 610980 MESQUITE Evaluation ID: 20100703 SYSTEM EVENTSc Date System ID at Event . 12/14/2009 610980 Event Note Action Total Miles Changed Adjusted Milage per Atmos documents (New Milage 370.948) From: 374.2 To: 370.948 SYSTEM COMMENTS Employee Date Comment System Conversion 02/06/2009 INCLUDES BALCH SPRINGS, SEAGOVILLE AND SUNNYVALE System Conversion 02/06/2009 OPERATOR CHANGE FROM TXU GAS DISTRIBUTION (5702) TO TXU GAS System Conversion 02/06/2009 COMPANY (6468) PER MLM 12/15/03 SEC. System Conversion 02/06/2009 OPERATOR CHANGE FROM TXU GS COMPANY (6468) TO ATMOS ENERGY System Conversion 02/06/2009 CORP., MID-TEX DIVISION (6776) PER MLM 4/7/05 SEC. System Conversion 02/06/2009 SYSTEM MILEAGE ADJUSTED FROM 368.3 TO 374.1 MILES PER TES System Conversion 02/06/2009 EVALUATION 08-0320-0322 12/17/07 SEC. System Conversion 02/06/2009 MILEAGE ADJUSTED FROM 374.1 TO 374.2 MILES PER TES System Conversion 02/06/2009 EVALUATION 09-0157-0162 10/24/08 SEC. ^ Railroad Commission of Texas is Pipeline Evaluation System 4/28/2010 09:11 Page 1 of 4 Field Package ID: 102051, Specialized I Accident Distribution System Data System: 610980 Evaluation ID: 20100703 MESQUITE CURRENT. INFORMATION SYSTEM.DETAIL .- CHANGES 3 Purchased Meters 27260 Customers Self Odorizers Provided By ❑ Supplier ❑ Self ❑ No Change ❑ Bypass ❑ Wick ❑ Farm Taps ❑ Drip ❑ injection ❑ No Change 2 Odorizers Injection Odorizer Types Scentinal E Odorant City Gate Stations 2 Patrol Points 10 Safety Related Condition #(s) N Farm Taps 0 38.800 Service Average Length (Ft) Regulator Stations 6 Master Meter Regulator Stations 0 Low Pressure? Yes Cathodic Protection Zones 494 Short Cathodic Pressure Sections 1279 Casings 0 Shorted Casings 0 Unrepaired Grade 2 Leaks 60 Unrepaired Grade 3 Leaks 265 El Yes 12/08/2009 Unrepaired Leaks As Of OVERPRESSURE PROTEC.TION TYPES Pr.essure Device., ;Pr.ovided^By, Changes, Monitor Relief MAXIMUM'ALLOINABLEOPERATING PRESSURE` MAOP ocation 55 Measuring Station 60 Measuring Station Changes, ❑ No 01 Railroad Commission of Texas 0 Page 2 of 4 Pipeline Evaluation System Field Package ID: 102051, Specialized / Accident 4/28/2010 09:11 Distribution System Data MESQUITE System: 610980 Evaluation ID: 20100703 SUPPLIERS': 632316 Company Name Company ID System:Name' SystemID ATMOS PIPELINE - TEXAS 6777 D (MESQUITE TO IRVING) AIREDLEAKS Leak.Data Date: 06/30/2009 Main Leaks Service Leaks 5 8 Excavation 12 17 Other Outside Force Damage 2 6 Material or Welds 0 1 Operations 3 10 Other 11 160 :Leak^C a`ue Corrosion Natural Forces Equipment MILESOF,MAIN:BY'SIZE" ' *Reminder: Ranqes:listed.:ar.eforliistorical information New datacollected should bedetailed by individual.pipe size and type. Pipe Size : Pipe fype Milesof`3: inch equivalent Miles 399.10 Steel Unprotected Bare 2" or Less 8.363 Steel Unprotected Bare Over 2" Thru 4" 4.905 Steel Unprotected Bare Over 4" Thru 8" 1,533 Steel Unprotected Bare Over 8" Thru 12" 0.060 Steel Protected Coated 2" or Less 55.022 Steel Protected Coated Over 2" Thru 4" 45.316 Steel Protected Coated Over 4" Thru 8" 21.147 Steel Protected Coated Over 8" Thru 12" 4.599 Steel Protected Coated Over 12" 3.485 2" or Less 144.186 PE Railroad Commission of TexasO Pipeline Evaluation System . 4/28/2010 09:11 Page 3 of 4 Field Package ID: 102051, Specialized / Accident Distribution System Data System: 610980 Evaluation ID: 20100703 MESQUITE MILESOF MAIN'BYSIZE "Reminder: Ranges`listed are'for historical information. New data collected should bedetailed by individual;pipe size and type. Miles Pipe:Size Pipe Type, 399.10 Miles of 3 inch equivalenti PE Over 2" Thru 4" 66.423 PE Over 4" Thru 8" 15.909 . NUMBER°OF SERVICES,BY SIZE . , "Remmder Ranges;'listed are for'historical information: `New data collecfed should 6e detailetl.by"iridividual:pipe. ipe-Size. PipeType Services Steel Unprotected Bare 1" or Less 4576 Steel Unprotected Bare Over 1" Thru 2" 3942 PE 1" or Less 4724 PE Over 1" Thru 2" 160 PE Over 2" Thru 4" 3 LOSTAND.UNACCO.UNTABLE'GAS ' Reporting'fVlonth June 2009 MCF."Purchased 110684495.000 MCF^Lost 107353927.000 Railroad Commission of Texas 4/28/2010 09:11 Pipeline Evaluation System Field Package ID: 102051, Specialized / Accident Distribution System Data System: 610980 Evaluation ID: 20100703 Evaluation Comments: MESQUITE Page 4 of 4 COMPANY NAME: Atmos Energy a EVAL #: 2010 - 0703 I DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 12/08/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Front view of the property. DATE: 12/08/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Front and Left side view of property. DATE: 12/08/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Photo shows the rear of the residence s EVAL #: 2010 - 0703 COMPANY NAME: Atmos Energy l DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 12/08/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Red arrow shows where the customer yard line enters the rear of the residence. Note this is the area of the bathroom where the highest gas concentrations were detected. DATE: 12/10/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Pressurized isolated section of pipe. The bubbles indicate the area of the leak. DATE: 12/10/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Photo demonstrates the compression coupling leaking with small, medium, large bubbles. EVAL #: 2010 - 0703 COMPANY NAME: Atmos Energy I DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 12/10/09 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive and 2406 Luau Drive, Mesquite, TX DESCRIPTION: Tap to 2505 Catalina Drive and 2406 Luau Drive including service lines and compression couplings. DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive and 2406 Luau Drive, Mesquite, TX DESCRIPTION: 2505 Catalina Drive and 2406 Luau Drive braced service lines and compression couplings on stands. DATE 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive Mesquite, TX DESCRIPTION: Photo shows the position and stab depth of the service line as it relates to the compression coupling. EVAL #: 2010 - 0703 COMPANY NAME: Atmos Energy I DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 2/05/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2406 Luau Drive, Mesquite, TX DESCRIPTION: Photo shows the position and stab depth of the service line as it relates to the compression coupling. DATE: 2/05/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive, Mesquite, TX DESCRIPTION: Photo shows the condition of the coupling gasket. DATE: 2/05/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2505 Catalina Drive, Mesquite, TX DESCRIPTION: Photo shows the condition of the compression coupling nut and the deterioration of the gasket material. EVAL #: 2010 - 0703 COMPANY NAME: Atmos Energy I DATE: 11/20/09 INSPECTOR: Alfred Garcia DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2505Catalina,Drive, Mesquite, TX DESCRIPTION: Compression nut identifying Normac as the manufacturer of the coupling DATE: 2/5/10 PHOTOGRAPHER: T. Sullivan LOCATION: 2406 Luau Drive, Mesquite, TX DESCRIPTION: Compression nut gasket in place and missing beads from the bead-tipped gasket. DATE: 2/5/10 ' PHOTOGRAPHER: T. Sullivan LOCATION: : 2406 Luau Drive, Mesquite, TX DESCRIPTION: Photo demonstrates the condition of the compression coupling nut with missing beads from bead-tipped gasket. 0 Page 1 of 1 Elaine Moore - GUD 09981; Atmos From: To: Date: Subject: Elaine Moore Carrie Smith 5/8/2012 10:43 AM GUD 09981; Atmos Hi, Carrie. Any chance that Atmos is in compliance in this case so we can settle it? I am keeping my fingers crossed! file://C:\Documents and Settings\MooreE\Local Settings\Temp\XPGrpWise\4FA8F8E8RR... 5/8/2012 ^b Page 1 of 1 0 Elaine Moore - Re: Pipeline Safety enforcement dockets From: To: Date: Subject: Polly McDonald Moore, Elaine 9/19/2011 9:59 AM Re: Pipeline Safety enforcement dockets For some reason, I thought there was another one I needed to check on. I may need to talk to him about Atmos/Mesquite, because the steel service line replacement program is related to that incident as well. Thanks. >>> Elaine Moore 9/19/2011 9:48 AM >>> The other one was the Atmos/Mesquite-GUD 09981. I think Lowell is trying to settle this one in the near future. >>> Polly McDonald 9/19/2011 8:51 AM >>> Elaine, I apologize for taking sooooo long to get back to you. The Atmos/Irving docket needs to sit for a while. Their steel service line replacement program is their plan of compliance, but that's not going to be finished until 2012. And now I have to confess that I forgot what the other docket is! file://C:\Documents and Settings\MooreE\Local Settings\Temp\XPGrpWise\4E771298RR... 9/19/2011 } Page 1 of 1 Elaine Moore - Atmos From: To: Subject: Elaine Moore Lowell Williams Atmos I saw Polly today. She is okay with the $95,000.00 settlement. She is going to check to make sure compliance has been achieved and will most likely have to request a new inspection. I told her of Phil's offer to write a letter regarding the status of the pipeline upgrade, but she didn't indicate that would be necessary. about:blank 7/26/2011 Wf ^-^^ if 5 P"c, ,^f^;g--s, • Page 1 of 1 0 Elaine Moore - GUD 09981; Atmos Energy Corp., Mid-Tex Division From: To: Date: Subject: CC: Attachments: Elaine Moore pgamble@hslawmail.com 12/2/2010 4:49 PM GUD 09981; Atmos Energy Corp., Mid-Tex Division ann.coffin@pcrllp.com; Becky Tate GUD 09981 Atmos Modified OrderFINAL12-2-10.wpd Phil Lowell asked that I send you a copy of the revised consent order. If you have difficulty opening it, please contact Becky Tate, Legal Assistant, tomorrow as I will be out of the office. She can convert it for you. Otherwise, I will be back in the office on Monday. Elaine Moore file://C:\Documents and Settings\MooreE\Local Settings\Temp\XPGrpWise\4CF7CEIDR... 12/2/2010 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703), AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS STIPULATION, AGREED SETTLEMENT AND CONSENT ORDER day of , 2010, the above-captioned docket came on for On this the consideration by the Railroad Commission of Texas ("Commission"). The Enforcement Section of the Commission, through its attorney, announce that the Enforcement Section 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"), subject to the approval of the Commission. The Commission has authority to informally dispose of this contested case docket through a consent order pursuant to Texas Government Code Annotated Section 2001.056(3). IN SETTLEMENT OF THE MATTERS AT ISSUE IN THIS DOCKET, the Enforcement Section of 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 Tex. Util. Code, Chapter 121, Subchapter E, Atmos is a "person" as that term is defined by 16 Texas Administrative Code Section 8.5(21). 3. Atmos is an "operator" as that term is defined in Title 16, Section 8.5(20) of the Texas Administrative Code. 4. Atmos operates gas pipeline facilities and is engaged in the transportation of gas as defined by 16 Texas Administrative Code Section 8.5(23) and 8.5(28) 5. Atmos is a "gas company" as that term is defined in Title 16, Section 8.5(11) of the Texas Administrative Code. 6. The Enforcement Section and Atmos hereby agree that the alleged violations of 49 CFR 192.13(c); 49 CFR 192.603(b) and 49 CFR 192.613(b) set forth in Gas Utilities DocketNo. 09981 regarding Safety Evaluation ID No. 20100703 are hereby settled and compromised under the terms of this Order. 0 S Stipulation, Agreed Settlement and Consent Order Gas Utility Docket No. 09981, page 2 7. Atmos makes no admission of any alleged pipeline safety violations, but wishes to address the Commission's concerns under the terms of this Order. 8. The Commission and Atmos wish to further the goal of the safe operation of natural gas pipeline facilities within the State of Texas. 9. Pursuant to Section 2001.051 of the Texas Government Code, the Commission gave Atmos an opportunity for a hearing regarding the matters at issue in this docket, and Atmos has elected not to avail itself of the opportunity for a hearing. 10. The Commission has jurisdiction to assess an administrative penalty against Atmos pursuant to Sections 121.206 and 121.207 of the Texas Utilities Code. 11. The violations alleged in Gas Utilities Docket 09981 have been placed in compliance by Atmos with the requirements of 49 CFR 192.13(c); 49 CFR 192.603(b) and 49 CFR 192.613(b). 12. An administrative penalty in the amount of NINETY FIVE THOUSAND DOLLARS ($95,000.00) shall be recovered by the Commission for the violations asserted against Respondent. 13. Atmos has placed into the possession of the Commission funds in the amount of NINETY FIVE THOUSAND DOLLARS ( $95,000.00) as payment of administrative penalties assessed in Gas Utilities Docket No. 09981 pursuant to TEX. UTIL. CODE ANN. §§ 121.206 and 121.207. 14. The person signing hereunder for Atmos has authority to represent Atmos in this docket. The Commission's jurisdiction in this docket having been established and an agreement of the parties having been reached, it is, therefore, ORDERED by the Railroad Commission of Texas that Atmos Energy Corp., Mid-Tex Division is assessed an administrative penalty in the amount of NINETY FIVE THOUSAND DOLLARS ($95,000.00), and that Gas Utilities Docket No. 09981 is informally disposed of and closed by this Stipulation, Agreed Settlement and Consent Order. • 0 Stipulation, Agreed Settlement and Consent Order Gas Utility Docket No. 09981, page 3 DONE THIS DAY OF RAILROAD COMMISSION OF TEXAS (Order approved and signatures affixed by Master , 2010.) Agreed Order dated APPROVED AS TO FORM AND SUBSTANCE Atmos Energy Corp., Mid-Tex Division By: Its: 2010. Page 1 of 1 Lowell Williams - FW: Steel Service Line Replacement Program From: "Gamble, Phil" To: Date: 11/29/10 5:00 PM Subject: FW: Steel Service Line Replacement Program ^q^1,. .^, ^.^ LowellThanks for visiting with me about Atmos issues. Listed below is an update on the status of the steel service line replacement program and confirmation that all cities in the Atmos Mid-Tex Division have signed off on the project. I'll see you tomorrow at the RRC Commissioners Conference. Thanks Phil Gamble From: Park, David J [mailto: David. Pa rk@atmosenergy.com] Sent: Monday, November 29, 2010 4:44 PM To: Gamble, Phil Cc: Ann M. Coffin; Walther, Douglas C. Subject: Steel Service Line Replacement Program Here is an update on the status of the steel service line replacement program in Mid-Tex. 1. All cities in the Mid-Tex Division have now approved the settlement agreement that includes the steel service line replacement program that provides for replacement of 100,000 steel service lines by September 30, 2012 based on the risk model. 2. As of November 19, 2010 we have replaced 18,324 steel service lines 3. We currently have 63 contract crews working on steel service line replacement. David Park file://C:\Documents and Settings\WilliamL\Local Settings\Temp\XPGrpWise\4CF3DC18... 11/30/2010 Page 1 of 1 Elaine Moore - Atmos Answer From: To: Date: Subject: Elaine Moore Mary McDaniel 8/16/2010 2:42 PM Atmos Answer I am forwarding you a copy of Atmos' answer in case you want to look it over. If you do, and if you have an extra moment (a big couple of "ifs", I know) maybe you could jot down or e-mail me your thoughts regarding their explanations as to why they committed no violations. Thanks! file://C:\Documents and Settings\MooreE\Local Settings\Temp\XPGrpWise\4C694E59RR... 8/16/2010 • • Package Details Page 1 of 1 - Welcome, Bill Drury Package Details Events Requested 41 Friday 7/16/2010 8:30 AM [ Void Details Site DEMS ID Ship To I Ship To 2 Address I Address 2 Address 3 Service Sender First Name Remark1 Remark3 Delivery Date eprint TPASS Z900000066749 Ann Coffin Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 150 2PM*POST*POST1 *LTR City State ZIP Austin Tx 78701 Country us Weight 0.500 Manifest Date Carrier Tracking No. POST 9171082133393806793362 Sender Last Name. Remark2 Reference Drury Events + Contents Status REQUESTED Date 7/16/2010 12:00:00 AM Time Clerk 8;30 AM druryw Location Site Notes/Reference Signature TPASS Back Quick Ref + Training Lesson USPS Track and Confirm http://pbtx. g l .com/dems/(S (brzocOqlswtzfvzjnyu0tc45))/PackageDetails.aspx?type=out&si... 7/16/2010 Package Details Page 1 of 1 Welcome, Bill Drury Package Det,ails Events Requested Friday 7/16/2010 8:43 AM Reprint VOld. Details Site DEMS ID Ship To 1 TPASS City Austin Z900000066767 State ZIP TX 78701 Country us Weight 0.500 Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Ship To 2 Address 1 Address 2 Address 3 Service Manifest Date Carrier Tracking No. Sender Last Name Remark2 Reference 2PM'°POST`POST1 *LTR Sender First Name Remark1 Remark3 Delivery Date Bill POST 9171082133393806793355 Drury Events ( Contents Status Date Time Clerk REQUESTED 7/16/2010 12:00:00 AM 8:43 AM druryw Location Site Notes/Reference Signature TPASS Back I Quick Ref + Training Lesson USPS Track and Confirm http://pbtx.g 1.com/dems/(S(brzocOqlswtzfvzjnyu0tc45))/PackageDetails.aspx?type=out&si... 7/16/2010 of ti GAS UTILITIES DOCKET NO. 9981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS BEFORE THE RAILROAD COMMISSION OF TEXAS § ATMOS ENERGY CORP., MID-TEX DIVISION'S ORIGINAL ANSWER AND REQUEST FOR HEARING NOW COMES ATMOS ENERGY CORPORATION, MID-TEX Company" or "Atmos") and timely files this Original Answer and Request for He ^-, -T1 IO^^"^ ("th^ 0 in n^^ponse to the Original Complaint of the Pipeline Safety Section of the Railroad Commission o`f "Texas ("Commission") in Docket No. 9981. Atmos hereby generally denies each allegation set forth in the Commission's Original Complaint and requests a hearing in this case. Pursuant to Commission Rule of Practice and Procedure 1.49, this Original Answer and Request for Hearing is timely filed. 1. GENERAL DENIAL Atmos generally denies each allegation set forth in the Commission's Original Complaint. II. FURTHER RESPONSE TO ALLEGATIONS Without waiver of the foregoing general denial, Atmos provides the following in response to the allegations contained in the Commission Original Complaint. Alleged Violation of Rule 49 CFR § 192.13(c). The Commission's Original Complaint alleges that Atmos violated 49 CFR 192.13(c) on November 20, 2009, by failing to: (1) use all leak detection equipment and appropriate personnel available at the scene of emergency; (2) review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and (3) detect and grade the leak at the site of the emergency for seventeen (17) days. Contrary to these allegations, Atmos did, 1 as required by 49 CFR 192.13(c), have available personnel, equipment, tools, and material present at the incident site on November 20, 2009. The evidence will demonstrate that weather conditions and main placement at the incident site contributed to unique operating conditions that prevented successful bar testing on this date. In fact, in its April 28th Report, the Commission recognizes that 1.98 inches of rainfall had fallen in Mesquite on November 20, 2009. The wet weather conditions caused by this level of rainfall, coupled with prior days of similarly wet conditions, prevented gas from readily migrating to the surface and thus, precluded effective leak detection. In fact, Atmos is not aware of any leak detection device that will identify leaking gas that has not migrated to the surface. And, the Commission's Original Complaint fails to identify any leak detection equipment that would have allowed the Company to perform accurate leak detection testing on November 20, 2009, given the wet soil conditions present at the incident site. The evidence will also demonstrate that because the rain-saturated soil prevented the use of combustible gas indicator ("CGI") equipment below ground level, the responding Atmos technician contacted his supervisor pursuant to existing protocol and interrupted gas service at the meter located at the rear property line. In lieu of CGI testing due to soil conditions, the Atmos technician remained on-site and conducted a visual inspection to identify the presence of a gas leak. No visual indications of a gas leak were observed. In addition, as acknowledged in the Commission's April 28th Report, the Atmos technician tested the house piping and found no leaks. The sewer vent was also checked and no gas was detected. Further, the Atmos technician used a CGI to survey above ground level and no gas was detected. Each of the actions undertaken by the Atmos technician complied with existing protocols set forth in the Company's Operations and Maintenance Manual. The Original Complaint's allegation that Atmos failed to review its employees' activities to determine whether the procedures were effectively followed in each emergency is likewise incorrect. It is clear from the Commission's April 28^' Report that the review required by 49 CFR 2 § 192.615(b)(3) occurred. Moreover, to the extent that the Commission contends that the substance of the review was insufficient, neither the Commission's Original Complaint or April 28th Report identify what additional review the Commission would have Atmos undertake. Accordingly, the Commission's Original Complaint fails to provide Atmos notice of the facts on which it bases the allegation that Atmos failed to review its employee's activities. The evidence will demonstrate that the gas detection equipment employed by all of Atmos' service technicians automatically monitors for carbon monoxide ("CO") and alarms if a CO environment is detected. The documentation the Commission points to on the LIO report indicating that CO was not checked relates to a specific practice Atmos has to test for CO at each appliance. Insomuch as the gas was turned off at the meter prior to the service technician's entry into the residence, it was not possible for the service technician to test for CO at each appliance and the service technician appropriately reflected that fact on the LIO report. Atmos also denies the Original Complaint's allegations related to the timing of Atmos' completion of the incident investigation at 2505 Catalina Drive. The Commission's April 28th Report acknowledges that "[t]here was no access to the customer property" until December 7, 2009. This lack of access to the homeowner's property prevented Atmos from identifying the gas leak present at the service tap to 2505 Catalina Drive prior to December 7, 2009. Further, since the issuance of the Commission's April 28ffi Report, Atmos has verified that it was contacted on November 24, 2009, by the homeowner's representative and informed that access to the homeowner's property was prohibited. As gas service to 2505 Catalina Drive was interrupted since the meter at the rear property line was turned off, Atmos had no legal basis for entering the property absent the homeowner's agreement. This agreement was not provided until December 7, 2009, when Atmos' technician was granted access to 2505 Catalina Drive in conjunction with a site visit by the homeowner's insurance representatives. Notably, December 7, 2009 was the first date 3 subsequent to the incident that Atmos was permitted entry to the homeowner's property. Upon receiving entry, Atmos performed bar hole testing following the path of the customer yard line to the point where the line enters the residence near the bathroom. The bar testing was performed at one-foot intervals and 16% gas was detected in an area under the bathtub. Atmos initiated a leak investigation, determined a Grade 1 condition existed, and remained on-site until the Grade 1 condition was eliminated. In sum, the allegation that Atmos unreasonably delayed its investigation is untrue. Alleged Violation of Rule 49 CFR § 192.603(b). The Original Complaint's allegation that Atmos violated 49 CFR § 192.603(b) is incorrect. 49 CFR § 192.603(b) requires an operator to keep records necessary to administer the procedures established under 49 CFR § 192.605. Nothing in 49 CFR § 192.605 or any of the sections cited therein with respect to a natural gas distribution system requires the recording of data in the manner that the Commission suggests. Namely, that leak sketches accompanying a leak report must graphically depict migration to 0%. Moreover, a review of the referenced Leak Reports clearly indicates that, in every instance, a 0% reading was obtained in each direction. Specifically, the referenced Leak Reports clearly state "Bar Tested each direction to 0%." The accompanying sketches included in the referenced Leak Reports further depict the perimeter of the migration pattern established by the bar testing. These sketches detail the percentage migration to the perimeter of the sketch, which represents 0%. Finally, nothing in the Commission's Original Complaint or April 28th Report provides any evidence to substantiate the claim that "[S]ince, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate." Alleged Violation of 49 CFR § 192.613(b). The Original Complaint's allegation that Atmos failed to initiate and carry out a program to 4 recondition or phase out all high risk steel service line segments is false. Atmos, as part of its ongoing surveillance activities and routine maintenance, takes action to replace steel service lines that do not meet the Commission's rigorous safety requirements. In fact, as of today, Atmos has replaced all steel service lines on Mapsheet 131, which includes the location of 2505 Catalina Drive. Further, Atmos is continuing its effort to replace steel service lines in Mesquite consistent with the risk model relied on by the Company to prioritize replacement activities. To date, these efforts have resulted in the replacement of over 1100 steel service lines in Mesquite. III. RESERVATION OF RIGHT TO AMEND Atmos reserves the right to amend this Original Answer and Request for Hearing in the future. WHEREFORE, PREMISES CONSIDERED, Atmos respectfully requests that the Commission deny the relief requested in the Original Complaint, and that it be granted such additional relief to which it has shown itself entitled. Respectfully submitted, By Sta^e Bar No. 007 PARSLEY COFFIN PNNER 98 San Jacinto Boulevard Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) ATTORNEY FOR ATMOS ENERGY CORP., MID-TEX DIVISION 5 CERTIFICATE OF SERVICE I hereby certify that a true and correct cop y6fft ^^g document wa erved on all parties of record on this 13th day of August, 2010 y U ted ates irst-class mai and delivery, or facsimile. 6 0 GAS UTILITIES DOCKET NO. 9981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS § §1 § § BEFORE THE § § RAILROAD COMMISSIbN OF TEXAS. § § § ATMOS ENERGY CORP., MID-TEX DIVISION'S ORIGINAL ANSWER AND REQUEST FOR HEARING cn . ^' c^ , . _. W NOW COMES ATMOS ENERGY CORPORATION, MID-TEX DIG&Olr,- ("the Company" or "Atmos") and timely files this Original Answer and Request for Hearing in response to the Original Complaint of the Pipeline Safety Section of the Railroad Commission of Texas ("Commission") in Docket No. 9981. Atmos hereby generally denies each allegation set forth in the Commission's Original Complaint and requests a hearing in this case. Pursuant to Commission Rule of Practice and Procedure 1.49, this Original Answer and Request for Hearing is timely filed. 1. GENERAL DENIAL Atmos generally denies each allegation set forth in the Commission's Original Complaint. II. FURTHER RESPONSE TO ALLEGATIONS Without waiver of the foregoing general denial, Atmos provides the following in response to the allegations contained in the Commission Original Complaint. Alleged Violation of Rule 49 CFR § 192.13(c). The Commission's Original Complaint alleges that Atmos violated 49 CFR 192.13(c) on November 20, 2009, by failing to: (1) use all leak detection equipment and appropriate personnel available at the scene of emergency; (2) review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and (3) detect and grade the leak at the site of the emergency for seventeen (17) days. Contrary to these allegations, Atmos did, 1 as required by 49 CFR 192.13(c), have available personnel, equipment, tools, and material present at the incident site on November 20, 2009. The evidence will demonstrate that weather conditions and main placement at the incident site contributed to unique operating conditions that prevented successful bar testing on this date. In fact, in its April 28ti' Report, the Commission recognizes that 1.98 inches of rainfall had fallen in Mesquite on November 20, 2009. The wet weather conditions caused by this level of rainfall, coupled with prior days of similarly wet conditions, prevented gas from readily migrating to the surface and thus, precluded effective leak detection. In fact, Atmos is not aware of any leak detection device that will identify leaking gas that has not migrated to the surface. And, the Commission's Original Complaint fails to identify any leak detection equipment that would have allowed the Company to perform accurate leak detection testing on November 20, 2009, given the wet soil conditions present at the incident site. The evidence will also demonstrate that because the rain-saturated soil prevented the use of combustible gas indicator ("CGI") equipment below ground level, the responding Atmos technician contacted his supervisor pursuant to existing protocol and interrupted gas service at the meter located at the rear property line. In lieu of CGI testing due to soil conditions, the Atmos technician remained on-site and conducted a visual inspection to identify the presence of a gas leak. No visual indications of a gas leak were observed. In addition, as acknowledged in the Commission's April 28th Report, the Atmos technician tested the house piping and found no leaks. The sewer vent was also checked and no gas was detected. Further, the Atmos technician used a CGI to survey above ground level and no gas was detected. Each of the actions, undertaken by the Atmos technician complied with existing protocols set forth in the Company's Operations and Maintenance Manual. The Original Complaint's allegation that Atmos failed to review its employees' activities to determine whether the procedures were effectively followed in each emergency is likewise incorrect. It is clear from the Commission's Apri128th Report that the review required by 49 CFR 2 § 192.615(b)(3) occurred. Moreover, to the extent that the Commission contends that the substance of the review was insufficient, neither the Commission's Original Complaint or April 28th Report identify what additional review, the Commission would have Atmos undertake. Accordingly, the Commission's Original Complaint fails to provide Atmos notice of the facts on which it bases the allegation that Atmos failed to review its employee's activities. The evidence will demonstrate that the gas detection equipment employed by all of Atmos' service technicians automatically monitors for carbon monoxide ("CO"). and alarms if a CO environment is detected. The documentation the Commission points to on the LIO report indicating that CO was not checked relates to a specific practice Atmos has to test for CO at each appliance. Insomuch as the gas Was turned off at the meter prior to the service technician's entry into the residence, it was not possible for the service technician to test for CO at each appliance and the service technician appropriately reflected that fact on the LIO report. Atmos also denies the Original Complaint's allegations related to the timing of Atmos' completion of the incident investigation at 2505 Catalina Drive. The Commission's April 28th Report acknowledges that "[t]here was no access to the customer property" until December 7, 2009. This lack of access to the homeowner's property prevented Atmos from identifying the gas leak present at the service tap to 2505 Catalina Drive prior to December 7, 2009. Further, since the issuance of the Commission's April 28th Report, Atmos has verified that it was contacted on November 24, 2009, by the homeowner's representative and informed that access to the homeowner's property was prohibited. As gas service to 2505 Catalina Drive was interrupted since the meter at the rear property line was turned off, Atmos had no legal basis for entering the property absent the homeowner's agreement. This agreement was not provided until December 7, 2009, when Atmos' technician was -granted access to 2505 Catalina Drive in conjunction with a site visit by the homeowner's insurance representatives. Notably, December 7, 2009 was the first date 3 0 subsequent to the incident that Atmos was permitted entry to the homeowner's property. Upon receiving entry, Atmos performed bar hol'e testing following the path of the customer yard line to the point where the line enters the residence near the bathroom. The bar testing was performed at one-foot intervals and 16% gas was detected in an area under the bathtub. Atmos initiated a leak investigation, determined a Grade 1 condition existed, and remained on-site until the Grade 1 condition was eliminated. In sum, the allegation that Atmos unreasonably delayed its investigation is untrue. Alleged Violation of Rule 49 CFR § 192.603(b). The Original Complaint's allegation that Atmos violated 49 CFR § 192.603(b) is incorrect. 49 CFR § 192.603(b) requires an operator to keep records necessary to administer the procedures established under 49 CFR § 192.605. Nothing in 49 CFR § 192.605 or any of the sections cited therein with respect to a natural gas distribution system requires the recording of data in the manner that the Commission suggests. Namely, that leak sketches accompanying a leak report must graphically depict migration to 0%. Moreover, a review of the referenced Leak Reports clearly indicates that, in every instance, a 0% reading was obtained in each direction. Specifically, the referenced Leak Reports clearly state "Bar Tested each direction to 0%." The accompanying sketches included in the referenced Leak Reports fixrther depict the perimeter of the migration pattern established by the bar testing. These sketches detail the percentage migration to the perimeter of the sketch, which represents 0%. Finally, nothing in the Commission's Original Complaint or April 28th Report provides any evidence to substantiate the claim that "[S]ince, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate." Alleged Violation of 49 CFR § 192.613(b). The Original Complaint's allegation that Atmos failed to initiate and carry out a program to 4 recondition or phase out all high risk steel service line segments is false. Atmos, as part of its ongoing surveillance activities and routine maintenance, takes action to replace steel service lines that do not meet the Commission's rigorous safety requirements. In fact, as of today, Atmos has replaced all steel service lines on Mapsheet 131, which includes the location of 2505 Catalina Drive. Further, Atmos is continuing its effort to replace steel service lines in Mesquite consistent with the risk model relied on by the Company to prioritize replacement activities. To date, these efforts have resulted in the replacement of over 1100 steel service lines in Mesquite. III. RESERVATION OF RIGHT TO AMEND Atmos reserves the right to amend this Original Answer and Request for Hearing in the future. WHEREFORE, PREMISES CONSIDERED, Atmos respectfully requests that the Commission deny the relief requested in the Original Complaint, and that it be granted such additional relief to which it has shown itself entitled. Respectfully submitted, Sta^e-Bar No. 007 PARSLEY COFFIN PNNER 98 San Jacinto Boulevard Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) ATTORNEY FOR ATMOS ENERGY CORP., MID-TEX DIVISION 5 CERTIFICATE OF SERVICE I hereby certify that a true and correct cop parties of record on this 13th day of August, 2010 facsimile. 6 g document wa erved on all irst-class m, ', and delivery, or 0 0 GAS UTILITIES DOCKET NO. 9981 ENFORCEMENT ACTION AGAINST § ATMOS ENERGY CORP., MID-TEX § DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY § § § EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS § § § § C-) BEFORE TH E?, 8 ^-^ F_ RAILROAD COMMISMON OF TEXAS u> ^^ ^? cn ^ ^ r L;r M 0 er. ATMOS ENERGY CORP., MID-TEX DIVISION'S ORIGINAL ANSWER AND REQUEST FOR HEARING NOW COMES ATMOS ENERGY CORPORATION, MID-TEX DIVISION ("the Company' or "Atmos") and timely files this Original Answer and Request for Hearing in response to the Original Complaint of the Pipeline Safety Section of the Railroad Commission of Texas ("Commission") in Docket No. 9981. Atmos hereby generally denies each allegation set forth in the Commission's Original Complaint and requests a hearing in this case. Pursuant to Commission Rule of Practice and Procedure 1.49, this Original Answer and Request for Hearing is timely filed. 1. GENERAL DENIAL Atmos generally denies each allegation set forth in the Commission's Original Complaint. II. FURTHER RESPONSE TO ALLEGATIONS Without waiver of the foregoing general denial, Atmos provides the following in response to the allegations contained in the Commission Original Complaint. Alleged Violation of Rule 49 CFR § 192.13(c). The Commission's Original Complaint alleges that Atmos violated 49 CFR 192.13(c) on November 20, 2009, by failing to: (1) use all leak detection equipment and appropriate personnel available at the.scene of emergency; (2) review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and (3) detect and grade the leak at the site of the emergency for seventeen (17) days. Contrary to these allegations, Atmos did, 1 as required by 49 CFR 192.13(c), have available personnel, equipment, tools, and material present at the incident site on November 20, 2009. The evidence will demonstrate that weather conditions and main placement at the incident site contributed to unique operating conditions that prevented successful bar testing on this date. In fact, in its Apri128t' Report, the Commission recognizes that 1.98 inches of rainfall had fallen in Mesquite on November 20, 2009. The wet weather conditions caused by this level of rainfall, coupled with prior days of similarly wet conditions, prevented gas from readily migrating to the surface and thus, precluded effective leak detection. In fact, Atmos is not aware of any leak detection device that will identify leaking gas that has not migrated to the surface. And, the Commission's Original Complaint fails to identify any leak detection equipment that would have allowed the Company to perform accurate leak detection testing on November 20, 2009, given the wet soil conditions present at the incident site. The evidence will also demonstrate that because the rain-saturated soil prevented the use of combustible gas indicator ("CGI") equipment below ground level, the responding Atmos technician contacted his supervisor pursuant to existing protocol and interrupted gas service at the meter located at the rear property line. In lieu of CGI testing due to soil conditions, the Atmos technician remained on-site and conducted a visual inspection to identify the presence of a gas leak. No visual indications of a gas leak were observed. In addition, as acknowledged in the Commission's April 28th Report, the Atmos technician tested the house piping and found no leaks. The sewer vent was also checked and no gas was detected. Further, the Atmos technician used a CGI to survey above ground level and no gas was detected. Each of the actions undertaken by the Atmos technician complied with existing protocols set forth in the Company's Operations and Maintenance Manual. The Original Complaint's allegation that Atmos failed to review its employees' activities to determine whether the procedures were effectively followed in each emergency is likewise incorrect. It is clear from the Commission's Apri128t' Report that the review required by 49 CFR 2 § 192.615(b)(3) occurred. Moreover, to the extent that the Commission contends that the substance of the review was insufficient, neither the Commission's Original Complaint or April 28' Report identify what additional review the Commission would have Atmos undertake. Accordingly, the Commission's Original Complaint fails to provide Atmos notice of the facts on which it bases the allegation that Atmos failed to review its employee's activities. The evidence will demonstrate that the gas detection equipment employed by all of Atmos' service technicians automatically monitors for carbon monoxide ("CO") and alarms if a CO environment is detected. The documentation the Commission points to on the LIO report indicating that CO was not checked relates to a specific practice Atmos has to test for CO at each appliance. Insomuch as the gas was turned off at the meter prior to the service technician's entry into the residence, it was not possible for the service technician to test for CO at each appliance and the service technician appropriately reflected that fact on the LIO report.Atmos also denies the Original Complaint's allegations related to the timing of Atmos' completion of the incident investigation at 2505 Catalina Drive. The Commission's April 28th Report acknowledges that "[t]here was no access to the customer property" until December 7, 2009. This lack of access to the homeowner's property prevented Atmos from identifying the gas leak present at the service tap to 2505 Catalina Drive prior to December 7, 2009. Further, since the issuance of the Commission's April 20' Report, Atmos has verified that it was contacted on November 24, 2009, by the homeowner's representative and informed that access to the homeowner's property was prohibited. As gas service to 2505 Catalina Drive was interrupted since the meter at the rear property line was turned off, Atmos had no legal basis for entering the property absent the homeowner's agreement. This agreement was not provided until December 7, 2009, when Atmos' technician was granted access to 2505 Catalina Drive in conjunction with a site visit by the homeowner's insurance representatives. Notably, December 7, 2009 was the first date 3 subsequent to the incident that Atmos was permitted entry to the homeowner's property. Upon receiving entry, Atmos performed bar hole testing following the path of the customer yard line to the point where the line enters the residence near the bathroom. The bar testing was performed at one-foot intervals and 16% gas was detected in an area under the bathtub. Atmos initiated a leak investigation, determined a Grade 1 condition existed, and remained on-site until the Grade 1 condition was eliminated. In sum, the allegation that Atmos unreasonably delayed its investigation is untrue. Alleged Violation of Rule 49 CFR § 192.603(b). The Original Complaint's allegation that Atmos violated 49 CFR § 192.603(b) is incorrect. 49 CFR § 192.603 (b) requires an operator to keep records necessary to administer the procedures established under 49 CFR § 192.605. Nothing in 49 CFR § 192.605 or any of the sections cited therein with respect to a natural gas distribution system requires the recording of data in the manner that the Commission suggests. Namely, that leak sketches accompanying a leak report must graphically depict migration to 0%. Moreover, a review of the referenced Leak Reports clearly indicates that, in every instance, a 0% reading was obtained in each direction. Specifically, the referenced Leak Reports clearly state "Bar Tested each direction to 0%." The accompanying sketches included in the referenced Leak Reports further depict the perimeter of the migration pattern established by the bar testing. These sketches detail the percentage migration to the perimeter of the sketch, which represents 0%. Finally, nothing in the Commission's Original Complaint or April 28th Report provides any evidence to substantiate the claim that "[S]ince, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate." Alleged Violation of 49 CFR § 192.613(b). The Original Complaiint's allegation that Atmos failed to initiate and carry out a program to 4 recondition or phase out all high risk steel service line segments is false. Atmos, as part of its ongoing surveillance activities and routine maintenance, takes action to replace steel service lines that do not meet the Commission's rigorous safety requirements. In fact, as of today, Atmos has replaced all steel service lines on Mapsheet 131, which includes the location of 2505 Catalina Drive. Further, Atmos is continuing its effort to replace steel service lines in Mesquite consistent with the risk model relied on by the Company to prioritize replacement activities. To date, these efforts have resulted in the replacement of over 1100 steel service lines in Mesquite. III. RESERVATION OF RIGHT TO AMEND Atmos reserves the right to amend this Original Answer and Request for Hearing in the future. WHEREFORE, PREMISES CONSIDERED, Atmos respectfully requests that the Commission deny the relief requested in the Original Complaint, and that it be granted such additional relief to which it has shown itself entitled. Respectfully submitted, Sta^c-Bar No. 007 PARSLEY COFFIN 98 San Jacinto Boulevard Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) ATTORNEY FOR ATMOS ENERGY, CORP., NIID-TEX DIVISION 5 CERTIFICATE OF SERVICE I hereby certify that a true and correct cop 6ff"tedates g document wa erved on all parties of record on this 13'' day of August, 2010U st- class mai and delivery, or facsimile. 6 0 Parsley Coffin Renner A Limited Liability Partnership Post Office Box 13366 Austin, Texas 78711 TO: 0 Elaine Moore, Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Ave., 12th Floor Austin, TX 78701 VICTOR G. CARRILLO, CHAIRMAN LINDIL C. FOWLER, JR., GENERAL C911^ ELIZABETH A. JONES, COMMISSIONER LOWELL E. WILt ^Ms, DIRB^ ENFORC'iEMWT SECT MICHAEL L. WILLIAMS, COMMISSIONER Lvrif RMLROAD CoMMIssIoN OF Tixs OFFICE OF GENERAL COUNSEL July 16, 2010 Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 Re: Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 GAS UTILITIES DOCKET NO. 09981: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS 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 Utilities Code, 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. 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. 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. 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 Notice of Opportunity for Hearing, Oil & Gas Docket No. GUD Docket No. 09624, Page 2 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., MIDTEX DIVISION'S RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. 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. Sincerely, ^,^- ,/^^'.^`_` ame o^^'^Mone Staff Attor Y Office of General Counsel - Enforcement Phone: (512) 936-2301 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. 09981, on the person named below by depositing same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 16' day of July, 2010, properly addressed as follows: Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 CERT. NO. 91 7108 2133 3938 0679 3362 CERT. NO. 91 7108 2133 3938 0679 3355 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. 09981, on the person named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 16`i' day of July, 2010, properly addressed as follows: Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 2 AIIIIJ Bill Drury, Legal Assistfant Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6858 cc: Mary McDaniel - Austin • RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981: ENFORCEMENT ACTION AGAI*' ,`ATM(^S" ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VINS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 2010^7^ THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS ORIGINAL COMPLAINT Comes now, the Railroad Commission of Texas ("Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Company ID No. 6776) ("Respondent") with violations of Commission Pipeline Safety Regulations 49 CFR § 192.13(c), 49 CFR §192.603(b) and 49 CFR §192.613(b) at the Mesquite Pipeline System (System ID No. 610980), Dallas County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. NAT. RES. CODE ANN. §81 et seq., TEX. UTIL CODE ANN. §121.201 et seq. and §121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §3.70 and §8.1 et seq. Respondent is a "gas company" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.5 (11). For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Respondent is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The Mesquite Pipeline System (System ID No. 610980), operated by Respondent, is part of a gas pipeline facility as defined by 16 TEX. ADMIN. CODE §8.5(23) and is part of the gas company of Respondent subject to 16 TEX. ADMIN. CODE §8.1 et seq. Respondent 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),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 which is subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. Original Complaint, GUD Docket No. 09981, page 2 The notice of hearing required under Commission Rule 1.45 [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.45] may be served on Respondent by regular mail and by Certified Mail, Return Receipt Requested, to its attorneys of record: Ann M. Coffin and Mark Santos, Parsley Coffin Renner LLP, 98 San Jacinto Blvd., Suite 1450, Austin, Texas, 78701. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule 49 CFR §192.13(c) provides that each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part. Pursuant to 49 CFR §192.615(a)(4), each operator shall establish written procedures to minimize the hazard resulting from a gas pipeline emergency. At a minimum, the procedures must provide for the availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency. Further, 49 CFR § 192.615(b)(3) provides that each operator shall review employee activities to determine whether the procedures were effectively followed in each emergency. 2.1. On Friday, November 20, 2009 at approximately 12:31 p.m., a house explosion occurred at 2505 Catalina Drive in Mesquite, Texas. In response to the incident, Respondent dispatched a technician to investigate the Leak Investigation Order (LIO). The technician had only one type of leak detection equipment at the incident site and, as a result, was unable to bar test due to wet soil conditions. By having only one type of leak detection equipment at the incident site, Respondent failed to use all leak detection equipment and appropriate personnel available in its investigation of the emergency. 2.2. The following workday, on Monday November 23, 2009, an Atmos supervisor reviewed the LIO which contained the notation that the incident was a possible carbon monoxide ("CO") explosion. Despite the fact that CO was deemed a possible cause of the explosion, CO readings were not taken at the incident site, which fact was also noted in the LIO. In addition, Respondent failed to conduct any follow-up to the incident site even though bar testing had not been performed. By not causing its employees to take CO readings and to bar test, Respondent failed to review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency. Original Complaint, GUD Docket No. 09981, page 3 2.3 On November 24, 2009, Respondent was put on notice by the homeowner's association that the November 20, 2009 incident was a natural gas explosion. In response, Respondent investigated the main and service line and detected a gas reading of 0.5% at the service tap. No leak was graded at this time nor was there a record made of the bar testing results. During this same check, Respondent found and graded at least three additional leaks. Thereafter, Respondent failed to continue with its investigation until December 7, 2010 which investigation was eventually performed in conjunction with the homeowner's insurance representatives. During the investigation, gas concentrations were detected and a Grade 1 leak was created for 2505 Catalina Dr., Mesquite, Texas, the site of the explosion. Respondent failed to detect and grade the leak for seventeen (17) days after the incident and initial call, from November 20, 2009 until December 7, 2009. 3. By failing to use all leak detection equipment and appropriate personnel available at the scene of the emergency; review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and detect and grade the leak at the site of the emergency for seventeen (17) days, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13(c). PIPELINE SAFETY RULE 49 CFR §192.603(b) 1. Commission Pipeline Safety Rule 49 CFR §192.603(b) provides that each operator shall keep records necessary to administer the procedures established under § 192.605. Pursuant to 49 CFR § 192.605(a), each operator shall prepare and follow for each pipeline a manual of written procedures for conducting operations and maintenance activities and for emergency response. In accordance with § 192.605(b), the manual required by paragraph (a) of this section must include procedures for operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and subpart M of this part. 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that on leak reports regarding Leak No. 459302 at 2505 Catalina Dr; Leak No. 458826 at 2501 Catalina Dr; Leak No. 458825 at 2402 Luau Dr. and Leak No. 458824 at 3614 Palm Dr., Mesquite, Texas, the leak sketches did not indicate that bar testing was performed in Original Complaint, GUD Docket No. 09981, page 4 each direction to 0%. Although the leak sketches show the migration pattern, they do not indicate that a 0% reading was obtained in each direction. Since, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate. 3. By failing to maintain leak grading and leak monitoring data - - records necessary for conducting operations and maintenance activities and for emergency response - Respondent violated Commission Pipeline Safety Rule 49 CFR §192.603(b). PIPELINE SAFETY RULE 49 CFR §192.613(b) 1. Commission Pipeline Safety Rule 49 CFR §192.613(b) provides if a segment of pipeline is determined to be in unsatisfactory condition but no immediate hazard exists, the operator shall initiate a program to recondition or phase out the segment involved, or, if the segment cannot be reconditioned or phased out, reduce the maximum allowable operating pressure in accordance with 192.619(a) and (b). 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that, over the past several years, Respondent has experienced numerous incidents involving leaks from its steel service lines and their connections to the main or customer meter. Additionally, data submitted as part of the PS-95 leak report reveals that, within the past year, Respondent has a leak rate of over 64% for its steel service lines in all leaks repaired within the Mesquite System. Said leak rate of 64% indicates the steel service pipeline involved is in unsatisfactory condition and poses a potential safety issue thereby demanding a program to recondition or phase out the steel service lines. 3. By failing to initiate and carry out a program to recondition or phase out all high risk steel service lines and replace them with newer generation of service lines, Respondent violated Commission Pipeline Safety Rule 49 CFR §192.613(b). PREVIOUS VIOLATIONS There are no final orders against the Respondent for previous alleged violations of Commission rules and regulations. Original Complaint, GUD Docket No. 09981, page 5 PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN § 121.201 or a safety standard or rule relating to the transportation of gas or gas pipeline facilities adopted under that section is serious and constitutes hazard to the health or safety of the public. OPPORTUNITY FOR PUBLIC HEARING Respondent has been given the opportunity for a public hearing. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission prays that notice be given and a hearing held to consider the violations referenced in this Complaint, and requests the Commission to thereafter enter an order: a. assessing Respondent an administrative penalty of $190,000.00 (violation of 49 CFR §192.13(c) at $10,000.00 per day for 17 days; violation of 49 CFR §192.603(b) at $20,000.00 and violation of 49 CFR § 192.613(b) at $0 penalty), or such other amount as may be established by law; b. directing Respondent to maintain, and modify as necessary, its risk model on which its leak -survey program for the Mesquite Pipeline System (System ID No. 610980) is based so as to identify and prioritize the steel service line replacement. The priority and ranking system for steel service line replacement shall be based upon the degree of hazard for such system or segment within such system. The risk model shall identify risk factors and determine the degree of hazard associated with those risk factors. c. directing Respondent to submit the time schedule for the remaining replacement using the risk model for the Mesquite Pipeline System (System ID No. 610980) within thirty (30) days for approval by Pipeline Safety Division. d. directing Respondent to submit plans for replacement including the method of replacement, materials selected, joining procedures, and plans to install excess flow valves at all replaced service line locations as applicable for the Mesquite Pipeline System (System ID No. 610980) within thirty (30) days for approval by Pipeline Safety Division. e. directing Respondent to conduct more frequent surveys for the Mesquite Pipeline Original Complaint, GUD Docket No. 09981, page 6 System (System ID No. 610980) in those areas with the greatest potential for leakage and where leakage could be expected to create a hazard. The following factors, although not limited to, will be used to establish an increased frequency of leakage surveys in those areas that contain steel service lines: (i) pipe location, which means proximity to buildings or other structures and the type and use of the buildings and proximity to areas of concentrations of people; (ii) composition and nature of the piping system, which means the age of the pipe, materials, type of facilities, recent construction activities, operating pressures, leak history records, and other studies; (iii) the corrosion history of the service lines, which means known areas of significant corrosion or areas where corrosive environments are known to exist; (iv) environmental factors that affect gas migration, which means conditions that could increase the potential for leakage or cause leaking gas to migrate to an area where it could create a hazard, such as extreme weather conditions or events (significant amounts or extended periods of rainfall, extended periods of drought, unusual or prolonged freezing weather, hurricanes, etc.), particular soil conditions, unstable soil or areas subject to earth movement, subsidence, or extensive growth of tree roots around pipeline facilities that can exert substantial longitudinal force on the pipe and nearby joints; and (v) any other condition known to the operator that has significant potential to initiate a leak or to permit leaking gas to migrate to an area where it could result in a hazard, which could include construction activity near the pipeline, wall-to-wall pavement, trenchless excavation activities (e.g., boring), blasting, large earth-moving equipment, heavy traffic, increase in operating pressure, and other similar activities or conditions; f. directing Respondent to undertake all necessary measures to remove all high risk steel service lines and replace them with newer generation of service lines within onehundred eighty (180) days; and • Original Complaint, GUD Docket No. 09981, page 7 g• any other relief as the Commission deems proper. Respectfully submitted, EI-91-he Moore, Stdff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 12760535 Telephone No. (512) 936-2301 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: July 16, 2010 RAILROAD COMMISSION OF TEXAS GAS SERVICES DIVISION GAS UTILITIES DOCKET PROTESTED: NO DOCKET # 10-09981 PERMIT # ACTIVE: YES APPLICANT # AND NAME: 6776 ATMOS ENERGY CORP., MID-TEX DIVISION Mr. Christopher T. Forsythe REPRESENTATIVE NAME: PHONE: . (972) 855-3214 5430 LBJ Freeway, Suite 700 CITY CODE Dallas, , TX. 715240 0000 EXAMINER: SUFFIX CODES:(1) JE (2) (3) APPLICATION STATUS: MOTION FOR REHEARING: 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: CO EXAMINER: SUMMARIZE: YES NOTICE NUMBER _ MULTIPLE ORDERS 04/28/10 / / 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 3 5 TH 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) / / VICTOR G. CAItRILLO, CHAIRMAN LINDIL C. FOWLER, JR., GENERAL C ELIZABETH A. JONES, COMMISSIONER LOWELL E. WIZAVS, DIRE MICHAEL L. WILLIAMS, COMMISSIONER ENFORGE'MFr;VT SECT, RAILROAD COMMISSION OF TFXAS OFFICE OF GENERAL COUNSEL July 16, 2010 Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 Re: Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 GAS UTILITIES DOCKET NO. 09981: ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS 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 Utilities Code, 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. 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. 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 fi'le, please call Bill Drury, at (512) 463-6858. Under § 81.053 1, 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. 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY512-463-7284 * 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. GUD Docket No. 09624, Page 2 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., MIDTEX DIVISION'S RIGHT TO ENGAGE IN THE GAS DISTRIBUTION BUSINESS IN THE STATE OF TEXAS. 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. Sincerely, ^^ .^^ asne oofe taff Attorney Office of General Counsel - Enforcement Phone: (512) 936-2301 • 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. 09981, on the person named below by depositing ,same in the United States Mail, Certified Return Receipt Requested postage fully prepaid, on this the 16"' day of July, 2010, properly addressed as follows: Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 CERT. NO. 91 7108 2133 3938 0679 3362 Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin,.TX 78701 CERT. NO. 91 7108 2133 3938 0679 3355 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. 09981, on the person named below by depositing same in the United States Mail, first-class postage fully prepaid, on this the 16' day of July, 2010, properly addressed as follows: Ann Coffin Parsley, Coffin & Remmer, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 Mark Santos Parsley, Coffin & Renner, L.L.P. 98 San Jacinto Blvd., Ste. 1450 Austin, TX 78701 U 4 / Bill Drury, Legal Assistiant Office of General Counsel - Enforcement Railroad Commission of Texas (512) 463-6858 cc: Mary McDaniel - Austin O RAILROAD COMMISSION OF TEXAS .. C^:... ACTION AGAIDJST:ATMS` GAS UTILITIES DOCKET NO. 09981: ENFORCEMENT ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIffL`A- -IQNS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100.7 THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980) , 0^' t^^^ DALLAS COUNTY, TEXAS ORIGINAL COMPLAINT Comes now, the Railroad Commission of Texas ("Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Company ID No. 6776) ("Respondent") with violations of Commission Pipeline Safety Regulations 49 CFR § 192.13 (c), 49 CFR §192.603(b) and 49 CFR §192.613(b) at the Mesquite Pipeline System (System ID No. 610980), Dallas County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. NAT. RES. CODE ANN. §81 et seq., TEX. UTIL CODE ANN. §121.201 et seq. and § 121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §3.70 and §8.1 et seq. Respondent is a "gas company" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.5 (11). For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Respondent is a person as that term is defined by 16 TEX. ADMIN. CODE §8.5(21). The Mesquite Pipeline System ( System ID No. 610980), operated by Respondent, is part of a gas pipeline facility as defined by 16 TEX. ADMIN. CODE §8.5(23) and is part of the gas company of Respondent subject to 16 TEX. ADMIN. CODE §8.1 et seq. Respondent 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),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 which is subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. ft Original Complaint, GUD Docket No. 09981, page 2 The notice of hearing required under Commission Rule 1.45 [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.45] may be served on Respondent by regular mail and by Certified Mail, Return Receipt Requested, to its attorneys of record: Ann M. Coffin and Mark Santos, Parsley Coffin Renner LLP, 98 San Jacinto Blvd., Suite 1450, Austin, Texas, 78701. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule 49 CFR §192.13(c) provides that each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part. Pursuant to 49 CFR §192.615(a)(4), each operator shall establish written procedures to minimize the hazard resulting from a gas pipeline emergency. At a minimum, the procedures must provide for the availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency. Further, 49 CFR § 192.615(b)(3) provides that each operator shall review employee activities to determine whether the procedures were effectively followed in each emergency. 2.1. On Friday, November 20, 2009 at approximately 12:31 p.m., a house explosion occurred at 2505 Catalina Drive in Mesquite, Texas. In response to the incident, Respondent dispatched a technician to investigate the Leak Investigation Order (LIO). The technician had only one type of leak detection equipment at the incident site and, as a result, was unable to bar test due to wet soil conditions. By having only one type of leak detection equipment at the incident site, Respondent failed to use all leak detection equipment and appropriate personnel available in its investigation of the emergency. 2.2. The following workday, on Monday November 23, 2009, an Atmos supervisor reviewed the LIO which contained the notation that the incident was a possible carbon monoxide ("CO") explosion. Despite the fact that CO was deemed a possible cause of the explosion, CO readings were not taken at the incident site, which fact was also noted in the LIO. In addition, Respondent failed to conduct any follow-up to the incident site even though bar testing had not been performed. By not causing its employees to take CO readings and to bar test, Respondent failed to review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency. f Original Complaint, GUD Docket No. 09981, page 3 2.3 On November 24, 2009, Respondent was put on notice by the homeowner's association that the November 20, 2009 incident was a natural gas explosion. In response, Respondent investigated the main and service line and detected a gas reading of 0.5% at the service tap. No leak was graded at this time nor was there a record made of the bar testing results. During this same check, Respondent found and graded at least three additional leaks. Thereafter, Respondent failed to continue with its investigation until December 7, 2010 which investigation was eventually performed in conjunction with the homeowner's insurance representatives. During the investigation, gas concentrations were detected and a Grade 1 leak was created for 2505 Catalina Dr., Mesquite, Texas, the site of the explosion. Respondent failed to detect and grade the leak for seventeen (17) days after the incident and initial call, from November 20, 2009 until December 7, 2009. 3. By failing to use all leak detection equipment and appropriate personnel available at the scene of the emergency; review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and detect and grade the leak at the site of the emergency for seventeen (17) days, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13(c). PIPELINE SAFETY RULE 49 CFR §192.603(b) 1. Commission Pipeline Safety Rule 49 CFR §192.603(b) provides that each operator shall keep records necessary to administer the procedures established under § 192.605. Pursuant to 49 CFR § 192.605(a), each operator shall prepare and follow for each pipeline a manual of written procedures for conducting operations and maintenance activities and for emergency response. In accordance with § 192.605(b), the manual required by paragraph (a) of this section must include procedures for operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and subpart M of this part. 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that on leak reports regarding Leak No. 459302 at 2505 Catalina Dr; Leak No. 458826 at 2501 Catalina Dr; Leak No. 458825 at 2402 Luau Dr. and Leak No. 458824 at 3614 Palm Dr., Mesquite, Texas, the leak sketches did not indicate that bar testing was performed in • Original Complaint, GUD Docket No. 09981, page 4 each direction to 0%. Although the leak sketches show the migration pattern, they do not indicate that a 0% reading was obtained in each direction. Since, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate. 3. By failing to maintain leak grading and leak monitoring data - - records necessary for conducting operations and maintenance activities and for emergency response - Respondent violated Commission Pipeline Safety Rule 49 CFR §192.603(b). PIPELINE SAFETY RULE 49 CFR §192.613(b) 1. Commission Pipeline Safety Rule 49 CFR § 192.613(b) provides if a segment of pipeline is determined to-be in unsatisfactory condition but no immediate hazard exists, the operator shall initiate a program to recondition or phase out the segment involved, or, if the segment cannot be reconditioned or phased out, reduce the maximum allowable operating pressure in accordance with 192.619(a) and (b). 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that, over the past several years, Respondent has experienced numerous incidents involving leaks from its steel service lines and their connections to the main or customer meter. Additionally, data submitted as part of the PS-951eak report reveals that, within the past year, Respondent has a leak rate of over 64% for its steel service lines in all leaks repaired within the Mesquite System. Said leak rate of 64% indicates the steel service pipeline involved is in unsatisfactory condition and poses a potential safety issue thereby demanding a program to recondition or phase out the steel service lines. 3. By failing to initiate and carry out a program to recondition or phase out all high risk steel service lines and replace them with newer generation of service lines, Respondent violated Commission Pipeline Safety Rule 49 CFR §192.613(b). PREVIOUS VIOLATIONS There are no final orders against the Respondent for previous alleged violations of Commission rules and regulations. i Original Complaint, GUD Docket No. 09981, page 5 PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN § 121.201 or a safety standard or rule relating to the transportation of gas or gas pipeline facilities adopted under that section is serious and constitutes hazard to the health or safety of the public. OPPORTUNITY FOR PUBLIC HEARING Respondent has been given the opportunity for a public hearing. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission prays that notice be given and a hearing held to consider the violations referenced in this Complaint, and requests the Commission to thereafter enter an order: a. assessing Respondent an administrative penalty of $190,000.00 (violation of 49 CFR §192.13(c) at $10,000.00 per day for 17 days; violation of 49 CFR §192.603(b) at $20,000.00 and violation of 49 CFR § 192.613(b) at $0 penalty), or such other amount as may be established by law; b. directing Respondent to maintain, and modify as necessary, its risk model on which its leak -survey program for the Mesquite Pipeline System (System ID No. 610980) is based so as to identify and prioritize the steel service line replacement. The priority and ranking system for steel service line replacement shall be based upon the degree of hazard for such system or segment within such system. The risk model shall identify risk factors and determine the degree of hazard associated with those risk factors. c. directing Respondent to submit the time schedule for the remaining replacement using the risk model for the Mesquite Pipeline System (System ID No. 610980) within thirty (30) days for approval by Pipeline Safety Division. d. directing Respondent to submit plans for replacement including the method of replacement, materials selected, joining procedures, and plans to install excess flow valves at all replaced service line locations as applicable for the Mesquite Pipeline System (System ID No. 610980) within thirty (30) days for approval by Pipeline Safety Division. e. directing Respondent to conduct more frequent surveys for the Mesquite Pipeline J Original Complaint, GUD Docket No. 09981, page 6 System (System ID No: 610980) in those areas with the greatest potential for leakage and where leakage could be expected to create a hazard. The following factors, although not limited to, will be used to establish an increased frequency of leakage surveys in those areas that contain steel service lines: (i) pipe location, which means proximity to buildings or other structures and the type and use of the buildings and proximity to areas of concentrations of people; (ii) composition and nature of the piping system, which means the age of the pipe, materials, type of facilities, recent construction activities, operating pressures, leak history records, and other studies; (iii) the corrosion history of the service lines, which means known areas of significant corrosion or areas where corrosive environments are known to exist; (iv) environmental factors that affect gas migration, which means conditions that could increase the potential for leakage or cause leaking gas to migrate to an area where it could create a hazard, such as extreme weather conditions or events (significant amounts or extended periods of rainfall, extended periods of drought, unusual or prolonged freezing weather, hurricanes, etc.), particular soil conditions, unstable soil or areas subject to earth movement, subsidence, or extensive growth of tree roots around pipeline facilities that can exert substantial longitudinal force on the pipe and nearby joints; and (v) any other condition known to the operator that has significant potential to initiate a leak or to permit leaking gas to migrate to an area where it could result in a hazard, which could include construction activity near the pipeline, wall-to-wall pavement, trenchless excavation activities (e.g., boring), blasting, large earth-moving equipment, heavy traffic, increase in operating pressure, and other similar activities or conditions; f. directing Respondent to undertake all necessary measures to remove all high risk steel service lines and replace them with newer generation of service lines within onehundred eighty (180) days; and Original Complaint, GUD Docket No. 09981, page 7 g• any other relief as the Commission deems proper. Respectfully submitted, EI-91-re Moore, Stfff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 12760535 Telephone No. (512) 936-2301 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: July 16, 2010 (7/15%2010) Ela'ine Moore - AtmosI Cor1 From: To: Date: Subject: Attachments: t Elaine Moore Lowell Williams; Mary McDaniel 7/15/2010 3:49 PM Atmos Complaint GUDAtmos-MesquiteComplaint-FINAL.wpd The complaint, with the changes we discussed, is going out tomorrow. I am attaching a copy for your information. Page 1 (7/15/2010) E laine Moore - Re: Atmq - DRAFT Complaint From: To: Date: Subject: Mary McDaniel Moore, Elaine; Williams, Lowell 7/15/2010 10:18 AM Re: Atmos - DRAF1" Complaint page 1 under jurisdiction..... It is a distribution facility not a transmission facility... in the rule listing 3.70 pipeline permits does not apply, and under the page 4 initiate and carry out a program.... >>> Elaine Moore 7/13/2010 4:03 PM »> Attached is a rough draft of the complaint. Please note that in paragraphs (c) and (d) in the Prayer, I changed the date to August 30th instead of the July 30th deadline that we had in the consent order. I kept the Dec. 30th deadline the same. Let me know what you want to do with those dates. Also, Mary, I put there are no final orders outstanding against Atmos, but I'm not sure if that is correct or not. Otherwise, do with it what you will! ^tf:^ ' (y^` C-) ^=3 RAILROAD COMMISSION OF TEXAS GAS UTILITIES DOCKET NO. 09981 ENFORCEMENT ACTION AGAINST ATMOS ENERGY CORP., MID-TEX DIVISION (COMPANY ID NO. 6776) FOR VIOLATIONS OF PIPELINE SAFETY REGULATIONS (SAFETY EVALUATION NO. 20100703) AT THE MESQUITE PIPELINE SYSTEM (SYSTEM ID NO. 610980), DALLAS COUNTY, TEXAS ORIGINAL COMPLAINT Comes now, the Railroad Commission of Texas ("Commission") and files this Original Complaint charging Atmos Energy Corp., Mid-Tex Division (Company ID No. 6776) ("Respondent") with violations of Commission Pipeline Safety Regulations 49 CFR § 192.13(c), 49 CFR §192.603(b) and 49 CFR §192.613(b) at the Mesquite Pipeline System (System ID No. 610980), Dallas County, Texas, as set forth more fully below. JURISDICTION 1. The Commission has jurisdiction over this Respondent and these matters pursuant to TEX. NAT. RES. CODE ANN. §81 et seq., TEX. UTIL CODE ANN. §121.201 et seq. and § 121.206 et seq., and pursuant to 16 TEX. ADMIN. CODE §3.70 and § 8.1 et seq. Respondent is a "gas company" as that term is defined in § 121.001 TEX. UTIL CODE and by 16 TEX. ADMIN. CODE §8.5 (11). For the purposes of Chapter 121, Subchapter E of the Texas Utility Code, Respondent is a person as at term is defined by 16 TEX. ADMIN. CODE §8.5(21). The Mesquite Pipeline System (Syste I.D)No. 610980), operated by Respondent, is part of a gas pipeline facility as defined by 16 TEX. ADMIN. CODE §8.5(23) and is part of the gas company of Responde subject to 16 TEX. ADMIN. CODE §8.1 et seq. is the person who is responsible for the maintenance or operation a ^I, Responde iorn faci 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), l^TE^X. ADMIN. CODE § 8.1 (Tex. R.R. Comm'n, General Applicability and Standards) and 16 TEX. ADMIN. 0 (Pipeline-Permits Required). Respondent is not a gas pipeline facility or engaged in the transportation of gas which is subject to exclusive federal jurisdiction under the Natural Gas Pipeline Safety Act, 49 United States Code Annotated §§60101 et seq. As such, Respondent is responsible for compliance with applicable statutes and Commission Statewide Pipeline Safety Rules. Original Complaint, GUD Docket No. 09981, page 2 The notice of hearing required under Commission Rule 1.45 [Tex. R.R. Comm'n, 16 TEX. ADMIN. CODE § 1.45] may be served on Respondent by regular mail and by Certified Mail, Return Receipt Requested, to its attorneys of record: Ann M. Coffin and Mark Santos, Parsley Coffin Renner LLP, 98 San Jacinto Blvd., Suite 1450, Austin, Texas, 78701. PIPELINE SAFETY RULE 49 CFR §192.13(c) 1. Commission Pipeline Safety Rule 49 CFR §192.13(c) provides that each operator shall maintain, modify as appropriate, and follow the plans, procedures, and programs that it is required to establish under this part. Pursuant to 49 CFR § 192.615(a)(4), each operator shall establish written procedures to minimize the hazard resulting from a gas pipeline emergency. At a minimum, the procedures must provide for the availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency. Further, 49 CFR § 192.615(b)(3) provides that each operator shall review employee activities to determine whether the procedures were effectively followed in each emergency. 2.1. On Friday, November 20, 2009 at approximately 12:31 p.m., a house explosion occurred at 2505 Catalina Drive in Mesquite, Texas. In response to the incident, Respondent dispatched a technician to investigate the Leak Investigation Order (LIO). The technician had only one type of leak detection equipment at the incident site and, as a result, was unable to bar test due to wet soil conditions. By having only one type of leak detection equipment at the incident site, Respondent failed to use all leak detection equipment and appropriate personnel available in its investigation of the emergency. 2.2. The following workday, on Monday November 23, 2009, an Atmos supervisor reviewed the LIO which contained the notation that the incident was a possible carbon monoxide ("CO") explosion. Despite the fact that CO was considered a possible cause of the explosion, CO readings were not taken at the incident site, which was also noted in the LIO. In addition, Respondent failed to conduct any follow-up to the incident site even though bar testing had not been performed. By not causing its employees to take CO readings and to bar test, Respondent failed to review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency. • Original Complaint, GUD Docket No. 09981, page 3 2.3 On November 24, 2009, Respondent was put on notice by the homeowner's association that the November 20, 2009 incident was a natural gas explosion. In response, Respondent investigated the main and service line and detected a gas reading of 0.5% at the service tap. No leak was graded at this time nor was there a record made of the bar testing results. During this same check, Respondent found and graded at least three additional leaks. Thereafter, Respondent failed to continue with its investigation until December 7, 2010 which investigation was eventually performed in conjunction with the homeowner's insurance representatives. During the investigation, gas concentrations were detected and a Grade 1 leak was created for 2505 Catalina Dr., Mesquite, Texas, the site of the explosion. Respondent failed to detect and grade the leak for seventeen ( 17) days after the incident and initial call, - - '40rv% /\(01( 3. Z°, 2^ -,T°,? By failing to use all leak detection equipment and appropriate personnel available at the scene of the emergency; review its employees' activities to determine whether the procedures were effectively followed in investigating the emergency; and detect and grade the leak at the site of the emergency for seventeen (17) days, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.13(c). PIPELINE SAFETY RULE 49 CFR §192.603(b) 1. Commission Pipeline Safety Rule 49 CFR §1.92.603(b) provides that each operator shall keep records necessary to administer the procedures established under § 192.605. Pursuant to 49 CFR § 192.605(a), each operator shall prepare and follow for each pipeline a manual of written procedures for conducting operations and maintenance activities and for emergency response. In accordance with § 192.605(b), the manual required by paragraph (a) of this section must include procedures for operating, maintaining, and repairing the pipeline in accordance with each of the requirements of this subpart and subpart M of this part. 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that on leak reports regarding Leak No. 459302 at 2505 Catalina Dr; Leak No. 458826 at 2501 Catalina Dr; Leak No. 458825 at 2402 Luau Dr. and Leak No. 458824 at 3614 Palm Dr., Mesquite, Texas, the leak sketches did not indicate that bar testing was performed in each direction to 0%. Although the leak sketches show the migration pattern, they do not • Original Complaint, GUD Docket No. 09981, page 4 indicate that a 0% reading was obtained in each direction. Since, at least 2009, the Commission has advised Respondent that the leak grading and leak monitoring data were inadequate. 3. By failing to maintain leak grading and leak monitoring data - - records necessary for conducting operations and maintenance activities and for emergency response - Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.603 (b). PIPELINE SAFETY RULE 49 CFR §192.613(b) 1. Commission Pipeline Safety Rule 49 CFR §192.613(b) provides if a segment of pipeline is determined to be in unsatisfactory condition but no immediate hazard exists, the operator shall initiate a program to recondition or phase out the segment involved, or, if the segment cannot be reconditioned or phased out, reduce the maximum allowable operating pressure in accordance with 192.619(a) and (b). 2. Commission records and Commission Pipeline Safety Evaluation No. 20100703 conducted between December 8, 2009 and March 25, 2010 of Respondent's Mesquite Pipeline System show that, over the past several years, Respondent has experienced numerous incidents involving leaks from its steel service lines and their connections to the main or customer meter. Additionally, data submitted as part of the PS-951eak report reveals that, within the past year, Respondent has a leak rate of over 64% for its steel service lines in all leaks repaired within the Mesquite System. Said leak rate of 64% indicates the steel service pipeline involved is in unsatisfactory condition and poses a potential safety issue thereby demanding a program to recondition or phase out the steel service line . Gr,^-- 4f-c 3. By failing to initiaten,a program to recondition or phase out all high risk steel service lines and replace them witlh newer generation of service lines, Respondent violated Commission Pipeline Safety Rule 49 CFR § 192.613(b). PREVIOUS VIOLATIONS There are no final orders against the Respondent for previous alleged violations of Commission rules and regulations. PUBLIC HEALTH AND SAFETY Respondent's failure to comply with TEX. UTIL. CODE ANN § 121.201 or a safety standard or rule relating to the transportation of gas or gas pipeline facilities adopted under that section is Original Complaint, GUD Docket No. 09981, page 5 serious and constitutes hazard to the health or safety of the public. OPPORTUNITY FOR PUBLIC HEARING Respondent has been given the opportunity for a public hearing. PRAYER WHEREFORE, PREMISES CONSIDERED, the Commission prays that notice be given and a hearing held to consider the violation referenced in this Complaint, and requests the Commission to thereafter enter an order: a. assessing Respondent an administrative penalty of $190,000.00 (violation of 49 CFR §192.13(c) at $10,000.00 per day for 17 days; violation of 49 CFR §192.603(b) at $20,000.00 and violation of 49 CFR § 192.613(b) at $0 penalty), or such other amount as may be established by law; b. directing Respondent to maintain, and modify as necessary, its risk model on which its leak -survey program for the Mesquite Pipeline System (System ID No. 610980) is based so as to identify and prioritize the steel service line replacement. The priority and ranking system for steel service line replacement shall be based upon the degree of hazard for such system or segment within such system. The risk model shall identify risk factors and determine the degree of hazard associated with those risk factors. c. directing Respondent to submit the time schedule for the remaining replacementusin the risk model for the Mesquite Pipeline System (System ID No. 610980) b3^-A-^St . 200 for approval by Pipeline Safety Division. d. directing Respondent to submit plans for replacement including the method of replacement, materials selected, joining procedures, and plans to install excess flow valves at all replaced service line locations as applicable for the Mesquite Pipeline System (System ID No. 610980) by ^,uust 30, 2010 for approval by Pipeline Safety Division. e. ^ -,> .,, 1 directing Respondent to conduct more frequent surveys for the Mesquite Pipeline System (System ID No. 610980) in those areas with the greatest potential for leakage and where leakage could be expected to create a hazard. The following factors, Original Complaint, GUD Docket No. 09981, page 6 although not limited to, will be used to establish an increased frequency of leakage surveys in those areas that contain steel service lines: (i) pipe location, which means proximity to buildings or other structures and the type and use of the buildings and proximity to areas of concentrations of people; (ii) composition and nature of the piping system, which means the age of the pipe, materials, type of facilities, recent construction activities, operating pressures, leak history records, and other studies; (iii) the corrosion history of the service lines, which means known areas of significant corrosion or areas where corrosive environments are known to exist; (iv) environmental factors that affect gas migration, which means conditions that could increase the potential for leakage or cause leaking gas to migrate to an area where it could create a hazard, such as extreme weather conditions or events (significant amounts or extended periods of rainfall, extended periods of drought, unusual or prolonged freezing weather, hurricanes, etc.), particular soil conditions, unstable soil or areas subject to earth movement, subsidence, or extensive growth of tree roots around pipeline facilities that can exert substantial longitudinal force on the pipe and nearby joints; and (v) any other condition known to the operator that has significant potential to initiate a leak or to permit leaking gas to migrate to an area where it could result in a hazard, which could include construction activity near the pipeline, wall-to-wall pavement, trenchless excavation activities (e.g., boring), blasting, large earth-moving equipment, heavy traffic, increase in operating pressure, and other similar activities or conditions; f. directing Respondent to undertake all necessary measures to remove all high risk steel service lines and replace them with newer generation of service lines by_DPQPmhPr 3J, ( C-P -v 2-9t $"^nd L^ ^ ISS W)ei g. any other relief as the Commission deems proper. Original Complaint, GUD Docket No. 09981, page 7 Respectfully submitted, Elaine Moore, Staff Attorney Office of General Counsel RAILROAD COMMISSION OF TEXAS State Bar No. 12760535 Telephone No. (512) 936-2301 FAX No. (512) 463-6989 P. O. Box 12967 Austin, Texas 78711-2967 Dated: XXXX (7113/2010) Elaine Moore - Atmos - D^FT Complaint From: To: Date: Subject: Attachments: Elaine Moore Lowell Williams; Mary McDaniel 7/13/2010 4:03 PM Atmos - DRAFT Complaint GUDAtmos-MesquiteDraftComplaint.wpd Attached is a rough draft of the complaint. Please note that in paragraphs (c) and (d) in the Prayer, I changed the date to August 30th instead of the July 30th deadline that We had in the consent order. I kept the Dec. 30th deadline the same. Let me know what you want to do with those dates. Also, Mary, I put there are no final orders outstanding against Atmos, but I'm not sure if that is correct or not. Otherwise, do with it what you will! Page 1 Page 1 of 1 Becky Tate - Atmos Order From: To: Date: Subject: CC: Attachments: Becky Tate mark.santos@pcrllp.com 7/8/2010 3:45 PM Atmos Order Moore, Elaine GUD 09981 Atmos Modified OrderFINAL.docx Mr. Santos: As per Ms. Moore's instructions, attached please find a copy of the Atmos Order for your review. I have converted the text into a Word 2007 document. If your office is using a different version of Word, please let me know. I will be more than happy to convert the text and resend the Order to your office in a version your offices uses. Please let me know if I can be of further assistance. Sincerely, Becky Tate, Legal Assistant to: ELAINE MOORE, Staff Attorney Railroad Commission, Enforcement Section 512-463-4889 file://C:\Documents and Settings\TateR\Local Settings\Temp\XPgrpwise\4C35F2B4RRCM... 7/8/2010 (7/8/2010) Elaine Moore - Atmos From: To: Subject: Elaine Moore Lowell Williams; Mary McDaniel; Polly McDonald Atmos I talked to Mark and let him know that the July 12th deadline stands and we would not be withdrawing the steel line replacement issue from this case. He asked that I e-mail him a copy of our order so he can start working on proposed changes, which I take as a positive sign. I will keep you updated as to any further developments. Parsley Coffin Renner Post Office Box 13366 Austin, Texas 78711 A Limited Liability Partnership Telephone (512) 879-0900 Fax (512) 879-0912 June 24, 2010 RECEIVE® R.R.C. OF TEXAS JUN242010 Ms. Elaine Moore Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas 1701 N. Congress Austin, Texas 78701 Re: GAS &k:___;-n'ViC^^ DIVISION AUST;N, TEXAS GUD 9981; Enforcement Action against Atmos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System Dear Ms. Moore: Atmos Energy Corp., Mid-Tex Division has retained Parsley Coffin Renner LLP as counsel in the above-referenced docket. Please direct any future communications and filings to the undersigned: Ann M. Coffin Mark Santos Parsley Coffin Renner LLP 98 San Jacinto Blvd., Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) Thank you for your attention to this matter. 98 San Jacinto Boulevard, Suite 1450, Austin, Texas 78701 Parsley Cof#i Renner • A Limited Liability Partnership Post Office Box 13366 Austin, Texas 78711 Telephone (512) 879-0900 Fax (512) 879-0912 June 24; 2010 hECEIVED ^.r-^.r. OF JUN 2 4 2010 Ms. Elaine Moore Staff Attorney Office of General Counsel - Enforcement - Railroad Commission of Texas GAS Sa;-tas aOs ^ 6 IDiV^S10i^ P,IJv T 3^ , i c;^'^ 1701 N. Congress Austin, Texas 78701 Re: GUD 9981; Enforcement Action against Atmos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System Dear Ms. Moore: Atinos Energy Corp., Mid-Tex Division has retained Parsley Coffin Renner LLP as counsel in the above-referenced docket. Please direct any future communications and filings to the undersigned: Ann M. Coffin Mark Santos Parsley Coffm Renner LLP 98 San Jacinto Blvd., Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) Thank you for your attention to this matter. 98 San Jacinto Boulevard, Suite 1450, Austin, Texas 78701 Parsley Cof#i Renner A Limited Liability Partnership Post Office Box 13366 Austin, Texas 78711 Telephone (512) 879-0900 Fax (512) 879-0912 June 24, 2010 Ms. Elaine Moore Staff Attorney Office of General Counsel - Enforcement Railroad Commission of Texas RECEILtEQ R.R.C. OF Tr7-A c JUN 2 4 2010 GAS v^jt.;^6 uiyislo;,, AUSTIN, TEXAS 1701 N. Congress Austin, Texas 78701 Re: GUD 9981; Enforcement Action against Atmos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System Dear Ms. Moore: Atmos Energy Corp., Mid-Tex Division has retained Parsley Coffin Renner LLP as counsel in the above-referenced docket. Please direct any future communications and filing's to the undersigned: Ann M. Coffin Mark Santos Parsley Coffin Renner LLP 98 San Jacinto Blvd., Suite 1450 Austin, Texas 78701 512/879-0900 512/879-0912 (fax) Thank you for your attention to this matter. 98 San Jacinto Boulevard, Suite 1450, Austin, Texas 78701 ;(6/24/2010) Elaine Moore - Atmos From: To: Date: Subject: Elaine Moore Lowell Williams 6/24/2010 3:52 PM Atmos I talked to their attorney, Mark Santos, here in Austin. He said the company is so skittish after hearing Comm. Williams at conference this week that they don't want to do anything or engage in any serious settlement discussions until after they see what the commission does on July 6th. He said they definitely want to explore a settlement but are frightened at what the commission might do after the last conference. He did say there are 52 crews working on the Mid-Tex system as a whole though he couldn't say whether or not that includes Mesquite. Page 1 ,^ o"Ar"', ,(- )C__ ^- ^-76 - -^i ^^- ^^-el_^ - ; (-) ey -6z)- ccn4^ cc^.S. <:,-nl i ^C^'t ^ r6NC^'e ^e^ , ----WS. - qT- l,t^ F^ 01 ^ ^ From: To: CC: Date: Subject: Elaine Moore Mary McDaniel Lowell Williams 6/7/2010 3:10 PM Atmos The settlement offer/proposed order went out in today's mail. l.t^'44) ,^^^ ^ ^^ ^ ^ V OY April 29, 2010 John Paris President Mid-Tex Division Chairman Victor Carrillo Commissioner Elizabeth Ames Jones Commissioner Michael L. Williams Railroad Commission of Texas 1701 N. Congress Austin, Texas 78701 Re: Replacement of Steel Service Lines in the Atmos Mid-Tex Service Territory Dear Commissioners: During the Commission's recent conferences, there have been questions raised regarding the speed at which Atmos Energy Corporation ("Atmos" or "the Company") is acting to replace steel service lines within its Mid-Tex service territory. I write to assure you that system safety and reliability is the foundation on which our Company is based. We take this responsibility seriously and our efforts to replace steel service lines within the Mid-Tex Division are already underway. This correspondence provides an update of the Company's progress on its steel service line replacement initiative. First, I want to make clear that Atmos, as part of its ongoing surveillance activities and routine maintenance, takes action to replace any steel service lines that do not meet the Commission's rigorous safety requirements. Based on discussions with the Commission's Safety Division Staff, Atmos supplemented its internal workforce beginning in January, 2010, with third party crews that are dedicated to steel service line replacement. As of today, this third party workforce has grown to 32 crews. Atmos is committed to increasing this number to 50 crews by June. Atmos is also working diligently with yoiur Safety Division Staff, the City Coalitions that comprise the Atmos Cities Steering Committee ("ACSC") and Atmos Texas Municipalities ("ATM"), and the City of Dallas to develop a comprehensive plan for the replacement of steel service lines. Beginning in January 2010, Atmos representatives have met with Commission Safety Division Staff on at least ten occasions to discuss the critical components of the program, and incorporated Safety Division suggested refinements to the Company's risk model that is used to identify the priority of replacement of steel service lines, Atmos has also been working collaboratively with its city regulators. As you are aware, Atmos has, in recent years, realized unprecedented success by partnering with its cities to find ways that enhance the safety and reliability of the Mid-Tex system in a manner that also preserves the financial integrity of the Company. The result has been a win-win for all concerned and the Company is committed to maintaining these relationships just as it is committed to its customers, its communities, and this Commission. Since early March, 2010, Atmos Energy Corporation P.O. Box 223705, Dallas, Texas 75222-3705 P 214-206-2800 F 214-206-2126 john.paris@atmosencrgy.cora Atmos has held multiple meetings with representatives of ACSC and ATM to discuss: (a) the Company's ongoing replacement efforts; (b) the Commission's desire to establish a comprehensive steel service line replacement program; (3) the details of the Company's risk model; and (4) proposed cost recovery mechanisms. Similar discussions have taken place with the City of Dalias. I also want to make clear that Atmos' efforts to date have and will continue to be driven by pipeline safety. At the same time, the significance of having the full participation of our cities in this process cannot be understated or ignored. Pipeline safety projects of this magnitude necessarily require the Company and its city regulators to consider the cost recovery and rate impact aspects of this type of prograin and to coordinate this work with other ongoing non-gas utility construction projects. As the Commission is aware, the cities have exclzrsive jurisdiction over their streets and right of ways, as well as ariginal jurisdiction over the rates Atnzos charges to Its ratepayers that reside in those cities. Before any steel service line replacement involving street cuts or trenching can take place, city personnel must mark the city-owned utility services and city permits must be obtained. For this reason, Atmos is obligated to include its cities in the process of implementing a comprehensive replacement program so as to ensure that the program is carefully coordinated to both mitigate street and right-of-way disruptions and allow timely cost recovery in a way that does not place undue burden on ratepayers. In sum, the Commission needs to know that Atmos is dedicated to the steel service replacement activities that are already taking place within the Mid-Tex service territory and to continuing the discussions with Commission Staff and its city regulators. Both the Commission and the cities Atmos serves will play an essential role in guaranteeing that the Company's steel service replacement efforts occur in an orderly and carefully coordinated manner that recognizes the Company's commitment to safety while also maintaining its financial integrity. These are important decisions that will affect generations of ratepayers and the issues demand careful and deliberate consideration by all stakeholders. For this reason, Atmos fully supports the sentiments expressed in correspondence sent by ACSC and ATM, which asks the Commission to allow the Company and its cities the time necessary to reach agreement on the vital aspects of steel pipe replacement, ohn Paris President, Mid-Tex Division Atmos Energy Corporation cc: Mary McDaniel Geoffi-ey Gay Norman Gordon Alfi•ed Herrera HERRERA + BOYLEPLLC ky`ic CaF--"'""k APIT -14. April 14, 2010 S, b'a j` "` Hon. Michael Williams Commissioner Railroad Commission of Texas 1701 N. Congress Austin, Texas 78701 Re: GUD 9948 - Atmos - Replacement of Service Lines Dear Commissioner Williams: Thank you for the time you spent with me regarding the replacement of steel service lines by Atmos Mid-Tex. in its service area. As you know our firm represents a group of cities referred to as the Atmos Texas Municipalities (ATM) served by Atmos' Mid-Tex division. I greatly appreciated your time and the commitment you have exhibited toward the issue and to your willingness to consider the concerns the municipalities we represent have raised. As we discussed, no one in this process is minimizing the issue of safety that the presence of steel service lines may pose. However, the ATM cities we represent were contacted by Atmos just over a week ago and are in the first stages of understanding the scope of the issue and its many impacts. First and foremost, I want to assure you that our cities are working with Atmos in earnest to address the issue of replacement of steel service lines. We have had several conversations with Atmos' representatives to exchange information regarding this project, including data regarding the number of lines in question, the location of those lines, identification of those lines that may pose the highest risk, and how Atmos determined which lines posed the higher risk. We have also inquired of Atmos as to the cost to replace the lines and Atmos' ability to supply an adequate level of personnel to undertake this project. And for the reasons I note below, our cities ask that you provide Atmos and the cities a month to six weeks to attempt to arrive at a resolution to address the, safety concerns you've identified, in a manner that is manageable by both Atmos and the cities and its ratepayers. 1 Our cities' concerns fall into three general categories: (1) ensuring that the stakeholders have properly identified the highest-risk service lines; (2) the impact of day-to-day operations of the cities; and (3) the impact on customers' rates. Stated in very general terms, it is our understanding that the investment needed to replace the steel service lines would be in the neighborhood of $935 million, an amount that is above and beyond Atmos' "normal" spend levels for its system. PROPER IDENTIFICATION OF HIGHEST RISK SERVICE LINES As I noted above, no one is minimizing the need to ensure a safe gas distribution system. But based on our discussions with Atmos, we are of the understanding that some service lines pose a greater risk than others. We want to ensure that whatever plan of action is pursued addresses the safety concerns that may exist and that it does so in the most efficient, cost-effective manner, that maximizes safety. IMPACT OF DAY-TO-DAY OPERATIONS OF THE CITIES Based on data Atmos has provided us, the number of work crews to accomplish this project is well above that which Atmos currently keeps on its payroll. The work involved would result in an enormous increase in, for example, the number of street cuts that is magnitudes higher in number than the cities - and Atmos - currently experience year to year. All of this in turn affects the cities' day-to-day operations. As you are likely aware, most if not all cities, are going through some very tough economic times with significant belt tightening. Many of our cities are either experiencing hiring freezes, are furloughing personnel, are offering early retirements, or taking other cost-cutting measures to maintain a balanced budget. The increase in permitting activity, actual street cuts, pre- and postinspections of work done to remove and re-install lines, all places an immense strain on our cities' budgets. Additionally, the disruption caused from the multiple street cuts over wide areas of a city cannot be minimized. Undoubtedly, the street cuts could well have a negative affect on commerce, too. IMPACT ON CUSTOMERS' RATES Accepting at face value Atmos' valuation of the investment, an influx of that level of investment into rates will undoubtedly cause "rate shock" to many of our ratepayers. Based on recent information Atmos submitted to the cities, Atmos shows a net investment of about $1.4 billion at the end of December 2009. Adding $935 million to its rate base cannot help but create rate shock. While we recognize that a decision to undertake the replacement program does not resolve the issue of rate treatment, it is obviously an issue on the fronts of many minds, both at Atmos and at the cities, and at the Commission. Many questions remain regarding cost recovery including, what portion of the cost should be borne by Atmos and what portion borne by ratepayers? Over what time period will the program be implemented? Should all ratepayers pay a uniform rate? What is the nature of any cost-recovery mechanism associated with the replacement plan: are 2 14 such rates "interim" in nature and thus subject to reconciliation in a future proceeding? While we have an estimate from Atmos for the cost to replace all the lines, what is the cost for addressing those more critical lines first and addressing the remainder of the system over a The cities need data that address these questions to make more informed longer period? decisions. And many of these questions can likely be answered by Atmos and are questions to which the cities are awaiting answers. In light of the magnitude of this project and given that Atmos first presented this issue to the ATM cities the week of April 5, 2010, our cities respectfully ask that you provide the cities an opportunity to attempt to identify a resolution that addresses not only the issue of safety, first and foremost, but that does so in a more manageable manner taking into account the very practical concerns that Atmos and the cities will face in implementing a broad-scale service-line, replacement project, both from an operational perspective as well as taking into account the impact on rates such a project will have. I thank you for your attention to this matter and for your consideration of our cities' concerns. I look forward to working with you and your staff on this matter. Please do not hesitate contacting me if you have any questions of me or need additional information from me. Retectfully, \1 Al red R. Herre xc: Jk^^'"f Hon. Victor Carrillo, Chairman, Railroad Commission of Texas Hon. Elizabeth Jones, Commissioner, Railroad Commission of Texas Ms. Mary McDaniel, Director Mr. Douglas C. Walther (Atmos) 3 LINDIL C. FOWLER, JR., GENERAL COUNSEL LOWELL E. WILLIAMS, DIRECTOR VICTOR G. CARRILLO, CHAIRMAN ELIZABETH A. JONES, COMMISSIONER ENFORCEMENTSECTION MICHAEL L. WILLIAMS, COMMISSIONER RAILROAD COMMISSION OF TEXAS OFFICE OF GENERAL COUNSEL June 7, 2010 Ms. Patti Richards, V. P. Technical Services Atmos Energy Corp., Mid-Tex Division PO Box 223705 Dallas, Texas 75222-3705 Via Regular and Certified Mail Return Receipt No. Re: 91 7108 2133 3938 220? 0263 OFFER OF SETTLEMENT - GUD 09981; Enforcement Action Against Atmos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Mesquite Pipeline System Dear Ms. Richards: Please be advised that the above-referenced case has been referred to the Commission's Enforcement Section to collect an administrative penalty and to obtain compliance from Atmos Energy Corp., Mid-Tex Division ("Atmos") with violations of 49 CFR 192.13(c) [plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified or followed as necessary]; 49 CFR 192.603(b) [records necessary to administer the operation and maintenance plan were not maintained or were inadequate]; and 49 CFR 192.613(b) [pipeline segments were found in unsatisfactory condition, but there was no program to recondition or phase out the segments]. These violations were cited during a safety evaluation of Atmos' Mesquite system conducted between December 8, 2009 and March 25, 2010 (Safety Evaluation No. 20100703). Specifically, Atmos was found to be in violation of 49 CFR 192.13 (c) for failing to properly enact emergency plan procedures during the investigation of the explosion at 2505 Catalina Drive in Mesquite, Texas, which occurred on November 20, 2009. Atmos not only failed to use all possible leak detection equipment and personnel at the incident site but also failed to investigate the cause of the explosion, detect gas concentrations, and create a Grade 1 leak for the explosion'site until seventeen (17) days after the initial call. Violations of 49 CFR 192.603(b) were cited as a result ofAtmos' repeated failure to maintain leak grading and leak monitoring data as exemplified in Leak Nos. 459302; 458826; 458825; and 458824 in which Atmos failed to indicate that bar testing was performed in each direction to 0% on the leak sketches. Lastly, data submitted as part of the PS-95 leak report reveals that Atmos has a leak rate of over 64% for its steel services in all leaks repaired within the Mesquite system in the past year. This rate of leak detection indicates a potential safety hazard and the need for an expedited program to recondition or phase out the steel service lines within the Mesquite systems as required by 49 CFR 1701 NORTH CONGRESS AVENUE TDD 800-735-2989 OR TDY 512-463-7284 AUSTIN, TExAS 78711-2967 POST OFFICE Box 12967 AN EQUAL OPPORTUNITY EMPLOYER Fnx: 512/463-6989 PHONE: 512/463-6762 http://www.rrc.state,tx.us • June 7, 2010 Ms. Patti Richards - GUD 09981 Page Two 192.613(b). Although Atmos has begun to replace the steel service lines with new service lines within the Mesquite system, a comprehensive steel service line replacement program providing risk ranking for replacement, date specific time frames for removal, and provisions for increased leakage surveys in the Mesquite system must be implemented. Should this case go to hearing, Enforcement would be seeking an order for compliance and a recommended penalty of not less than $190,000.00 (violation of 49 CFR 192.13(c) at $10,000.00 per day for 17 days and violation of 49 CFR 192.603(b) at $20,000.00, with zero penalty requested for violation of 49 CFR 192.613(b)). However, if by or before July 12, 2010, Atmos pays a settlement penalty amount of $95,000.00 (50% reduction of the penalty which would otherwise be requested at hearing) and brings the referenced violations into compliance and is amenable to implementing an expedited steel service line replacement program within the Mesquite system as elaborated in the attached proposed Stipulation, Agreed Settlement And Consent Order, Enforcement would be willing to recommend the Commission settle the case on such terms. For your information, the penalty must be paid by check made payable to the Railroad Commission, reference GUD No. 09981 and be sent to the Railroad Commission, Attn: Enforcement at 1701 N. Congress Ave., P.O. Box 12967, Austin, Texas, 78711. Please be advised that if I do not receive the settlement penalty amount, confirmation of compliance and the executed Stipulation, Agreed Settlement And Consent Order by no later than 5:00 p.m. on Monday, July 12th, this offer will be deemed to have been rejected and a formal Complaint will be filed. At such time, there will be no opportunity for further negotiations. If you have any questions, do not hesitate to contact me. Sincerely, aine Moore, Staff Attorney Office of General Counsel - Enforcement Phone: (512) 936-2301 Page 1 of 1 Ship Request File Copy Only. Texas Procurement And Support Service Tracking 9171082133393822070263 To: From: Name: Department: Becky Tate 455 RRC/OGC-Enforcement section Ship To 1: Ship To 2: Patti Richards, V.P. Technical Services Atmos Energy Corp., Mid-Tex Division Phone: 463-4889 Address: P. O. Box 223705 Remarkl: Remark2: EMM: GUD 09981 Dallas, TX 75222 Remark3: Country: Reference: US Special Instructions: Requested Date: 6/7/2010 3:05:34 PM To print this form: 1) Click the Print button. (Print two copies, one to attach to your package and one to keep for your records.) 2) Place the form in a waybill pouch or attach it to your shipment so that the barcode portion of the page can be read and scanned, Print Close Form (1 of 1) http://pbtx.g 1.com/dems/(S(21 pq2o45eenxdzipdz4vcvio))/ShipRequestFinal.aspx?demsid=... 6/7/2010 VICTOR G. CARRILLO, Chairman ELIZABETH A. JONES, Commissioner MICHAEL L. WILLIAMS, Commissioner 0 0 r ( A^ MARY L. McDANIEL, P. E. DIRECTOR SAFETY DIVISION RAILROAD COMMISSION OF TEXAS Pipeline Safety Division July 2, 2010 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: 102051 ATMOS ENERGY/MESQUITE (All correspondence must include the Inspection Package Number) Dear Ms. Patti Richards: We have received your letter of May 27, 2010 which outlines the actions planned to correct the alleged violation(s) found during the above-referenced inspection. After reviewing your correction plan, our staff has determined that revisions are necessary. The attached page(s) itemize the violations from our letter dated Apri128, 2010 and, where specified, revisions are required. The information requested must be sent to this office by August 2, 2010. If you have any questions or need assistance, do not hesitate to contact Alfred Garcia, Jr in the Fort Worth Regional Office at (817) 882-8966. 4 C)QSZ. ^ ^c _.., ^ ^UrvGRESS 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 Railroad Commission Safety Division Required Revisions to the Plan of Correction (POC) Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized Accident Evaluation Number: 20100703 Item Number: 1 Description: 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) POC Revision: In your response of May 27, 2010, you indicate that there was not any leak detection equipment available to ATMOS to overcome the wet soil conditions. Furthermore, you letter you indicate that the technician eliminated all potential sources such as sewer and customer piping, but relied on visual inspection only to determine if there was a leak on the natural gas piping. The specific violation requires that all equipment and personnel necessary to respond to the event be made available. Pipeline Safety is suggesting that due to prior events and incidents involving leaks from ATMOS facilities in similar wet soil conditions, it may have been necessary to expose the main and/or service lines in the area to rule out the possibility of a leak on the ATMOS natural gas facilities and provide additional personnel to accomplish this. It is our understanding that the responding technician had only one form of leak detection equipment available and did not consider the use of other equipment nor did he request additional personnel to assist in the investigation of the house explosion. Additionally, Pipeline Safety would suggest revisions to procedures to allow for the shut in or pressure testing of the natural gas main and service lines in the affected area to rule out the possibility of any leaks on the natural gas piping system owned and operated by ATMOS. As the technician ruled out potential sources, what additional steps were conducted by ATMOS to rule out the ATMOS facilities as a potential source of natural gas for the house explosion? Also, please provide a copy of the protocols developed for wet weather condition investigations mentioned in your response. Railroad Commission Safety Division Required Revisions to the Plan of Correction (POC) Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized Accident Evaluation Number: 20100703 Item Number: 1 cont'd. ATMOS' response to the incident on 11/20/2009 did not include bar testing of the area. ATMOS has repeatedly stated that wet soil conditions prevented the bar testing on that date. During the supervisory review on 11/23/2009, the supervisor did not request that the bar testing be completed. ATMOS' further investigation into this incident was based on receipt of the letter from the homeowners insurance company. Again, recognizing that 0.5% gas was found at the service tap, with the wet soil conditions, and past experiences involving ATMOS facilities, it is not unreasonable to expect further leak investigation techniques be deployed in this situation. It was not necessary to have access to the customer's property to investigate this leak. Item Number: 2 Description: Records necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603 (b) POC Revision: In reviewing the three leak investigation reports again, there is no indication that the gas migration was investigated to 0% in every direction. The reference to the section on the form is exactly that, part of the form. The note indicates the perimeter is the migration on two LIO's the third is left blank; again; no 0% noted and no points in between to determine or establish the 0% perimeter. 0 Railroad Commission Safety Division Required Revisions to the Plan of Correction (POC) Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized Accident Evaluation Number: 20100703 Item Number: 3 Description: 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) POC Revision: The Pipeline Safety staff disagrees with your position regarding the carbon monoxide task qualifying as a covered task. Any incident that may involve natural gas is investigated under the operations and maintenance provisions of 49 CFR Part 192. The comments regarding the LIO report are appreciated. Our note was based on the preliminary findings from the ATMOS technician as well miscellaneous findings regarding carbon monoxide. Based on the documentation on the ATMOS forms, it would appear that some documentation to deny this information would be warranted. Additionally, when investigating any abnormal operating condition, information regarding C02 is necessary. Item Number: 4 Description: The listed pipeline segment(s) was found in unsatisfactory condition, but there was not program to recondition or phase out the segment(s). Requirement: 49 CFR 192.613 (b) POC Revision: The Pipeline Safety Section agrees that ATMOS has initiated a program to recondition or phase out steel service line segments. As a matter of record, this alleged violation is based on the status of the ATMOS replacement at the time of the incident and incident investigation. Please indicate the proposed number of services and the anticipated time schedule for completion. As noted, ATMOS began system wide service line replacements in January 2010. We acknowledge that we continue to work with ATMOS to reach an agreement for a statewide replacement program extending beyond the already dedicated 52 crews. Jeff Knights Vice President, Operadons Mid-Te.x Division Auge}st 4, 2010. Ms. aulary.McDanieL, P.E. 1Di.rector, SafetyDivision. Railroad Comrti.issioil of Texas P 0 Box I2.967 .A.ti,^;tiri TX 78 711 .Re. Atmos Energy Corporation, Mid-Tex Division Pipeline Safet)rEvaluation No. 2,0100703 1i7,^pcc.tion I'ack^oc 'No. I020:5I Mescluite T)ea:r Ms. Mc.Daniel: The ptupase offilais letter is to advise you that the law firm of Parsley Coffin. Renner represents A,tr.ta.os. EnergyCo.rla6ratio.rt, Mid-Tex L?ivisi,on in the referenced, matter. Please direct all fu.tuxe correspondence in. this matter to: Ms. Ann Coffin Parsley Coffin Renner .98 San Jacinto B1vd Suite 1450 Austiai,. Texa.s 78701 . Yors truly, Te.ff:kn;igh°ts Vice President, Operations A,tmos.rnergy Corianration P. 0. $a.x 2237Q5, Da31as,.Texas 75222-3745 P-21:4-20-2701 C214-2064726 jeff_knighfsCQ?atmoseierg}!cam In addition, beginning in January, 2010, Atmos Energy acted to supplement its internal workforce with third party crews that are dedicated to steel service line replacement. As of July 30, 2010, Atmos had 57 third party crews dedicated to steel service line replacement. This represents an expansion of the Company's original commit to dedicate 52 crews to steel service line replacement by June 2010. Atmos Energy representatives have also successfully worked with Commission Safety Division Staff to reach agreement regarding critical components of the Company's risk model that is used to identify the priority of replacement of steel service lines. To further the efforts that the Company has already undertaken, Atmos is working diligently with the Commission's Safety Division Staff, the City Coalitions that comprise the Atmos Cities Steering Conunittee ("ACSC") and Atmos Texas Municipalities ("ATM"), and the City of Dallas to develop a comprehensive plan for the replacement of steel service lines throughout the Mid-Tex. service territory. Municipal participation in Atmos Energy's steel service line replacement initiative is essential to both mitigate street and right-of-way disruptions and allow timely cost recovery in a way that does not place undue burden on customers. In recognition of this fact, Atmos Energy, has since early March, 2010, held multiple meetings with representatives of ACSC, ATM, and the City of Dallas to discuss, among other things, the Company's ongoing steel service line replacement efforts and the details of the Company's risk model. Atmos Energy is committed to continuing to work with the Commission and its city regulators to reach agreement on vital aspects of steel pipe replacement that are necessary to further accelerate the replacement of steel service lines in the Mid-Tex service territory. In conclusion, Atmos Energy regrets the loss of life and property that occurred as a result of this incident. For the reasons stated above, Atmos Ener^y does not agree that it violated any of the code requirements cited in the Commission's July 8t' Report. As always, Atmos Energy looks forward to working with the Commission to address the matters set forth in the Commissions' investigation report and safety evaluation. Atmos Energy is, and continues to be, dedicated to providing the safest and highest quality service to our customers. If you have questions, or if I may provide you with more information, please do not hesitate to contact me. Rad Coo Vice President, Operations RECEIVED RRC OF TCXP.S AUG 05 2010 SAFETY D1V1si()j% AUSTdN, TEXAS • P ar sley Co f f in Renner A. T.irnited Liability Partnership Post Office Box 133:6G Austiia,. Tex ' as 78711 Telephone (512) 879-0900 Fax (512) 879-0912 August 2, 2010 Ms. Mary McDan,iel. .Director, Safety Division Railroad Comm"rssion of Texas 1701.N. Congress Austiin, Texas: 78701 Re: Atmos Energy Corporation, Mid-Tex Division Pipeline Safety Evaluation No. 20100703 intiii Vaokage No.:1:0,2051 Mesquite Dear Ms. McDaniel: Atmos Energy Corp., Mid-Tex. Division ("Atmos" or "the Company") has received your letter dated July 2, 201.0 regarding the Company's 1V.[ay, 27,, 2010 response to the referenced safety evaluation. In your correspondence, you propose revisions to the Company's correction plan, and request that the Company provide a copy of the protocols it has developed for wet weather investigations. As you know, the Commission has initiated a contested case involving Safety Evaluation No. 20100703, which has been dodketed as GUD 9981; Enforcement 4ction against Atrnos Energy Corp., Mid-Tex Division for Violations of Pipeline Safety Regulations at the Allesquite Pipeline System. This enforcement action was initiated in response to. a request by -the Commissiori's Pipeline Safety Division. Given the p'ending status of this enforeement action, the Company does not, feel that it is appropriate to address any issues involving this matter outside the context of that proceeding. The Company does, however, look forward to working with the Commission in a manner that will allow the parties to reach a mutually agreeable resolution of the issues involved .in GUD No. 9981. In the meantime, I wish to assure you and the Commission that Atmos Energy is,. and continues to be, .dedicated to providing the safest and highest quality service to our customers. AMCl1tr 98 San Jacinto 33oulevard, Suite 1450, Austin, Texas 78701 VICTOR G. CARRILLO, Chairman ELIZABETH A. JONES, Commissioner MICHAEL L. WILLIAMS, Commissioner MARY ROSS McDONALD ACTING DIRECTOR RAILROAD COMMISSION OF TEXAS Pipeline Safety Division June 29, 2010 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: 102051 ATMOS ENERGY/MESQUITE (All correspondence must include the Inspection Package Number) Dear Ms. Patti Richards: We have received your letter of May 27, 2010 which outlines the actions planned to correct the alleged violation(s) found during the above-referenced inspection. After reviewing your correction plan, our staff has determined that revisions are necessary. The attached page(s) itemize the violations from our letter dated Apri128, 2010 and, where specified, revisions are required. The information requested must be sent to this office by July 29, 2010. If you have any questions or need assistance, do not hesitate to contact Alfred Garcia, Jr in the Fort Worth Regional Office at (817) 882-8966. Sincerely, Mary Ross McDonald Acting Director Enclosure: POC Revision List 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 4) 12/7/10 8:32 AM Railroad Commission 1101 Safety Division Page 1 of 2 Required Revisions to the Plan of Correction (POC) All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 Activity/Classication: Specialized/Accident System Name: MESQUITE Evaluation Number: 20100703 Item Number: I Description: 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) POC Revision: In your response of May 27, 2010, you indicate that there was not any leak detection equipment available to ATMOS to overcome the wet soil conditions. Furthermore, you letter you indicate that the technician eliminated all potential sources such as sewer and customer piping, but relied on visual, inspection only to determine if there was a leak on the natural gas piping. The specific violation requires that all equipment and personnel necessary to respond to the event be made available. Pipeline Safety is suggesting that due to prior events and incidents involving leaks from ATMOS facilities in similar wet soil conditions, it may have been necessary to expose the main and/or service lines in the area to rule out the possibility of a leak on the ATMOS natural gas facilities and provide additional personnel to accomplish this. It is our understanding that the responding technician had only one form of leak detection equipment available and did not consider the use of other equipment nor did he request additional personnel to assist in the investigation of the house explosion. Additionally, Pipeline Safety would suggest revisions to procedures to allow for the shut in or pressure testing of the natural gas main and service lines in the affected area to rule out the possibility of any leaks on the natural gas piping system owned and operated by ATMOS. As the technician ruled out potential sources, what additional steps were conducted by ATMOS to rule out the ATMOS facilities as a potential source of natural gas for the house explosion? Also, please provide a copy of the protocols developed for wet weather condition investigations mentioned in your response. ATMOS' response to the incident on 11/20/2009 did not include bar testing of the area. ATMOS has repeatedly stated that wet soilconditions prevented the bar testing on that date. During the supervisory review on 11/23/2009, the supervisor did not request that the bar testing be completed. ATMOS' Item Number: 2 Description: Records necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603(b) POC Revision: In reviewing the three leak investigation reports again, there is no indication that the gas migration was investigated to 0% in every direction. The reference to the section on the form is exactly that, part of the form. The note indicates the perimeter is the migration on two LIO's the third is left blank; again, no 0% noted and no points in between to determine or establish the 0% perimeter. 0 Railroad Commission Safety Division 12/7/10 8:32 AM 0 Page 2 of 2 Required Revisions to the Plan of Correction (POC) All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 Activity/Classication: Specialized/Accident System Name: MESQUITE Evaluation Number: 20100703 Item Number: 3 Description: 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) POC Revision: : The Pipeline Safety staff disagrees with your position regarding the carbon monoxide task qualifying as a covered task. Any incident that may involve natural gas is investigated under the operations and maintenance provisions of 49 CFR Part 192. The comments regarding the LIO report are appreciated. Our note was based on the preliminary findings from the ATMOS technician as well miscellaneous findings regarding carbon monoxide. Based on the documentation on the ATMOS forms, it would appear that some documentation to deny this information would be warranted. Additionally, when investigating any abnormal operating condition, information regarding C02 is necessary. Item Number: 4 Description: The listed pipeline segment(s) was found in unsatisfactory condition, but there was no program to recondition or phase out the segment(s). Requirement: 49 CFR 192.613(b) POC Revision: : The Pipeline Safety Section agrees that ATMOS has initiated a program to recondition or phase out steel service line segments. As a matter of record, this alleged violation is based on the status of the ATMOS replacement at the time of the incident and incident investigation. Please indicate the proposed number of services and the anticipated time schedule for completion. As noted, ATMOS began system wide service line replacements in January 2010. We acknowledge that we continue to work with ATMOS to reach an agreement for a statewide replacement program extending beyond the already dedicated 52 crews. :TMOS energy Patti Richards Vice President Technical Services r% May 27, 2010 Ms. Mary McDaniel Director, Safety Division Railroad Commission of Texas 1701 N. Congress Ave., 9`h Fl. Austin, Texas 78701 Re: ^i Y11 E ^ RRIC 0=" T w^^Als Op'.^EW i~ AU: Ta:1, Atmos Energy Corporation, Mid-Tex Division Pipeline Safety Evaluation No. 20100703 Inspection Package No. 102051 Mesquite Dear Ms. McDaniel: This letter is written in response to the Commission's April 28, 2010 Report concerning the referenced safety evaluation. Atmos Energy disagrees with the conclusions reached by the Commission. Atmos Energy's actions with regard to this incident met or exceeded all applicable code requirements. Atmos Energy responds to the individual alleged violations as set forth below. Alleged Violation Item No. 1. Plans, procedures and/ol" programs required by Part 49 CFR 192 were not maintained, I ,Imodified, or followed as necessary. Requirement: 49 CFR 192.13(c) ^I I^ ^ $ote Item 1(a): Emergency Plan 1`l he Common ' s April 28 ^ Report all eges that Atmos Energy v i o l ated 49 CFR 19 .^1 ^(c) on November 20, 2009, by failing to enact emergency plan procedures. Specifically, ission's April 28th Report contends that Atmos Energy's technician should have used the all e' detection equipment and personnel available to further investigate the incident. Contrary to the allegation, Atmos Energy did, as required by 49 CFR 192.13(c), have available personnel, equipment, tools, and material present at the incident site on November 20, 2009. As the Commission is aware, weather conditions and main placement at the incident site contributed to unique operating conditions that prevented successful bar testing on this date. In its April 281h Report, the Commission recognizes that 1.98 inches of rainfall had fallen in Mesquite on November 20, 2009. This level of rainfall, coupled with prior days of similarly wet conditions, Atnibs Energy Corporation P. O Box 223705 Dal(^s, TX 75222-3705 P 21^-206-2807 F 214-206-2126 patti.richards@atmosenergy.com as well as placement of the gas main at 48" below the surface resulted in conditions, : which regardless of equipment and personnel availability, rendered leak detection impossible. In fact, Atmos 'Energy is unaware of any leak detection equipment that would have allowed the Company to perform accurate leak detection testing on November 20, 2009, given the wet soil conditions present at the incident site. Because the rain saturated soil prevented the use of combustible gas indicator ("CGI") equipment below ground level, the Atmos Energy technician contacted his supervisor pursuant to existing protocol and interrupted gas service at the meter located at the rearj property line. In lieu of CGI testing due to soil conditions, the Atmos Energy technician remained on-site and conducted a visual inspection to identify the presence of a gas leak. No visual indications of a gas leak were observed. In addition,, as acknowledged in the Comrnission's April 28th Report, the Atmos Energy technician tested the house piping and found no leaks; The sewer vent was also checked and no gas was detected. Further, the Atmos Energy technician used a CGI to survey above ground level and no gas was detected. Each of the actions undertaken by the Atmos Energy technician complied with existing protocols set forth in the Company's Operations and Maintenance Manual. Nevertheless, and without admitting any violation of 49 CFR 192.13(c), Atmos Energy has provided employee training to Mid-Tex operations technicians, officers, directors, managers, and supervisors that establish additional protocols for wet weather leak investigations. These protocols require the development of situation specific responses when wet weather conditions are present as they were on November 20, 2009. These training efforts were completed in the spring of 2010. Note Item 1(b): Employee Activities The Commission's April 28, 2010 Report contends that Atmos Energy's emergency response to the incident on November 20, 2009 was insufficient and thus, in violation of 49 CFR 192.615(b)(3). As an initial matter, Atmos Energy notes that 49 CFR 192.615(b)(3) requires a review of employee activities to determine whether the procedures were effectively followed in each emergency. It is clear from the Commission's April 28th Report that the required review occurred. To the extent that the Commission contends that the substance of the review was insufficient, Atmos Energy disagrees. The Commission's April 28th Report goes on to list two topics of concern regarding employee activities - carbon monoxide and Atmos Energy's continuing investigation of the incident. It is not clear from the Commission's April 28t Report what additional review the Commission would have Atmos Energy undertake based on the carbon monoxide notations reflected in the Leak Investigation Order ("LIO"). The gas detection equipment employed by all of Atmos Energy's service technicians automatically monitors for carbon monoxide and alarms if a carbon monoxide environment is detected. The documentation the Commission points to on the LIO report indicating that carbon monoxide was not checked relates to a specific practice Atmos Energy has to test for carbon monoxide at each appliance. Insomuch as the gas was turned off at the meter prior to the service technician's entry into the residence, it was not possible for the service technician to test for carbon monoxide at each appliance and the service technician appropriately reflected that fact on the LIO report. Further, the LIO notation referenced in the Commission's April 28th Report simply refers to the opinion of the Mesquite 2 0 Fire Department regarding the ignition source. Part 192 does not impose on the operator a requirement to dispute findings or conclusions rendered by a third party regarding the source of ignition as the allegations set forth in the Commission's April 28th Report suggest. Atmos Energy, also disputes that any violation of 192.615(b)(3) occurred due to the timing of its completion of the incident investigation at 2505 Catalina Drive. While the Commission's April 28th Report states that "Atmos did not continue their investigation until December 7, 2009," the Commission acknowledges that this was caused by the fact that "there was no access to the customer property." As discussed below, the lack of access to the homeowner's property prevented Atmos Energy from identifying the gas leak present at the service tap to 2505 Catalina Drive prior to December 7, 2009. Thus, the allegation that Atmos Energy unreasonably delayed its investigation is misleading and misplaced. As explained in response to alleged Violation No. 1(a), the conditions present on Friday, November 20, 2009 precluded Atmos Energy from completing its leak investigation on that day. As acknowledged in the Commission's April 284' Report, Atmos Energy returned on November 24, 2009, to continue its investigation. On November 24, 2009, Atmos Energy was able to perform leak detection activities within the public right-of-way. As part of this investigation, Atmos Energy obtained a gas reading of 0.5% at the service tap located within the public rightof-way. This gas reading provided no indication of a gas leak requiring immediate remediation at 2505 Catalina Drive. Further, Atmos Energy was prevented from identifying any pattern of gas migration downstream of the meter due to the lack of access to the homeowner's property. The Commission's April 28th Report acknowledges this fact when it states "There was no access to the customer property." Since the issuance of the Commission's April 28g' Report, Atmos Energy has verified that it was contacted on November 24, 2009, by the homeowner's representative and informed that access to the homeowner's property was prohibited. As gas service to 2505 Catalina Drive was interrupted since the meter at the rear property line was turned off, Atmos Energy had no legal basis for entering the property absent the homeowner's agreement. This agreement was not provided until December 7, 2009, when Atmos Energy's technician was granted access to 2505 Catalina Drive in conjunction with a site visit by the homeowner's insurance representatives. Notably, December 7, 2009, was the first date subsequent to the incident that Atmos Energy was permitted entry to the homeowner's property. Upon receiving entry, Atmos Energy performed bar hole testing following the path of the customer yard line to the point where the line enters the residence near the bathroom. The bar testing was performed at one-foot intervals and 16% gas was detected in an area under the bathtub. Atmos Energy initiated a leak investigation, determined a Grade 1 condition existed, and remained on-site until the Grade 1 condition was eliminated. Alleged Violation Item No. 2. Records were necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603(b) Note Item 1(a): Records 3 49 CFR 192.603(b) requires an operator to keep records necessary to administer the procedures established under 49 CFR 192.605. Nothing in 49 CFR 192.605 or any of the sections cited therein with respect to a natural gas distribution system requires the recording of data in the manner that the Commission suggests. Namely, that leak sketches accompanying a leak report must graphically depict inigrafiion to 0%. Moreover, a review of the referenced Leak Reports clearly indicates that, in every instance, a 0% reading was obtained in each direction. Specifically, the referenced Leak Reports clearly state "Bar Tested each direction to 0%." The accompanying sketches included in the referenced Leak Reports further depict the perimeter of the migration pattern established by the bar testing. These sketches detail the percentage migration to the perimeter of the sketch, which represents 0%. Nevertheless, and without admitting any violation of 49 CFR 192.603(b), Atmos Energy will continue to modify and improve its current process for documenting leak migration. Atmos Euei}gy will also continue to work with the Commission as it has in the past to improve this documentation of the Commission preferred method. Alleged Violation Item No. 3. 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) Note Item 1(a): Operator Qualification 49 CFR 192.805(b) requires that each operator follow a written qualification program that includes provisions to ensure through evaluation that individuals performing covered tasks are qualified. The Commission's April 280' Report alleges that Atmos Energy violated 49 CFR 1921805(b) based on the following: (1) Atmos Energy's technician did not dispute the possibility of a carbon monoxide explosion occurring, and; (2) the "sign off' given by an Atmos Energy supervisor to the LIO dated November 23, 2009, suggests that the supervisor accepted the finding of carbon monoxide explosion. The Commission's Report fin-ther asserts that the Atmos Energy technician did not indicate he checked for carbon monoxide at the time of his investigation. 49 CFR 192.801 sets forth requirements for operator qualification of individuals performing covered tasks on a pipeline facility. As explained in 49 CFR 192.801, covered tasks include any activity, identified by the operator, that: (1) Is performed on a pipeline facility; (2) Is an operations or maintenance task; (3) Is performed as a requirement of this part; and (4) Affects the operation or integrity of the pipeline. Carbon monoxide investigation is not a covered task falling within the qualified operator activities identified in Part 192 of the Code of Federal Regulations. Similarly, LIO review falls outside the scope of Qualified Operator covered task activities as defined under the federal safety 4 f standards. Further, Part 192 also does not impose on the operator a requirement to dispute findings or conclusions rendered by a third party regarding the source of ignition as the allegations set forth in the Commission's Apri128th Report suggest. On numerous occasions the Commission has reviewed Atmos Energy's Operator Qualification Plan and has verified that the plan complies with 49 CFR 192.805. The Commission's April 28^' Report does not identify any failure on the part of the Atmos Energy technician to perform the covered tasks required in the written qualification program. Finally, despite the fact that neither Part 192 of the Code of Federal Regulations nor the Commission-verified Operator Qualification Plan used by Atmos Energy requires carbon monoxide testing, it is important to point out that the gas detection equipment employed by all of Atmos Energy's service technicians automatically monitors for carbon monoxide and alarms if a carbon monoxide environment is detected. The documentation the Commission points to on the LIO report indicating that carbon monoxide was not checked relates to a specific practice Atmos Energy has to test for carbon monoxide at each appliance. Insomuch as the gas was turned off at the meter prior to the service technician's entry into the residence, it was not possible for the service technician to test for carbon monoxide at each appliance and the service technician appropriately reflected that fact on the LIO report. Alleged Violation Item No. 4. Listed segment was found in unsatisfactory condition, but there was no program to recondition or phase out the segments. Requirement: 49 CFR 192.613(b) Note Item 1(a): Steel Service Line Atmos Energy disputes the allegation that there is no program to recondition or phase out steel service line segments. Atmos Energy, as part of its ongoing surveillance activities and routine maintenance, takes action to replace steel service lines that do not meet the Commission's rigorous safety requirements. In fact, Atmos Energy, as of today, has replaced all steel service lines on Mapsheet 131, which includes the location of 2505 Catalina Drive. While steel service lines have, on balance, proven to be a satisfactory piping system for gas distribution service, Atmos Energy believes that the replacement of steel service lines within Mesquite and the rest of the Mid-Tex service area will enhance system reliability. For this reason, Atmos Energy, without admitting any violation of 49 CFR 192.613(b), is continuing its effort to replace steel service lines in Mesquite consistent with the risk model relied on by the Company to prioritize replacement activities. To date, these efforts have resulted in the replacement of approximately 1100 steel service lines in Mesquite. In addition, beginning in January, 2010, Atmos Energy acted to supplement its internal workforce with third party crews that are dedicated to steel service line replacement. As of April 29, 2010, Atmos had 32 third party crews dedicated to steel service line replacement. Atmos 5 • Energy has fizrther committed to increasing the number of third party crews dedicated to steel service line replacement to 50 crews by June 2010. Atmos is also working diligently with the Commission's Safety Division Staff, the City Coalitions that comprise the Atmos Cities Steering Committee ("ACSC") and Atmos Texas Municipalities {"ATM"), and the City of Dallas to develop a comprehensive plan for the replacement of steel service lines throughout the Mid-Tex service territory. Atmos Energy representatives have met with Commission Safety Division Staff on at least twelve occasions to discuss the critical components of the program and to refine the Company's risk model that is used to identify the priority of replacement of steel service lines. Atmos Energy has also been working collaboratively with its city regulators. Since early March, 2010, Atmos Energy has held multiple meetings with representatives of ACSC, ATM, and the City of Dallas to discuss, among other things, the Company's ongoing steel service line replacement efforts and the details of the Company's risk model. Municipal participation in Atmos Energy's steel service line replacement initiative is essential to both mitigate street and right-of-way disruptions and allow timely cost recovery in a way that does not place an undue burden on customers. Atmos Energy is committed to continuing to work with the Commission and its city regulators to reach agreement on vital aspects of steel pipe replacement that are necessary for the program to be expanded beyond the 50 third party crews that will be dedicated to this effort as of June, 2010. In conclusion, Atmos Energy regrets the loss of property that has occurred as a result of this incident. For the reasons stated above, Atmos Energy does not agree that it violated any of the code requirements cited in the Commission's April 28th Report. As always, Atmos Energy looks forward to working with the Commission to address the matters set forth in the Commissions' investigation report and safety evaluation. Atmos Energy is, and continues to be, dedicated to providing the safest and highest quality service to our customers. If you have questions, or if I may provide you with more information, please do not hesitate to contact me. Best regards, Patti Richards 6 * Leak Number: 459302 LEAKREPORT Townc 16 Address: LTO #: 2505 Catalina Dr Date Fonnd: 12/7/2009 Technician: Mesquite Grade: I Time Graded: 4:30 pin Assistance Requested: 4:35 pm Assistance Arrived: 4:40 pm Probable Source: Servicr. Gas Detected: Soil CGI Test: 16 Meter #: Condition Eliminated: 3:20 pin 5118316 Mapsheet: 131 Bar Tested each direction to 0% Mapsce: 49C Perimeter ofinigration pattern sltown on sketch Surface Over ixak: Soil Surface Over Main: Concrete Probable Pipe Type: Coated Stcel Class 4 Location: Business District: No No Dug up inlet riser: No Temporary Repair Type: Temp Repair Date: Transaction Date: Cross Refrence#: Lat: Long: County: DALLAS Cortez, Joaquin Line Locate #: Leak Repaired On: Type: I External Corrosion: External Pits: External Coating: Material: Compression Coupl iiFC: Pipesqneezed: Min Pit Depth: Mfn Length of Pit: Pipe St,e: 0 Pressure: 1.00 Cat:se of Leak: i.P. 1-60 PSIG Internal Corrosion: Station Plus: Technician: 0 Manufacturer: 6 Compression Coupling information : Model f Style: screw Type: No Soii Type: No Pullout: Unk Separated: No Wt.: -1.1 Wt: Anode Installed Main #: Anode Installed Service#: 370018 clay Test Station: Test Station: 370018 Anode TnstalledTecitnician: Test Station Station Plus: Pipetosoii Main: Left: Pipe to soii Service: E,eft: Pipe to soil Technician: -1.18 N/A Rectifred: N/A Rectified: 812589 None None 0.00 Good CGI Test °/n Gas: CGI Test Tech: Soap Test: 0 14936 Gasket / 0 812589 Soap TestTech: Odorant Detected: Repair Status: Temp Repair Type: Tcmp,Repair Tech: Pressure Test of: Test Medium: Test Pressure: Test Duration: Technician: Specified: Top: Side: Bottom: Pass Permanent -1 psig 120 Hours 0 812589 Wall Thickness Top: Side: Bottom: Found: PipcInfo Ileaoved Minutes Date: Leak Repaired By. hcaalled 12/15/2009 Pullcy, Robert Other Repair: Feet: Feet: Permanent Repair Tech t 812589 Monitored Date Siza Size; OZ Levet: _---.---.--.-------Monitored By Change Migration Pattern --------- ---------- Description PerCent t_eak New Gas Grade Leak Number 0 ' Leak Number: 458825 LEAK REPORT Town: 16 Address: 2402 Luau Dr Date Found: 11/24/2009 Technician: Mesquite Cradc: 2.180 Time Graded: Assistance Requested: Assistance Arrived; Condition Eliminated: Probable Source: Servieo Gas Detected: Soil CGI Test: 30 Meter#F: I LIO #: 339669 Mapsheet: 131 Bar Tested each direction to 0% Mapsco: 49C Perimeter of migration pattern shown on sketch SurPace Over Leak: Soil Surfacc Over Main: Soil Class 4 Location: Business District: No No Probable Pipe'1'ype: Coated Steel Dug up inlet riser: No Temporary RepalrType: Temp Repair Date: Transaction Date: Cross Refrence #: Lat: Long: Freeman.Odeil County: Dallas Line Locate#: I Leak Repaired On: Typc: External Corrosion: External Pits: Materiat: Compression Coupl HFC: Pipe squeezed: Pipe Size: 0 Pressure: 1.00 Cause of Leak: I.P. 1-60 PSIG Station Plus: 0 External Coating.: Min Pit Deptb: Min Length of Pit: Internal Corrosion: Technician: 13147 Compresslott Coupling information : Manufacturer: Model / Style: screw Type: No Soil Type: No Pullout: No Wt: -!.3 Wr. Anode Installed Main #: Anode installed Service#: Dre Separated: Anode Installed Technician: Test Station Station Plus: Pipc to soil Main: Left: -1.30 NtA Rectified: Pipe to soil Service: Pipe to soil Technician: Left: N/A Rectific8: Date: Leak Repaired By: None CCI Test % Gas: 0 CCI Test Tech: 11994 Soap Test: Soap Test Tech: Odorant Detected: Repair Status: Thread Lea 11994 Pressare Test of: Test MedinnL Test Pressure: Test DuratIon: Teeh:dcian: Specified: Top: psig 120 Hours 0 11994 Wall Thickness Top: Side: Bottom: Bottom: Iraatalled Size: Garcia, Eduardo -1 Side: 12/28/2009 Other Repair: Pass Pennanent Temp Repair Type: Temp Repair Teeb: clay Test Station: Test Station: 11994 None None 0.00 Pipe Info Permanent Repair Tech : Found: RernoHed Size: Fcet: 02 Level: Minulcs Feot: 11994 Monitored Date Monitored By _-- -..-------°---°-- Migration Pattem -------- -------Change Description f 2/31 /1899 12/28/2009 N Conditions will not pemtit bar test - N Percent Gas Leak Grade 0 New Leak Number 2 S LeakNumbcr: 458826 LEAK REPORT Town: 16 Address: 2501 Catal'nta Dr Date Ibund: 11/24/2009 Technician: Mesquite L1O #: Grade: 3 Time Graded: Probable Source: Above Ground Gas Detectcdr Atmosphere CGI Tesf: 0 Assistance Requested: Assistance Arrfved: Condition El'mdnated: Meter #: 3397305 13ttrTested each direction to 0% Mapsheet: 131 Mapsco: 49C Surface Over Leak: Surface Over Main: Class 4 Location: Business District: No No Probable Pipe Type: Not Applicable Temporary Repair Ty pe: Freeman, Odell Temp Repair Date: Dug up inlet rlser: No Transaction Date: Lat: Long: Cross Refrence #: County; Dallas Line Locate #: Leak Repaired On: I External Corrosion: External I'its: Cxternal Coating: Type: Material: Fitting Pipe squeezed: EFC: Mfn Pit Depth: Pipe Size: 0 Pressure: Internal Corrosion: Cause of I.eak: I.P. 1-60 PSIG Station P1us: O,pO Mlin Length of Pit: Tecbnician: 0 Cootpression Coupling information : Manufacturer: Model / Style: Type: Soil Type: Pullout: Wt.: Wt: Anode Installed Main #: Anode Installed Service #: Anode Installed Technician: Separated: Test Station: Test Station; CGI Test % Gas: CG) Tcst Tccb: Soap Test: Soap Test Tech: Odorant Detected: Repair Status: Pipe to soil Main: Left: N/A Rectit'n:dc Pipe to soil Service: Left: N/A Rectified: Pipe to soil Tcclueician: Thread Lea 15737 Pass Permanent Temp Repair Type: Temp Repair Tech: Pressure Test of: Test Mediutn: Test Pressure: Test Duration: Test Station Station Plus; 0 0 psig Hours Technician: Specified: Top: Side: Bottom: Minutes Waii Ti:ickness Top: Side: Bottom: Found: Ptpe Info lfc+uored Date: Leak Repaired 13y: Iet,rtalted 121I4/2009 s3zm: Other Repair: Permttttent Repair Tech : Monitored Date Size: Feet: 02 Level: Feet: 15737 ..... .-- Monitored By Change Migration Pattern ---------------Description Percent Oav Leak Cirade New LeakNumber 0 Leak Number: 458824 LEAK REPORT Town: 16 Address: Probable Source: Time Graded: Assistance Requestedo Assistance Arrived: Condition Eliminated: Service 490$843 Mapshcct: 131 Bar Tested each direction to 0% Perimeter of migration pattern shown on sketch Surface Over E.eak: Asphalt Surface Over Main: Concrete Probable Pipe Type: Foly Temporary Repair Type: T¢mp Repair Date: Transaction Date: I Grade: 2.180 Gas Detected: Soil CGI Test: 4 Meter #: I L1O #: 3614 Palm Dr Date Found: 11124/2009 Technician; Mesquite Mapaco: 49C Class 4 Location: Business District: No No Dug up Inlet riser: No Freeman, Odell Lat; Long: Cross Refrence #: County: Dallas Line Locate #: Leak Repaired On: Type: I Material: Fitting Pipe squeezed: External Corrosion: External Pits: >;xternal Coating; EFC: Min Pit Deptbs Min Length of Pit: Internal Corrosion: Technlcian: 14314 Pipe Slze: 0 Pressure: 0.75 Cause of Leak: I.P. 1-60 PSIG Station Pius: 0 Compression Coupling information : Manufacturer: Mode1/ Style: Type: Soil Type: Puiiout: Separated: None None 0.00 Good CGI Test % Gas: 0 CGI Test Tcch: Soap Test: Soap Test Tecb: Odorant Detected: RepairStatus: Temp Repair Type: 14314 Thread I.ea 14314 Pass Permanent Temp Repair Tech: No i Wt: Anode Installed Main #: Anode Installed Service #: Anode Installed Technician: -1.0 Wt: Test Station: Test Stationa Test Station Station Plus: Pipe to soil Main: Left: .1.07 N/A Rectified: Pipe to soil Service: Left: IslA Rectified: Pipe to soil Technician: 14314 Pressure Test of. Test Medium: Test Pressure: Test Dnration: -1 psig 120 Hours Specified: Top: Side: Wai1 Thickness Top: Side: Bottom: Date: Leak Repaired By: Sfze: Gutierrez, Jose Other Repair: Permanent Repair Tech : 12/31 / 1899 Reaqp^w.d Size: Monitored By 12/22/2009 C•eet: 14314 Monitored Date Pipe We reot: 02 Level; Found: Bottom: 11r57alkd 12/28/2009 Minutes 14314 Technician: ----------------- Migration Pattern Change Description N Conditions will not penmit bar test - N Percent an New Leak Number Leak Grade 1 2 VICTOR G. CARRILLO, Chairman ELIZABETH A. JONES, Commissioner MICHAEL L. WILLIAMS, Commissioner MARY ROSS McDONALD ACTING DIRECTOR RAILROAD COMMISSION OF TEXAS Pipeline Safety Division April 29, 2010 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: 102051 ATMOS ENERGY/MESQUITE (All correspondence must include the Inspection Package Number) Dear Ms. Patti Richards: Recently, an incident, complaint, or other condition required our staff to conduct an investigation of pipeline facilities operated by your company. The facilities and the subject of the investigation are identified in the attached Safety Evaluation Summary. Investigations are conducted in accordance with pipeline safety requirements of the Texas Utilities Code, Section 121.201 for natural and other gas pipeline facilities and TEX. NAT. RES. CODE, Sections 117.001 and 117.011 (Vernon Supp. 2002) for hazardous liquid pipeline facilities. During the investigation, selected physical conditions, written procedures, and records were reviewed. At the time of this investigation, alleged violations of the minimum safety regulations were found and are detailed in this correspondence. Violations of the Pipeline Safety rules are subject to administrative penalties. The legal enforcement staff will contact you regarding any enforcement action that may apply as a result of the repeat violation(s) noted during the evaluation. The investigation results reflect the general status and condition of the entire system. It is your responsibility to take action, not only to correct the specific deficiencies listed in the attachment, but also to recognize and correct any other conditions which do not meet the minimum safety standards. 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 lop 0 April 29, 2010 Page 2 0 If you have any questions or need assistance, do not hesitate to contact Alfred Garcia, Jr in the Fort Worth Regional Office at (817) 882-8966. Sincerely, Mary Ross McDonald Acting Director Enclosure: Safety Evaluation Summary Alleged Violation List 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 12/7/10 8:29 AM kailroad Commission of Texas Safety Division Page 1 of 1 Safety Evaluation Summary Inspection Package: 102051 Activity/C lass icatio n: Specialized/Accident Operator: Unit: 6776 ATMOS ENERGY CORP., MID-TEX DIVISION Ms. Patti Richards V. P. Technical Services P. O. Box 223705 Dallas, TX 75222-3705 3411 ATMOS ENERGY/MESQUITE Inspection Package Performed Start Date: 12/08/2009 End Date: 03/25/2010 Alleged Violations Eval No System ID and Name System Type 20100703 610980 MESQUITE Inspector(s) Alfred Garcia, Jr Terry Sullivan Distribution Repeat Uncorrected Corrected Total 0 4 Regional Office Fort Worth Phone Number (817) 882-8966 Fort Worth (817) 882-8966 0 4 Important Note: The pipeline system(s) listed above are identified by a number and name and represent the physical pipe, valves and other components operated by your company. Additionally, there may be a pipeline system listed that is named "System of Company ID Number" where "number" is the identification number of your company. This system is used to represent your company and does not represent any physical pipeline system. For internal purposes it allows the Commission to more properly record inspection work performed at the company level. Where deficiencies are found in programs, plans, procedures, and records at the company level and are not with a specific physical system, alleged •ailroad Commission of TexasA Safety Division Alleged Violation List 12/7/10 8:29 AM Page 1 of 3 All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 Activity/Classication: Specialized/Accident System Name: MESQUITE Evaluation Number: 20100703 Item Number: 1 Action Needed: Violation requires a plan of correction by UNKNOWN DATE. Description: 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) Notes: Description: Other: Emergency Plan Location: 2505 Catalina Drive Mesquite, TX. Comment: The operator failed to properly enact the emergency plan procedures. a.) 192.615 (a)(4) states, "The availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency." The technician who investigated the Leak Investigation Order (LIO) about a possible explosion on Friday 11/20/09 at 2505 Catalina Dr., Mesquite, TX could not bar test due to wet soil conditions. The technician only had one type of leak detection equipment available at the incident site. The operator's technician should have used all the leak detection equipment and appropriate personnel available to further investigate the incident. b.) 192.615 (b) (3) states, "Review employee activities to determine whether the procedures were effectively followed in each emergency." An Atmos supervisor reviewed the LIO the following workday on Monday 11/23/09 and reviewed the note stating the incident was a possible CO explosion. However, on the LIO document it states that CO was not checked. This should be a red flag to the supervisor reviewing the LIO. No follow-up to the incident site occurred, even though bar testing had not been performed. Atmos received a letter from the homeowners insurance'on 11/24/09 that the possible incident was natural gas related. Atmos responded on 11/24/09 to investigate the main and service line. A gas reading of 0.5% was detected at the service tap. No leak was graded at this time or a record of the bar testing results. During this check at least three additional leaks were found and graded. Atmos did not continue their investigation until December 7, 2010. The investigation was done in conjunction with the homeowners insurance representatives. Gas concentrations were detected and a Grade 1 leak was created for 2505 Catalina Dr. Mesquite, TX, seventeen days after the initial call. The emergency response to this incident is insufficient. Okailroad Commission of Texat Safety Division 12/7/10 8:29 AM Page 2 of 3 Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 Activity/Classication: Specialized/Accident System Name: MESQUITE Evaluation Number: 20100703 Item Number: 2 Action Needed: Violation requires a plan of correction by UNKNOWN DATE. Description: Records necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603(b) Notes: Description: Other: Records Location: Leak No. 459302 2505 Catalina Dr., Mesquite, TX Leak No. 458826 2501 Catalina Dr., Mesquite, TX Leak No. 458825 2402 Luau Dr., Mesquite, TX Leak No. 458824 3614 Palm Dr., Mesquite, TX Comment: On the leak report, the leak sketch should indicate that bar testing was performed in each direction to 0%. The leak sketch shows the migration pattern but does not indicate that a 0% reading was obtained in each direction. This item has been an ongoing discussion with Atmos since 2009, regarding the improvement needed with leak grading and leak monitoring data. Item Number: 3 Action Needed: Violation requires a plan of correction by UNKNOWN DATE. Description: 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) Notes: Description: Operator Qualification Location: 2505 Catalina Mesquite, TX Comment: The technician was notified by the Mesquite Fire Department that a potential carbon monoxide explosion occurred at the location. As previously noted, the technician did not indicate that he checked for carbon monoxide at the time of his investigation, nor did he dispute the possibility of a carbon monoxide explosion occurring. Additionally, the supervisor "signed off' on the initial report on November 23, 2009. This may indicate that the supervisor accepted the finding of carbon monoxide explosion. k *ailroad Commission of Texas Safety Division Alleged Violation List 12/7/10 8:29 AM Page 3 of 3 All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 Activity/Classication: Specialized/Accident System Name: MESQUITE Evaluation Number: 20100703 Item Number: 4 Action Needed: Violation requires a plan of correction by UNKNOWN DATE. Description: The listed pipeline segment(s) was found in unsatisfactory condition, but there was no program to recondition or phase out the segment(s). Requirement: 49 CFR 192.613(b) Notes: Description: Other: Steel Service Lines Location: Mesquite Distribution System Comment: Atmos has experienced several incidents involving steel service lines over the past several years. These incidents have involved leaks from the steel service lines and their connections to the main or customer meter. Additionally data submitted as part of the PS-95 leak report reveals that Atmos has a leak rate of over 64% for their steel services in all leaks repaired within the Mesquite system in the past year, indicating a potential safety issue with these steel service lines and the need for a program to recondition or phase out these steel service lines. Enforcement requested to require the replacement of these steel service lines in Mesquite • VICTOR G. CARRILLO, CHAIRMAN ELIZABETH A. JONES, COMMISSIONER MICHAEL L. WILLIAMS, COMMISSIONER MARY L. MCDANIEL, P.E, DIVISION DIRECTOR RAILROAD COMMISSION OF TEXAS SAFETY DIVISION Apri128, 2010 Ms. Patti Richards, V.P. Technical Services Atmos Energy Corp., Mid-Tex Division P.O. Box 223705 Dallas, TX 75222-3705 Re: Pipeline Saf Inspection Atmos Energy/Mesquite C4-S Dear Ms. Patti Richards: Recently, an incident, complaint, or other condition required our staff to conduct an investigation of pipeline facilities operated by your company. The facilities and the subject of the investigation are identified in the attached Safety Evaluation Summary. Investigations are conducted in accordance with pipeline safety requirements of the Texas Utilities Code, Section 121.201 for natural gas and other gas pipeline facilities and TEX. NAT. RES. CODE, Sections 117.001 and 117.011 (Vernon Supp. 2002) for hazardous liquid pipeline facilities. During the investigation, selected physical conditions, written procedures, and records were reviewed. At the time of this investigation, alleged violations of the minimum safety regulations were found and are detailed in this correspondence. Violations of the Pipeline Safety rules are subject to administrative penalties. The legal enforcement staff will contact you regarding any enforcement action that may apply as a result of the violations noted during the evaluation. The investigation results reflect the general status and condition of the entire system. It is your responsibility to take action, not only to correct the specific deficiencies listed in the attachment, but also to recognize and correct any other conditions which do not meet the minimum,safety standards. 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 * HTTP://W W W.RRC.STATE,TX,US • April 29, 2010 Page 2 If you have any questions or need assistance, do not hesitate to contact Alfred Garcia, Jr. in the Fort Worth Office at (817) 882-8966. Enclosure: Safety Evaluation Summary Alleged Violation List Railroad Commission of Texas Pipeline Evaluation System List of Alleged Violations for Field Package ID: 102051 These violations are unconfirmed. Official correspondence to follow. Company: ATMOS ENERGY CORP., MID-TEX Begin Date: 12/08/2009 Lead Inspector: Alfred Garcia, Jr System Name: MESQUITE Item No 1 Requirement 49 CFR 192.13(c) 2 49 CFR 192.603(b) End Date: 03/25/2010 Phone Number: (817) 882-8966 Evaluation: 20100703 Description Plans, procedures and/or programs required by Part 49 CFR 192 were not maintained, modified, or followed as necessary. Location 2505 Catalina Drive Mesquite, TX. Records necessary to administer the operation and Leak No. 459302 maintenance plan were not maintained or were inadequate. 2505 Catalina Dr., Mesquite, TX Leak No. 458826 2501 Catalina Dr., Mesquite, TX Leak No. 458825 2402 Luau Dr., Mesquite, TX Leak No. 458824 3614 Palm Dr., Mesquite, TX 3 4 49 CFR 192.805 (b) 49 CFR 192.613(b) The operator did not ensure that pipeline personnel were qualified to perform covered tasks as required in the written qualification program. 2505 Catalina The listed pipeline segment(s) was found in Mesquite Distribution System unsatisfactory condition, but there was no program to recondition or phase out the segment(s). Mesquite, TX • 1 Railroad Commission of Texas Safety Division Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized/Accident Evaluation Number: 20100703 Item Number: 1 Action Needed: Violation requires a plan of correction by May 28, 2010. Description: 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) Notes: Description: Emergency Plan Location: 2505 Catalina Drive Mesquite, TX Comment: The Operator failed to properly enact the emergency plan procedures. 192.615 (a)(4) states, "The availability of personnel, equipment, tools, and materials, as needed at the scene of an emergency." The technician who investigated the Leak Investigation Order (LIO) about a possible explosion on Friday 11/20/09 at 2505 Catalina Dr., Mesquite, TX could not bar test due to wet soil conditions. The technician only had only type of leak detection equipment available at the incident site. The operator's technician should have used all the leak detection equipment and appropriate personnel available to further investigate the incident. 2 Railroad Commission of Texas Safety Division Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized/Accident Evaluation Number: 20100703 Item Number 1 cont'd. b.) 192.615 (b)(3) states, "Review employee activities to determine whether the procedures were effectively followed in each emergency." An Atmos supervisor reviewed the LIO the following workday on Monday 11/23/09 and reviewed the note stating the incident was a possible CO explosion. However, on the LIO documents it states that CO was not checked. This should be a red flag to the supervisor reviewing the LIO. No follow-up to the incident site occurred, even though bar testing had not been performed. Atmos received a letter from the homeowners insurance on 11/24/09 that the possible incident was natural gas related. Atmos responded on 11/24/09 to investigate the main and service line. A gas reading of 0.5% was detected at the service tap. No leak was graded at this time or a record of the bar testing results. During this check at least three additional leaks were found and graded. Atmos did not continue their investigation until December 7, 2010. The investigation was done in conjunction with the ho.meowner's insurance representatives. Gas concentrations were detected and a Grade I leak was created for 2505 Catalina Dr., Mesquite, TX, seventeen days after the initial cell call. The emergency response to this incident is insufficient. 3 Railroad Commission' of Texas Safety Division Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized/Accident Evaluation Number: 20100703 Item Number: 2 Action Needed: Violation requires a plan of correction by May 28, 2010. Description: Records were necessary to administer the operation and maintenance plan were not maintained or were inadequate. Requirement: 49 CFR 192.603(b) Notes: Description: Records Location: Leak No. 459302 - 2505 Catalina Dr., Mesquite, TX Leak No. 458826 - 2501 Catalina Dr., Mesquite, TX Leak No. 458825 - 2402 Luau Dr., Mesquite, TX Leak No. 458824 - 3614 Palm Dr., Mesquite, TX Comment: On the leak report, the leak sketch should indicate that bar testing was performed in each direction to 0%. The leak sketch shows the migration pattern but does not indicate that a 0% reading was obtained in each direction. This item has been an ongoing discussion with Atmos since 2009, regarding the improvement needed with leak grading and leak monitoring data. 4 Railroad Commission of Texas Safety Division Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized/Accident Evaluation Number: 20100703 Item Number: 3 Action Needed: Violation requires a plan of correction by May 28, 2010. Description: 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) Notes: Description: Operator Qualification Location: 2505 Catalina Dr., Mesquite, TX Comment: The technician was notified by the Mesquite Fire Department that a potential carbon monoxide explosion occurred at the location. As previously noted, the technician did not indicate that he checked for carbon monoxide at the time of his investigation, nor did he dispute the possibility of a carbon monoxide explosion occurring. Additionally, the supervisor "signed off" on the initial report on November 23, 2009. This may indicate that the supervisor accepted the finding of carbon monoxide explosion. ' ♦ Railroad Commission of Texas Safety Division Alleged Violation List All correspondence must include the Inspection Package and Evaluation Number Inspection Package: 102051 System Name: MESQUITE Activity/Classification: Specialized/Accident Evaluation Number: 20100703 Item Number: 4 Action Needed: Violation requires a plan of correction by May 28, 2010. Description: The listed segment was found in unsatisfactory condition, but there was no program to recondition or phase out the segment. Requirement: 49 CFR 192.613(b) Notes: Description: Steel Service Line Location: Mesquite Distribution System Comment: Atmos has experience several incidents involving steel service lines over the past several years. These incidents have involved leaks from the steel service lines and their connections to the main or customer meter. Additionally data submitted as part of the PS-95 leak reveals that Atmos has a leak rate of over 64% for their steel services in all leaks repaired within the Mesquite system in the past year, indicating a potential safety issue with these steel services lines and the need for a program to recondition or phase out these steel service lines. Enforcement requested to require the replacement of these steel services lines in Mesquite. 5