Attachment C 2018 INITIATIVES AND PROJECTS AUTHORIZED BY THE SYSTEM SAFETY AND INTEGRITY RIDER FOR ROCKY MOUNTAIN NATURAL GAS LLC

Transcription

1 2018 INITIATIVES AND PROJECTS AUTHORIZED BY THE SYSTEM SAFETY AND INTEGRITY RIDER FOR ROCKY MOUNTAIN NATURAL GAS LLC November 1, 2017

2 Table of Contents INTRODUCTION Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No Capital Project No i

3 INTRODUCTION Section 24 of the General Terms and Conditions Rocky Mountain Natural Gas LLC ( Rocky Mountain or RMNG or the Company ) Tariff, Colo. PUC No. 4 ( Tariff ) sets forth the terms and conditions for the System Safety and Integrity Rider ( SSIR ) ( SSIR Tariff ). Under the SSIR Tariff, Section 24.1, Rate Schedules for natural gas service are subject to a SSIR designed to collect Eligible System Safety and Integrity Costs, as defined therein. The SSIR rates will be subject to annual changes to be effective on January 1 of each year for a period of four years from the first effective date, after which period of time the Company s SSIR rider will expire unless the SSIR rider is reinstated upon consideration of the Public Utilities Commission of the State of Colorado (the Commission ). The SSIR rate to be applied to each Rate Schedule is as set forth on the statement of effective rates, charges and fees, Sheet Nos. 8 through 10 of the Rocky Mountain Tariff. Section 24.2 of the SSIR Tariff states that each proposed revision in the SSIR rate will be accomplished by the Company filing an advice letter on November 1 of each year to take effect on the following January 1. The SSIR Tariff requires that the annual filing include all pertinent information and supporting data related to Eligible System Safety and Integrity Costs, such as project descriptions and scopes, project costs, and in-service dates. Section 24.3.b of the SSIR Tariff defines Eligible System Safety and Integrity Costs to mean: 1) A return, at a percentage equal to the Company s projected weighted average cost of capital grossed up for taxes, on the projected increase in the month ending net plant in-service balances associated with the Projects for the following 12-month period in which the SSIR rates will be in effect, exclusive of all plant in-service included in the determination of the revenue requirements approved in the Company s last general rate case; 2) The plant-related ownership costs associated with such incremental plant investment, including depreciation, accumulated deferred income taxes, and all taxes including income taxes and property taxes; and 3) The projected operation and maintenance expenses related to the Projects for the following 12- month period in which the SSIR rates will be in effect. The return and income taxes and plant related costs associated with improvements or upgrades to facilities, made at the discretion of the Company and not specifically required by a statute or regulation, shall be excluded from Eligible System Safety and Integrity Costs. As set forth in Section 24.3.c of the SSIR Tariff, SSIR Projects 1 mean one or more of the following: 1) Projects in accordance with Code of Federal Regulations ( CFR ) Title 49 (Transportation), Part 192 (Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards), Subpart O (Gas Transmission Pipeline Integrity Management), including projects in accordance with the Company s transmission integrity management program ( TIMP ) and projects in accordance with State enforcement of Subpart O and the Company s TIMP; 2) Projects in accordance with CFR Title 49 (Transportation), Part 192 (Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards), Subpart P (Gas Distribution 1 Also referenced in this filing as Projects. 1

4 Pipeline Integrity Management), including projects in accordance with the Company s distribution integrity management program ( DIMP ) and projects in accordance with State enforcement of Subpart P and the Company s DIMP; and 3) Projects in accordance with final rules and regulations of the U.S. Department of Transportation s Pipeline and Hazardous Materials Safety Administration ( PHMSA ) that become effective on or after the filing date of the application requesting approval of the SSIR. Rocky Mountain has identified 13 Capital SSIR Projects for the instant filing. Consistent with Section 24.3.c of the SSIR Tariff, Rocky Mountain analyzed these SSIR Projects based upon the objective criteria listed within the SSIR Tariff. Rocky Mountain also provides a risk assessment for each SSIR Project including the probability of failure, the consequences of failure for the project and how the Company prioritized the project as a high-risk gas infrastructure project for which it seeks recovery. 2

5 2018 Capital Project No. 1 County Road 109 Replacement Project ROW Remediation 2 (Continuation from 2017 Capital Project Nos. 1 and 10) This is the conclusion of SSIR 2017 Capital Project Nos. 1 and At the conclusion of construction, RMNG must remediate the ground and areas where construction was completed. Rocky Mountain originally included this as a SSIR Project because the six-inch pipeline from Glenwood Town Border Station ( TBS ) to Crystal River Measurement Station ( CRMS ) has grown into a highly populated area and passes through a known slide area which caused this line to rupture in As a result, the Company is required to add protection in the event of a gas release in order to mitigate the consequences of a pipeline failure in a High Consequence Area ( HCA ). The isolation valve provides an additional point of control and isolation in case of a pipeline emergency or an equipment failure upstream. Threat(s): Equipment and Incorrect Operations Remediation: Rocky Mountain will monitor and maintain the Storm Water Management Plan ( SWMP ) as well as address any reclamation work that may need to be completed, including potential regrading, reseeding and replanting. Project Description and Scope of Work Construction for the block valve and pipeline will be completed in In order to complete the project RMNG will remediate the right-of-way used during construction. Rocky Mountain will monitor and maintain the Storm Water Management Plan ( SWMP ) as well as address any reclamation work that may be needed including potential regrading, reseeding and replanting. Risk Assessment This risk assessment is tied to 2017 SSIR Project Nos. 1 and 10, and not the remediation work to be completed in However the remediation work is a necessary component to any construction and due to the winter weather experienced in this part of the state the remediation work will be better completed in If the block valve was not completed, the consequence was that a large customer base downstream of this segment would have been without natural gas service, potentially for an extended period of time. Rocky Mountain prioritized this as a high-risk gas infrastructure project because of the pipeline s critical role in service to Aspen, Colorado during the winter months, the consequences of emergency response to a highly populated area, and the potential of equipment failure of upstream facilities. Risk Output: As this is a continuation of 2017 SSIR Capital Project Nos. 1 and 10, the Risk Output and Objective Criteria Analyzed is representative of the original risk for the project. 2 Referred to in Attachment MMA-10 to Ms. Moorman Applegate s Direct Testimony filed in Proceeding No. 17AL- 0654G (Attachment MMA-10) as CR 109 Block Valve ROW Remediation. 3 Note that Attachment MMA-10 inadvertently failed to reference that this project is a continuation of both 2017 SSIR Capital Projects 1 and 10. 3

6 External Internal Stress Cracking Manufacturing Construction Equipment Third Party Incorrect Operations Weather and Outside Force Max Risk Of Failure 45.2% 26.0% 40.8% 46.4% 25.8% 36.4% 59.0% 52.5% 16.6% 50.4% Project Hierarchy: High Other (Pipeline Safety) Estimated 2018 Cost: $260,000 Estimated Completion: December, 2018 Project Cost and Estimated Completion Date Objective Criteria Analyzed a Specific Regulatory Requirements Section requires an operator take additional measures beyond those already required by Part 192 to prevent a pipeline failure and to mitigate the consequences of a pipeline failure. Construction and installation of a mainline block valve contributes to the overall operational safety of this transmission line by reducing the emergency response time of a highly populated area and establishes an additional point of isolation should an incident occur. b Threat Assessment The primary threats are Equipment and Incorrect Operations. The threat of Equipment is due to the need to have adequate facilities for emergency response purposes due to the highly populated area and upstream facilities served off of this line. c Control Analysis Additionally, there is a potential for isolation error in harsh winter conditions due to accessibility, increasing the potential threat of Incorrect Operations. This section of the pipeline was replaced in 1996 and is coated with FBE coating. Due to the more recent installation of this pipeline, the coating is believed to be in good condition. d Pipeline Vintage The pipeline was installed in e Pipeline Material The pipeline is made of carbon steel. f Pipeline Design and Class Location g Pipeline Configuration and Segmentation This six-inch pipeline has a MAOP of 824 psig. A map showing the various Capital Projects and class locations along the RMNG system as well a project specific map will be separately provided. Please refer to the overview map of the Rocky Mountain system referenced in Section (f) of this Objective Criteria table. This pipe segment runs from the Glenwood interconnect (off the Rifle-Avon P/L) to the Crystal River Compressor station. This pipeline's flow can be operated bi-directionally but generally flows from Glenwood to Crystal CS. h Pipeline System Constraints This pipeline segment flows a significant part of the supply for system needs in the winter (gas from the Rifle area to Aspen area). i Pipeline Replacement This is a replacement pipeline installed in j Population Density Within 1,000 feet of the pipeline this SSIR Project is associated with, the population density is 406 persons per mile. 4

7 k Pipeline Maintenance One ILI tool was run through this line in and Internal Inspection l Pipeline Piggability The six-inch pipeline is piggable. m Existence and Reliability of Pipeline Asset and Testing Records n Pipeline Leakage and Other Incident Complete and reliable pipeline asset and testing records do exist for this six-inch pipeline. There has been a history of leaks and other incident history on this pipeline. The Historical Damages and Leaks from this SSIR Project were provided on the CD submitted in accordance with the 2017 SSIR filing in connection with 2017 SSIR Capital Project No. 10, subfolder n, and will be separately provided. o Subject Matter Expert Knowledge Subject matter experts recommended this SSIR Project as high priority because of their understanding of the system and the risks as explained in this Objective Criteria for 2017 SSIR Capital Project No. 10. p Project Timeframe This SSIR Project is expected to be completed and capitalized by the end of q Weather and Climate Constraints on the Construction Season The majority of the construction work will be completed during the summer months to avoid the costs and potential delays of winter construction and to reduce the likelihood of service outages. r Permitting Constraints This SSIR Project is not constrained because of permitting s t u Probability of Pipeline Testing Failures and Dewatering Constraints Service Outage Management Pipeline Source and Supply and Availability of Alternate Gas Supply requirements. Not applicable to this SSIR Project. This SSIR Project s construction timeframe will be managed to occur during the summer period so that no service outage or interruption of flow to customers will occur. No alternate gas supply will be required for this SSIR Project because Rocky Mountain will install temporary bypasses during the construction of this SSIR Project. 5

8 2018 Capital Project No. 2 Wolf Creek Well Integrity Wells #71 and #9 Replace downhole safety valve, replace tubing and complete wireline surveys 4 In December of 2016, PHMSA published an interim final rule titled Safety of Underground Natural Gas Storage Facilities based on two API Recommended Practices that laid out guidelines for gas storage in salt caverns and depleted reservoirs (API RP 1170 and 1171, respectively)( Interim Final Storage Rule ). The Interim Final Storage Rule went into effect on January 18, Under 2017 SSIR Capital Project No. 8, RMNG, among other things, replaced downhole safety valves and reworked Wells #5 and #14. During this work, RMNG found irregularities in Well #5. With this information and in compliance with requirements under the PHMSA Interim Final Storage Rule, including but not limited to PHMSA requirements on integrity demonstration, verification and monitoring, Rocky Mountain, under its SSIR, is instituting an underground storage SSIR well review and remediation program. The work will include, but not necessarily be limited to, evaluation and replacement of downhole safety valves, evaluation of the casing and re-work of wells, as required. Downhole safety valves are the last resort when it comes to stopping the emission of gas in the wells and the Company believes this is an integral component to keeping our customers, local communities and the environment safe. RMNG is meeting with BLM to determine a schedule for which wells are to be assessed in which year, but plans to complete two well assessments each year for the next 5 years. Threat(s): Equipment and Remediation: Replace downhole safety valves, replace the 2 7/8-inch tubing and complete open hole wireline surveys. Project Description and Scope of Work This SSIR Project, 2018 Capital Project No. 2, includes retention of a third-party contractor to remove and replace the existing 2-7/8 Inch tubing strings and downhole safety valves at Wolf Creek Wells # 71 and #9. In addition, the crews will perform logging operations (ultra-sonic and Gama Ray-Cement Bond Log) to inspect the integrity of the well casing and cement bond structure. Once the wells have been flowed back, they will be returned back to normal service. Risk Assessment RMNG is conducting this work to ensure proper integrity of the well casings and tubing as well as gathering wellbore data in order to be in compliance with the Interim Final Storage Rule. These wells have not been inspected for 10 years. These wells are located on BLM land and special permission is needed to bring the appropriate equipment up to the wells. If this SSIR Project is not completed and a failure occurs, the consequence is that the safety valves fail. This is the first line of defense in a catastrophic failure. Downhole safety valves are the last resort when it comes to stopping the emission of gas in the wells and the Company believes this is an integral 4 Referred to in Attachment MMA-10 as Wolf Creek Well Re-work and Safety Valve Repair. 6

9 component to keeping our customers, local communities and the environment safe. Additionally, the Wolf Creek storage facility is used to maintain gas supply during the winter and the loss of gas could have the impact of requiring the Company to purchase spot gas on the market in the event of cold winter. Rocky Mountain prioritized this high-risk gas infrastructure project due to the consequences of environmental impacts due to the release of natural gas and the economic impact to customers. Risk Output: Not Applicable to this SSIR Project due to the SIMP risk model is currently being developed. Project Hierarchy: High Other (Pipeline Safety); PHMSA Interim Final Storage Rule Estimated 2018 Cost: $1,348,000 Estimated Completion: November, 2018 Project Cost and Estimated Completion Date Objective Criteria Analyzed a Specific Regulatory PHMSA Interim Final Storage Rule.. Requirements b Threat Assessment The primary threats are Equipment and. The threat of Equipment is due to the need to have adequate facilities for emergency response purposes. The threat of is due to the presence of irregularities, including corrosion, found in the casing of another well at the facility. c Control Analysis Indications of external corrosion were found on Well #5 s casing. While the findings will vary by each well, a risk of unknown corrosion exists for the remaining wells. d Pipeline Vintage Well # 71 was drilled in September of 1984 and Well #9 was drilled in October of e Pipeline Material The pipelines are made of carbon steel and cement casing. f g Pipeline Design and Class Location Pipeline Configuration and Segmentation The four-inch and three-inch pipelines serving these wells have a MAOP of 1300 psig. A map showing the various Capital Projects and class locations along the RMNG system as well a project specific map will be separately provided. Part of Wolf Creek storage facility that connects into the Rocky Mountain pipeline system at Crystal River Compressor Station. Please refer to the overview map of the Rocky Mountain system referenced in Section (f) of this Objective Criteria table. h Pipeline System N/A Constraints i Pipeline Replacement These two wells are from original construction and have not been previously replaced. j Population Density Within 1,000 feet of the pipelines this SSIR Project is associated with, the population density is 0 persons per mile. 7

10 k Pipeline Maintenance and Internal Inspection An ILI tool inspecting the internal condition of these wells has not been completed. l Pipeline Piggability N/A m Existence and Reliability of Pipeline Asset and Testing Records n Pipeline Leakage and Other Incident Subject Matter Expert Knowledge Complete and reliable asset and testing records exist and have been reviewed for these wells. There is no leak or other incident history for these wells. o Subject matter experts recommended this SSIR Project as high priority because of their understanding of the system and the risks as explained in this Objective Criteria table. p Project Timeframe This SSIR Project is anticipated to take place during the summer months q Weather and Climate Constraints on the Construction Season and is expected to be completed and capitalized by the end of Not applicable to this SSIR Project. r Permitting Constraints Permitting requirements are currently being analyzed at this time. s Probability of Pipeline Testing Failures and Dewatering Constraints Not applicable to this SSIR Project. t u Service Outage Management Pipeline Source and Supply and Availability of Alternate Gas Supply This SSIR Project s construction timeframe will be managed to occur during the summer period so that no service outage or interruption will occur. No alternate gas supply will be required for this SSIR Project because gas supplies are supported by the transmission system pipelines. 8

11 2018 Capital Project No. 3 Install IR Coupon Test Stations - Glenwood 5 (Continuation of 2017 Capital Project No. 14) This is a continuation of 2017 SSIR Capital Project No. 14 and conclusion of the multi-year IR Coupon Test Station Program. Rocky Mountain included this as a SSIR Project because IR-Free Coupon Test Stations allow Company personnel to connect to the cathodic protection system in an isolated environment for monitoring purposes. The isolated environment reduces error in readings associated with resistances other than the ones produced across the structure to electrical boundary where cathodic protection currents cannot be readily interrupted. The installation of additional IR-Free Coupon Test Stations will enhance the Company s ability to monitor its cathodic protection systems. They will also allow the Company to make more precise decisions regarding repairs, replacements, and evaluate whether certain problematic pipeline segments need additional corrosion mitigation or monitoring. In addition, Rocky Mountain is required to consider the voltage (IR) drop readings on the pipeline and these IR-Free Coupon Test Stations will allow the Company to do this more effectively by eliminating the resistances in the CP circuit. This SSIR Project improves the operational safety of the Rocky Mountain transmission system by improving system knowledge of cathodic protection systems and increasing granularity in monitoring capabilities. Threat(s): External Remediation: Install IR-Free Coupon Test Stations across the Rocky Mountain system at identified locations for improved cathodic protection monitoring. Project Description and Scope of Work This SSIR Project, 2018 Capital Project No. 3 constitutes Rocky Mountain installing IR-Free Coupon Test Stations in areas of known or potential AC or DC interference, at the following GIS locations: , (6 Mesa TBS); , (Gypboard plant); , (Glenwood Interconnect); , (Eagle to Cordillera); , (4 Gypsum to Carbondale). Risk Assessment If this SSIR Project is not completed and an External related failure occurs, it is likely that a large customer base served within the Glenwood division, which includes but is not limited to the towns of Aspen, Glenwood Springs, Eagle and Gypsum, could be without service as this project spans multiple transmission pipeline segments within the division. Rocky Mountain prioritized this medium-risk gas infrastructure project because a large number of customers could be without service in the Glenwood division, and because of an External related failure. Risk Output: Not Applicable to this SSIR Project due to multiple locations. Project Hierarchy: Medium Other (Cathodic Protection) 5 Referred to in Attachment MMA-10 as SSIR Mitigation Program IR Coupon Test Stations Glenwood. 9

12 Estimated 2018 Cost: $20,550 Estimated Completion: August, 2018 Project Cost and Estimated Completion Date Objective Criteria Analyzed a Specific Regulatory Requirements Section requires an operator take additional measures beyond those already required by Part 192 to prevent a pipeline failure and to mitigate the consequences of a pipeline failure. In addition, Appendix D as referenced in Section requires that an operator be able to show that voltage (IR) drop readings were considered for valid interpretation of the voltage measurement. b Threat Assessment The primary threat is External due to the lack of confidence in historical IR-Free cathodic protection readings at identified locations as stated above to ensure appropriate cathodic protection levels have been maintained since the line was placed into service. c Control Analysis This SSIR project includes multiple segments, pipeline coatings include: Fusion Bond Epoxy in excellent condition, coal tar coated lines with some coating disbondment and coal tar, circa 1970 in poor condition. In addition, a reference to NACE SP is being separately provided. d Pipeline Vintage This SSIR project includes multiple segments and pipeline installation dates include: the 1960 s, the 1980 s and The exact year of installation of some segments is unknown because historical records were destroyed in a propane explosion that occurred in December of e Pipeline Material The pipeline segments for this SSIR Project are made of carbon steel. f Pipeline Design and A map for this Capital Project is being provided. Class Location g Pipeline Configuration and Segmentation Please refer to the overview map of the Rocky Mountain system referenced in Section (f) of this Objective Criteria table. h Pipeline System N/A due to multiple pipeline segments. Constraints i Pipeline Replacement N/A due to multiple pipeline segments. j Population Density N/A due to multiple pipeline segments. k Pipeline Maintenance and Internal Inspection N/A due to multiple pipeline segments. l Pipeline Piggability N/A due to multiple pipeline segments. m Existence and Reliability of Pipeline Asset and Testing Records destroyed those records in December of n o Pipeline Leakage and Other Incident Subject Matter Expert Knowledge Validation of the MAOP through historical records has been completed on the six-inch Eagle TBS Cordillera TBS pipeline segment but this is not possible on the remaining segments due to a propane explosion that N/A due to multiple pipeline segments. Subject matter experts recommended this SSIR Project as medium priority because of their understanding of the system and the risks as explained in this Objective Criteria table. 10

13 p Project Timeframe Project is expected to be completed and capitalized by the end of q Weather and Climate Constraints on the Construction Season The majority of the construction work will be completed during the summer months to avoid the costs and potential delays of winter construction and to reduce the likelihood of service outages. r Permitting Constraints This SSIR Project is not constrained because of permitting s t u Probability of Pipeline Testing Failures and Dewatering Constraints Service Outage Management Pipeline Source and Supply and Availability of Alternate Gas Supply requirements. Not applicable to this SSIR Project. Not applicable to this SSIR Project. Not applicable to this SSIR Project. 11

14 2018 Capital Project No. 4 Deep Well Anode Replacement 6 (Continuation of 2017 Capital Project Nos. 17, 18 and 19) This is a continuation of the deep well anode bed replacements that were initiated in 2017 SSIR Capital Project Nos. 17, 18 and 19. Rocky Mountain included this as a SSIR Project because anodes in the existing groundbeds are depleting and near the end of their useful life. These groundbeds are part of the cathodic protection system to protect Rocky Mountain pipeline assets from External. This is part of an ongoing program to replace aging technology with new deep well beds. This program will continue for five years. Historically, Rocky Mountain has installed impressed current cathodic protection systems, otherwise known as a rectified system where practicable, which includes a sacrificial anode bed in conjunction with a rectifier connected to an electrical source to mitigate the threat of External. Groundbeds at a rectifier location are installed either as a deep well (vertical) or surface bed (horizontal). A deep well installation is typically preferred as they provide optimal current distribution along the pipeline and take up less surface area reducing the likelihood to be dug into by a third party. The purpose of the groundbed is to be the sacrificial anodic structure in the cathodic protection circuit with the pipeline being the protected structure (cathode). The pipeline is protected through an electrochemical process where the anodes are slowly depleted and at the end of their useful life provide very little protection from external corrosion. It has been determined that the existing groundbeds at these locations have very high electrical resistance. As a result, the groundbeds require a higher level of power to achieve desired cathodic protection levels. High electrical resistance indicates the existing anodes may be depleting and near the end of their useful life. The pipe to soil potentials on the pipe near these rectifier locations are trending electropositive with the current anode beds. Threat(s): External Remediation: Install new deep well anode bed to replace the currently depleting deep well at the identified location to maintain required levels of cathodic protection. Project Description and Scope of Work This SSIR Project, 2018 Capital Project No. 4, constitutes Company corrosion experts designing and working with a third party to install the new deep well anode bed at the identified locations. The existing Brush Creek deep well will be replaced at the following GIS location: The existing surface rail groundbed at Kriti will be replaced with a deep well at GIS location , Risk Assessment If this SSIR Project is not completed and a failure occurs, it is likely that a large volume of gas would be released. Rocky Mountain prioritized this as a medium-risk gas infrastructure project because a large 6 Referred to in Attachment MMA-10 as SSIR Mitigation Program Deepwell Replacement - Glenwood. 12

15 volume of gas could be lost and there is a high potential for property damage in the surrounding areas should a failure occur. Risk Output: Not Applicable to this SSIR Project due to multiple locations. Project Hierarchy: Medium Other (Cathodic Protection) Estimated 2018 Cost: $94,500 Estimated Completion: August, 2018 Project Cost and Estimated Completion Date Objective Criteria Analyzed a Specific Regulatory Requirements Section requires an operator to take additional measures beyond those already required by Part 192 to prevent a pipeline failure and to mitigate the consequences of a pipeline failure. In addition, Rocky Mountain must maintain a level of cathodic protection that complies with applicable criteria of Appendix D as referenced in Section b Threat Assessment The primary threat is External resulting from the cathodic c Control Analysis protection system failing to adequately protect the pipeline. This pipeline is coated with tar, fiberglass and felt wrap coatings, otherwise known as TGF3 or coal tar. Although state-of-the-art at the time of installation, coal tar coatings are highly susceptible to forces from soil stress because of soil swelling when moisture is present. Moreover, as moisture leaves the area, the soil tends to shrink and pull the coal tar coating away from the pipeline, which could lead to disbondment of the coating and essentially create corrosion issues. This pipeline potentially is susceptible to shielding, which can occur from disbondment coating or environmental factors such as rock or other foreign materials placed in the ditch during construction. Shielding is a condition that can prevent cathodic protection current from reaching the surface of the pipeline. Along with soil stress in the region of reference, portions of the area are highly alkaline. Coal tar coatings have been found to degrade under alkaline conditions. d Pipeline Vintage Various vintages. e Pipeline Material The pipeline is made of carbon steel. f Pipeline Design and Class Location g h Pipeline Configuration and Segmentation Pipeline System Constraints The ten-inch Slick Rock to Read Junction pipeline has a MAOP of 1000 psig (Kriti). The ten-inch Crystal Compressor Station to Brush Creek TBS has a MAOP of 915 psig (Brush Creek). A map showing the various Capital Projects and class locations along the RMNG system as well a project specific map will be separately provided. Please refer to the overview map of the Rocky Mountain system referenced in Section (f) of this Objective Criteria table. N/A 13

16 i Pipeline Replacement N/A j Population Density Within 1000 feet of the pipeline this SSIR Project is associated with, the population density is 30 persons per mile. k Pipeline Maintenance and Internal Inspection An ILI tool has not been run on the Slick Rock to Read Junction Pipeline and an ILI has been run on the Crystal Compressor Station to Brush Creek. l Pipeline Piggability The ten-inch Slick Rock to Read Junction pipeline is not fully piggable and the ten-inch pipeline from Crystal River Compressor Station to m n Existence and Reliability of Pipeline Asset and Testing Records Pipeline Leakage and Other Incident Subject Matter Expert Knowledge Brush Creek is piggable. Validation of the MAOP through historical records is not possible on the Slick Rock to Read Junction pipeline but is possible on the Crystal River Compressor Station to Brush Creek pipeline. There is no leak or other incident history for this pipeline. o Subject matter experts recommended this SSIR Project as medium priority because of their understanding of the system and the risks as explained in this Objective Criteria for Capital Project No. 4. p Project Timeframe This SSIR Project is expected to be completed and capitalized by the end of q Weather and Climate Constraints on the Construction Season The majority of the construction work will be completed during the summer months to avoid the costs and potential delays of winter construction and to reduce the likelihood of service outages. r Permitting Constraints This SSIR Project is not constrained because of permitting s t u Probability of Pipeline Testing Failures and Dewatering Constraints Service Outage Management Pipeline Source and Supply and Availability of Alternate Gas Supply requirements. Not applicable to this SSIR Project. Not applicable to this SSIR Project. Not applicable to this SSIR Project 14

17 2018 Capital Project No. 5 Roaring Fork III Project - 8-inch/10-inch Anomaly Repair 7 (Continuation from 2015 Capital Project No. 1 and 2016 Capital Project No. 1,2017 Capital Project No. 3 and 2017 O&M Project Nos. 2 and 3) 8 Rocky Mountain included the multi-phased Roaring Fork III Project as SSIR Projects because adequate records did not exist to verify the maximum allowable operating pressure ( MAOP ) 9 on various segments of the pipeline. The historical records for this pipeline were lost in a propane explosion in December of Threat(s): External and Third Party Damage Remediation: Remediate any areas of anomalies found during the ILI run in Project Description and Scope of Work The Company completed an ILI tool run of the 8-inch and 10-inch Roaring Fork pipeline in The tool was run from Crystal River Compressor Station to the Aspen Brush Creek TBS. Upon review of data from ILI tool, prove-up digs will be performed to verify possible anomalies. Anomalies will be assessed for type of repair, i.e. strong back repair or pipe section replacement.. Risk Assessment Rocky Mountain could not assess the probability of failure with a high degree of confidence due to the lack of historical records for the existing pipeline as a result of the propane explosion that occurred in December of If the initial stages of the Roaring Fork III SSIR Project had not been completed and a failure occurred, the consequence is that a large customer base could be without natural gas service. In addition, the consequence of a failed hydrotest of the existing line could have produced: long service outages lasting up to a month or more due to the complexity of customer connections; pipeline ruptures lack of knowledge of the materials used during construction of the pipeline; and the risk of not being able to fully dewater the pipe potentially causing future problems of freeze-offs which could restrict the flow of gas in the line. Rocky Mountain prioritized this high-risk gas infrastructure project due to the consequences of service outage, the potential of hydrotest failure, and because the MAOP must be validated for transmission pipelines. The ILI tool ran in 2017 will provide data on the pipeline that could reveal anomalies that should be mitigated in order to maintain the integrity of the pipeline. Risk Output: As this is also a continuation of 2017 SSIR O&M Project Nos. 2 and 3, and the Risk Output and Objective Criteria Analyzed is representative of the original risk for the project. 7 Referred to in Attachment MMA-10 as CRMS to Aspen Valley 10 Anomaly Follow Up and Repair. 8 Attachment MMA-10 should also reference to 2017 O&M Projects 2 and 3. 9 The MAOP is calculated using factors of class location, pipe grade and wall thickness of the pipe, among other variables. 15

18 External Internal Stress Cracking Manufacturing Construction Equipment Third Party Incorrect Operations Weather and Outside Force Max Risk Of Failure 21.8% 9.3% 9.4% 18.9% 8.6% 3.2% 10.4% 2.6% 16.1% 43.5% Project Hierarchy: High Piggability for HCA Assessment Estimated 2018 Cost: $13,500 Estimated Completion: December, 2018 Project Cost and Estimated Completion Date Objective Criteria Analyzed a Specific Regulatory Requirements Rocky Mountain identified this as a pipeline requiring assessment under CFR Title 49, Part 192, Subpart O, TIMP. Section requires a pipeline operator to assess the integrity of the pipeline and address threats in HCAs. b Threat Assessment The primary threat is External because natural forces can have the consequence of damaging the pipeline coating, which may result in corrosion. A secondary threat is Third Party Damage due to the potential deformation on the pipeline caused by third parties or rock impingement. c Control Analysis The pipeline associated with this SSIR Project has adequate cathodic protection. d Pipeline Vintage The pipeline associated with this SSIR Project was installed in 1989, 1991, 1992, 2004, 2006 and e Pipeline Material The pipeline is made of carbon steel. f g Pipeline Design and Class Location Pipeline Configuration and Segmentation The pipeline segments for this SSIR Project have an original MAOP design of 915 psig. A map showing the various Capital Projects and class locations along the RMNG system as well a project specific map will be separately provided. Please refer to the overview map of the Rocky Mountain system referenced in Section (f) of this Objective Criteria table. This ten-inch pipeline is the primary feed of supply into Aspen. h Pipeline System Constraints The ten-inch pipeline is of adequate size to serve the current and projected loads for the Aspen area. i Pipeline Replacement The pipeline in this area is from the original construction and has not been previously replaced. j Population Density Within 1000 feet of the pipeline this SSIR Project is associated with, the population density is 819 persons per mile. k Pipeline Maintenance and Internal Inspection An ILI tool inspection was run on this line in 2010 and in l Pipeline Piggability The entire ten-inch pipeline is ILI piggable. m Existence and Reliability of Pipeline Asset and Testing Records Complete and reliable pipeline asset and testing records do exist for this ten-inch pipeline. 16

19 n Pipeline Leakage and There has been no history of leaks and other incident on this pipeline. Other Incident o Subject Matter Expert Knowledge Subject matter experts recommended this SSIR Project as high priority because of their understanding of the system and the risks as explained in this Objective Criteria for Capital Project No. 5. p Project Timeframe This SSIR Project is expected to be completed by the end of q Weather and Climate Not applicable to this SSIR Project. Constraints on the Construction Season r Permitting Constraints Not applicable to this SSIR Project. s Probability of Pipeline Not applicable to this SSIR Project. Testing Failures and Dewatering Constraints t Service Outage Not applicable to this SSIR Project. Management u Pipeline Source and Supply and Availability of Alternate Gas Supply Not applicable to this SSIR Project. 17

20 2018 Capital Project No. 6 Crystal River Compressor Station Piping Replacement 10 (Includes 2017 Capital Project No. 9) 11 Rocky Mountain included this as an SSIR Project because it was recently discovered that there was incorrect mapping of the underground pipeline between the Crystal River Compressor Station and the Crystal River Measurement Station ( CRMS ). The Company discovered that a section of the affected underground pipeline has an 8-inch diameter instead of a 10-inch diameter, resulting in mixed diameter pipe. The 8-inch diameter pipe is a legacy pipe that may have been constructed around the same time as the Crystal River Compressor Station (1967) but the Company does not have records to confirm the vintage nor does it have material records as historical records for this pipeline were lost in a propane explosion in December of The Company believes there are multiple transition points between the 8-inch and 10-inch diameter pipe, but cannot confirm the number or the total lengths of 8-inch pipe segments. Rocky Mountain is required to know its system and without complete historical records of this pipeline, Rocky Mountain cannot assess the probability of failure with a high degree of confidence due to the lack of records. Additionally, the dual diameter pipe segments do not allow the passage of a common or single diameter ILI tool for assessment purposes, but instead require the use of a dual diameter tool. This adds increased cost and complexity to the pigging program. This SSIR Project contributes to the overall operational safety of this transmission line because it removes pipe that is considered mixed diameter aging infrastructure with no historical records and allows for long term piggability and assessment of the section of pipeline from the Crystal River Compression Station to Aspen Brush Creek TBS, which runs through HCAs and Class 3 Locations. Threat(s): External, Manufacturing, Third Party Damage Remediation: Replace all 8-inch piping with 10-inch piping to match the block valve and have 10-inch diameter piping across this entire segment. Project Description and Scope of Work This SSIR Project, 2018 Capital Project No. 6, contributes to the safety of the pipeline by replacing mixed diameter aging infrastructure and improving the ILI Program by replacing 8-inch pipe with 10-inch pipe. Work for 2018 includes engineering and design as well as acquisition of any permitting and right-of-way. The other phase of the project is expected to be completed in 2019, including 2017 Capital Project No. 9. Risk Assessment If this SSIR Project is not completed and a failure occurs, the consequence is that the Company could lose service to Aspen, Basalt, El Jebel, and Carbondale. Rocky Mountain cannot assess the probability of failure with a high degree of confidence due to lack of historical records on the 8-inch pipeline segments as a result of the propane explosion that occurred in December of The current ILI option is limited to a dual diameter tool, which is an older generation tool with limited tolerances and fewer 10 Referred to in Attachment MMA-10 as Crystal River 8in to 10in Station Piping. 11 Crystal River Measurement Station Block Valve Installation, which is the installation of a mainline block valve on the 10-inch underground pipeline to be installed under this Crystal River Compressor Station Piping Replacement SSIR project. 18

21 channels. The multiple transition points between the 8-inch and 10-inch pipeline causes increased risk due to potential loss of a positive seal on the pig as well as the varying speeds of the pig causing a higher potential for data loss. Additionally, RMNG cannot accurately predict a risk of failure due to incomplete material records on the 8-inch pipe. Risk Output: External Internal Stress Cracking Manufacturing Construction Equipment Third Party Incorrect Operations Weather and Outside Force Max Risk Of Failure 20.0% 7.5% 9.3% 17.2% 8.6% 3.2% 8.6% 1.7% 15.7% 40.4% 19

22 Project Hierarchy: High Other (Pipeline Safety); Piggability for System Knowledge Estimated 2018 Cost: $25,000 Estimated Completion: November, 2018 Project Cost and Estimated Completion Date 12 Objective Criteria Analyzed a Specific Regulatory Requirements Rocky Mountain identified this as a pipeline requiring MAOP verification under CFR Title 49, Part 192, Subpart O, TIMP. Section requires a pipeline operator to know the MAOP of its pipe. b Threat Assessment The primary threat is Manufacturing due to the lack of records for this pipeline. The threat of Manufacturing is increased when aspects of the pipe, such as the pipe material, seam type, and joint factor are unknown. It is necessary to know the properties of these materials to calculate pipe design pressures per Section and MAOP pressures per Section If the above referenced information is unknown, conservative assumptions must be used thus reducing the performance/reliability of the pipeline. c Control Analysis d Pipeline Vintage The pipeline was installed in e Pipeline Material The pipeline is made of carbon steel. f Pipeline Design and Class Location The pipeline is coated with FBE, or fusion bonded epoxy. Inspections of this pipeline have found the coating to be in decent condition. The 8-inch Crystal River Compressor Station to Carbondale pipeline has a MAOP of 915 psig. A map showing the various Capital Projects and class locations along the RMNG system as well a project specific map will be separately provided. g Pipeline Configuration and Segmentation This pipeline serves as the primary and sole natural gas source to Aspen, Snowmass, El Jebel, Carbondale and Basalt. h Pipeline System Constraints The existing 8 inch nominal diameter section on this pipeline limits inline inspection to dual diameter tools. i Pipeline Replacement The pipeline in this area appears to be from the original construction and has not been previously replaced. j Population Density Within 1000 feet of the pipeline this SSIR Project is associated with, the population density is 406 persons per mile. k Pipeline Maintenance and Internal Inspection A dual diameter ILI tool was last ran in October 2017 from the Crystal River Compressor Station (CRCS) to the Aspen Brush Creek Town Border Station. A historical run in 2010 covered CRCS to the Aspen Valley Ranch block valve. l Pipeline Piggability The pipeline is piggable with an 8-inch/10-inch dual diameter tool. m Existence and Reliability of Pipeline Asset and Testing Records Validation of the MAOP through historical records is not possible due to a propane explosion that destroyed those records in December of Cost for SSIR Capital Project No. 6 is not included in the revenue requirement with this advice letter filing, but will be included in the revenue requirement for the November 1, 2018 SSIR filing, if the SSIR is extended beyond May 31,

23 n Pipeline Leakage and There is no leak or other incident history for this pipeline. Other Incident o Subject Matter Expert Knowledge Subject matter experts recommended this SSIR Project as high priority because of their understanding of the system and the risks as explained in this Objective Criteria table. p Project Timeframe This SSIR Project is scheduled to be completed by the end of q Weather and Climate Constraints on the Construction Season The majority of the construction work will be completed during the summer months to avoid the costs and potential delays of winter construction and to reduce the likelihood of service outages. r Permitting Constraints Permitting requirements are currently being analyzed. s t u Probability of Pipeline Testing Failures and Dewatering Constraints Service Outage Management Pipeline Source and Supply and Availability of Alternate Gas Supply The Company determined the probability of a testing failure to be moderate for this SSIR Project. There is a high probability of dewatering constraints for this SSIR Project. This SSIR Project s construction timeframe is being managed to occur during the summer period so that no service outage or interruption will occur because supply points were located on either side of the area of pipeline construction. Alternate gas supply will not be needed because the pipeline can be supported with on-system gas. 21

24 2018 Capital Project No. 7 Wolf Creek Well Integrity Replace Well #5 13 In December of 2016, PHMSA published an interim final rule titled Safety of Underground Natural Gas Storage Facilities based on two API Recommended Practices that laid out guidelines for gas storage in salt caverns and depleted reservoirs (API RP 1170 and 1171, respectively)( Interim Final Storage Rule ). The Interim Final Storage Rule went into effect on January 18, Under 2017 SSIR Capital Project No. 8, RMNG, among other things, replaced downhole safety valves and reworked Wells #5 and #14. During this work, RMNG found irregularities in Well #5, including corrosion and physical damage. Based on the assessments performed, RMNG intends to plug and abandon Well #5 after it has drilled another well to replace it. Threat(s): External Remediation: Drill and complete a replacement well for Well #5. Project Description and Scope of Work This SSIR Project, 2018 Capital Project No. 7 is a multi-year project and a component of the Storage Integrity Management Program and is a direct result of testing performed on Wolf Creek well #5 in A new well will be drilled, stimulated and completed. The work to be completed in 2018 consists of acquiring the necessary permitting to complete the well, engineering and purchase of wellhead equipment. This is a multi-year project that is expected to be operational in 2019 with remediation completed in Risk Assessment If this SSIR Project is not completed and a failure occurs, the consequence is that gas will be lost out of the formation. If the casing fails, the Company can no longer safely operate Well #5 and this well would have to be shut-in, plugged and abandoned. Additionally, this storage facility is used to maintain gas supply during the winter and the loss of gas will impact the Company s ability to serve. In addition, this may require the Company to purchase spot gas on the market in the event of a cold winter. Rocky Mountain prioritized this high-risk gas infrastructure project due to the consequences of environmental impacts due to the release of natural gas and the economic impact to customers. Risk Output: Not Applicable to this SSIR Project due to the SIMP risk model is currently being developed. Project Hierarchy: High Other (Pipeline Safety) 13 Referred to in Attachment MMA-10 as Wolf Creek Well #5 Replacement. 22