artorne1s al law - puc.state.pa.us al law 17 north second street 12th floor ... 100 pine street p0...

SCHEjj[_, ArTORNE1S Al LAW

17 North Second Street 12th Floor Harrisburg, PA 17101-1601 717-731-1970 Main 717-731-1985 Main Fax www.postschell.com

Michael W. Hassell

[email protected] 717-612-6029 Direct 717-731-1985 Direct Fax File#: 153886

January 2, 2013

Rosemary Chiavetta Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street, 2nd Floor North P.O. Box 3265 Harrisburg, PA 17105-3265

RE: Petition of Columbia Gas of Pennsylvania, Inc. for Approval of a Distribution System improvement Charge Docket No. P-2012-2338282

Dear Secretary Chiavetta:

Enclosed for filing please find the Petition of Columbia Gas of Pennsylvania, Inc. for Approval of a Distribution System Improvement Charge. Also enclosed is a CD containing a copy of this filing. Copies will be provided as indicated on the Certificate of Service.

Respectfully submitted, ,

Michael W. Hassell

MWH/skr Enclosures cc: Paul T. Diskin

Robert D. Horensky Bohdan Pankiw Esquire Certificate of Service

ALLENTOWN HAISHUHG LANCASTER PEILADELPBA PFUrSBURGH PRINCETON WAS HNGTON, D.C.

A PENN5YLVARA PRFSINAL CORPoRA1cN

10327756v1

CERTIFICATE OF SERVICE

I hereby certify that true and correct copies of the foregoing have been served upon the following persons, in the manner indicated, in accordance with the requirements of § 1.54 (relating to service by a participant).

VIA FIRST CLASS MAIL:

Regina L. Matz Esquire Allison C. Kaster, Esquire Bureau of Investigation and Enforcement Commonwealth Keystone Building 400 North Street, 2nd Floor West P0 Box 3265 Harrisburg, PA 17105-3265

Daniel G. Asmus, Esquire Office of Small Business Advocate 300 North Second Street, Suite 1 102 Harrisburg, PA 17101

Tanya J. McCloskey, Esquire Brandon J. Pierce, Esquire Office of Consumer Advocate 555 Walnut Street Forum Place, 5th Floor Harrisburg, PA 17101-1923

Joseph L. Vullo, Esquire Burke Vullo Reilly Roberts 1460 Wyoming Avenue Forty Fort, PA 18704

Patrick M. Cicero, Esquire Harry S. Geller, Esquire Peimsylvania Utility Law Project 118 Locust Street Harrisburg, PA 17101

Thomas J. Sniscak, Esquire William E. Lehman, Esquire Hawke McKeon & Sniscak LLP 100 North Tenth Street P0 Box 1778 Harrisburg, PA 17105

Todd S. Stewart, Esquire Steven K. Haas, Esquire Hawke McKeon & Sniscak LLP 100 N, 10th Street P0 Box 1778 Harrisburg, PA 17101

Charis Mincavage, Esquire Elizabeth P. Trinkle, Esquire MeNees Wallace & Nurick LLC 100 Pine Street P0 Box 1166 Harrisburg, PA 17108-1166

Anastasia Stratigos a/k/a Stacy Stratigos 1410 Key Avenue Pittsburgh, PA 15216

Date: January 2, 2013 Michael W. Flassell

10274843v1

BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION

Petition of Columbia Gas of Pennsylvania, Inc. for Approval of a Distribution System : Docket No. P-2012-23 38282 Improvement Charge

Petition of Columbia Gas of Pennsylvania for Approval of a Distribution System Improvement Charge

Pursuant to 66 Pa. C.S. § 1353, Columbia Gas of Pennsylvania, Inc. ("Columbia" or the

"Company") hereby files this Petition seeking approval of a Distribution System Improvement

Charge ("DSIC"). This filing is being made pursuant to the Final Implementation Order of the

Pennsylvania Public Utility Commission (the "Commission") entered at Docket No. M-2012-

2293611 on August 2, 2012. Columbia has undertaken a significant distribution system

infrastructure evaluation, repair and replacement program that is focused primarily on those

portions of its system that were constructed using cast iron and bare steel pipe. The DSIC will

allow Columbia to continue this process without the risk of uncertainty or delay.

By this Petition, the Company respectfully requests that the Commission approve

Columbia's Distribution System Improvement Charge effective March 1, 2013.

I. INTRODUCTION

1. Columbia is a corporation organized and existing under the laws of the

Commonwealth of Pennsylvania. Columbia is engaged in the business of selling and distributing

natural gas to retail customers within the Commonwealth, and is therefore a "public utility"

Implementation ofAct 11 of2012, Docket No. M-20 12-2293611, entered on August 2, 2012. ("Final Implementation Order").

I I 0327585v1

within the meaning of Section 102 of the Public Utility Code, 66 Pa. C.S. § 102, subject to the

regulatory jurisdiction of the Commission. Columbia provides natural gas service to

approximately 415,000 customers in 26 counties of Pennsylvania, pursuant to certificates of

public convenience granted by the Commission.

2. The names, addresses and telephone numbers of Columbia's attorneys for

purposes of this filing are as follows:

Michael W. Hassefl (ID # 34851) Jessica R. Rogers (ID # 309842) Post & Schell, P.C. 17 North Second Street 121h Floor Harrisburg, PA 1710 1-1601 Phone: 717-731-1970 Fax: 717-731-1985 E-mail: [email protected] E-mail: [email protected]

Theodore J. Gallagher (ID # 90842) Kimberly S. Cuccia (ID # 308216) NiSource Corporate Services Company Energy Distribution Group Legal 121 Champion Way, Suite 100 Canonsburg, PA 15317

Columbia's attorneys are authorized to receive all notices and communications regarding this

filing.

3. On February 14, 2012, Governor Corbett signed into law Act Il of 2012 ("Act

11"), which amends Chapters 3, 13 and 33 of Title 66 of the Public Utility Code ("Code")

Pertinent to this Petition, Act 11 authorizes natural gas distribution companies ("NGDCs") to

establish a distribution system improvement charge ("DSIC")

4. Act 11 provides utilities with the ability to implement a DSIC to recover

reasonable and prudent costs incurred to repair, improve or replace certain eligible distribution

2 I O327585vJ

property that is part of the utility's distribution system. Eligible property for NGDCs is defined

in § 1351 of the statute. See 66 Pa. C.S. § 1351(2). As a precondition to the implementation of a

DSIC, each utility must file a Long Term Infrastructure Improvement Plan ("LTIIP") with the

Commission that is consistent with the provisions of § 1352 of the statute. See 66 Pa. C.S. §

13 52(a).

5. On May 10, 2012, the Commission issued its Tentative Implementation Order,

and solicited comments and input. Columbia responded to the Commission's request and filed

comments on the Tentative Implementation Order on June 6, 2012,

6. On August 2, 2012, the Commission issued the Final Implementation Order

establishing procedures and guidelines necessary to implement Act 11. The Implementation

Order adopts the requirements established in Section 1353 for the DSIC filing. In addition, the

Commission provided a model tariff which the utilities were instructed to use in preparing their

DSIC tariff.

7. Specifically, Section 1353 requires utilities to file a petition seeking Commission

approval of a DSIC. The statute lays out four major requirements including the following:

(a) An initial tariff that complies with the model tariff adopted by the Commission, which will include:

(i) A description of eligible property;

(ii) The effective date of the DSIC;

(iii) Computation of the DSJC;

(iv) The method for quarterly updates of the DSIC; and

(v) A description of consumer protections.

(b) Testimony, affidavits, exhibits, and other supporting evidence demonstrating that the DSIC is in the public interest;

(c) A LTIIP, as described in Section 1352; and

3 1 03275 85v1

(d) Certification that a base rate case has been filed within five years prior to the filing of the DSIC petition.

8. Columbia's Petition addresses each of the elements listed in the statute.

II. COLUMBIA'S DSLC

A. COLUMBIA'S TARIFF COMPLIES WITH THE COMMISSION'S MODEL TARIFF

9. Columbia's proposed Tariff Supplement No. 194 is included with this Petition,

and is discussed in detail in the testimony of Nancy Krajovic, Columbia Statement No. 1.

Columbia developed its proposed tariff in compliance with the model tariff included in the

Commission's Implementation Order, as required by § 1353. As described below, Columbia's

proposed tariff contains all of the statutory elements listed in § I 353(b)(1), and, therefore, should

be approved by the Commission.

1. Description of Eligible Property

10. Columbia has included the same eligible property in both its DSTC and its LTIIP,

as that term is defined in § 135 1(2). Eligible property includes the following: piping, couplings,

gas service lines, valves, excess flow valves, risers, meter bars, meters, unreimbursed costs

related to highway relocation projects, and other related capitalized costs. Columbia's LTIIP

describes in detail its plans for replacing the DSIC-eligible property described in § 1351(2) and

contained in the DSIC.

2. Effective Date of the DSIC

11. Columbia is requesting permission to implement its DSIC for bills rendered on

and after March 3, 2013.

3. Computation of USIC

12. Columbia's DSIC will be calculated consistent with the Commission's model

tariff. Columbia has used a rate of return on equity ("ROE") of 10.4% in calculating its DSIC,

10327585v1

which is based on the Commission's decision in PPL Electric Utilities Corporation's fully-

litigated base rate proceeding at Docket No. R-201 2-2290597. Columbia selected this number

based on its consistency with the DSIC ROE of 10.46% proposed by the Utility Sub-Group in

the Commission's Act 11 ROE Working Group. When the Commission publishes an ROE to be

used for DSIC purposes, Columbia will revise its compliance filing to reflect the allowed ROE.

13. Columbia has based its projected quarterly revenues on one-fourth of its projected

annual distribution revenues, which is consistent with one of the two options made available to

utilities in the Commission's model tariff. Columbia has chosen to use one-fourth of its

projected annual distribution revenues in order to make the DSIC more simple and reflective of

the fixed nature of Columbia's investments.

4. Quarterly Updates

14. The DSIC will be updated on a quarterly basis to reflect eligible plant additions

placed in service during the three-month period ending one month prior to the effective date of

any DSIC update. Columbia has provided a chart of the effective dates of its proposed DSIC

updates, and the corresponding period for eligible plant additions that will be reflected in each

update, as part of the DSIC tariff language included in Supplement No. 194..

15. Once Columbia has implemented its DSIC, customers will receive notice of

quarterly changes in the DSIC through bill messages. This is consistent with Act 1 1 and the

Commission's Final Implementation Order.

5. Consumer Protections

16. The Commission's model tariff includes customer safeguards in its structure

which Columbia has adopted as part of its proposed tariff. These safeguards include: (1) a 5.0%

cap on the total amount of revenue that can be collected by the Company as determined on an

annualized basis, (2) annual reconciliations performed by Columbia, (3) audits conducted by the

5 I 0327585v1

Commission, (4) customer notice of any changes in the DSIC, (5) a reset of the DSIC to zero as

of the effective date of new base rates that include the DSTC-eligible plant, and (6) provisions for

the charge to be set at zero if, in a quarter, Columbia's most recent earnings report shows that

Columbia is earning a rate of return that exceeds the allowable rate of return used to calculate its

fixed costs under the DSIC.

B. COLUMBIAS ftSIC IS IN THE PUBLIC INTEREST

17. Implementing Columbia's proposed DSIC tariff is in the public interest because

the DSIC will ensure that customers will continue to receive safe and reliable service in the

future as required by 66 Pa. C.S. § 1501.

18. Portions of Columbia's system date back to the late 1800s. Construction

materials used for natural gas pipelines have evolved dramatically over the more than 100 years

since the first pipelines in Columbia's system were constructed, and many of the historic

materials used for constructing pipelines have subsequently been found to weaken significantly

as they age. In the oldest portions of Columbia's system, cast iron was used because at the time

of construction it was considered relatively strong and easy to install. Cast iron, however, is

vulnerable to breakage from ground movement. As a result, the industry transitioned to bare

steel and wrought iron piping by the early 1900s, which was popular until the 1960s. A

significant portion of Columbia's system is composed of bare steel. Bare steel is subject to

corrosion. Finally, as the industry moved to the use of plastic piping starting in the 1970s, a

material called Aldyl-A was used. However, Aldyl-A is vulnerable to stress propagation

cracking.

19. Columbia determined that there are an increasing number of leaks in areas with a

high concentration of aging pipe. In fact, corrosion on first generation mains and services

represents over 85% of all the leakage that occurs annually on mains in the Columbia

6 03275 85v1

distribution system. Bare steel and cast iron mains are at least 16 times more likely to experience

leakage than plastic or cathodicaily protected facilities. In 2007, Columbia determined that it

needed to address the situation with a major distribution infrastructure replacement program.

20. Columbia has replaced approximately 2,595,167 feet of pipe since the beginning

of 2007. In 2011 alone, Columbia replaced 533,765 feet of bare steel and cast iron pipe.

Another 510,000 feet are anticipated to be replaced by year end 2012. As a result of its program,

the Company has reduced open Class 2 leaks by nearly 50% since 2007.

21. Columbia believes that replacement of aging distribution equipment and facilities

will reduce the number of leaks on its system, allow it to install additional safety mechanisms,

and will generally improve service to its customers. The DSIC will allow Columbia to continue

its already accelerated pace for replacing its distribution infrastructure.

22. Columbia's infrastructure replacement program will also allow the distribution

system to operate at higher pressures. Higher pressures will substantially reduce the current need

for pressure regulators, thereby making the system safer, easier and more reliable to operate. A

distribution system operating at these higher pressures also will enable Columbia to install

additional new safety devices in areas to be upgraded. This includes excess flow valves, which

will shut off gas to a residence or business in the event of a large pressure differential, which is

typically indicative of a major gas leak or a service damaged by excavation. The DSIC will

allow Columbia to remove deteriorating portions of its system and enhance the safety of its

system by ensuring replacement of facilities with new, longer lasting and safer materials. The

public will receive better service, with fewer interruptions.

23. Further details with regard to why the DSIC is in the public interest are provided

in Columbia's LTIIP.

VA I 03215 85v1

C. COLUMBIA'S LTIIP COMPLIES WITH SECTION 1352 01? ACT 11

24. Columbia's LTIIP, which is attached as Exhibit NJDK-2 to Ms. Krajovic's

testimony, was filed with the Commission on December 7, 2012 at Docket No. P-2012-233 8282.

Columbia's LTIIP is in accordance with the Commission's Implementation Order and the

statute.

25. Based on Columbia's LTIIP, over the next 5 years, the Company anticipates

replacing approximately 2,800,000 feet of cast iron and bare steel main. In addition to its mains,

Columbia anticipates that it will replace 7,000 to 9,000 service lines per year and approximately

2,000 to 4,000 meters annually over the next five years.

26. Starting in 2007, Columbia doubled the rate at which it replaced its aging mains.

Columbia's LTIIP proposes that the Company maintain its accelerated main replacement

program, with more than 500,000 feet of main replacement proposed for each of the plan's five

years. The projected average annual spending of $131,480,000 on infrastructure replacement

from 2013 through 2017 represents a significant increase over the average annual investment of

$78,338,500 during the years 2007 through 2012.

27. Columbia reassesses its system, and projects are reprioritized each year based on

the most current data available. As such, the list of distribution improvement projects is a

dynamic roster that is subject to modification based on emerging conditions. Columbia

maximizes efficiencies and minimizes costs by addressing large segments of the system, and

carrying out replacements on a planned, systemic basis. Not only does this process ensure

effective use of resources, it minimizes disruption to the customers and municipalities that

Columbia serves, By including the integration of Columbia's program work with State and

municipal improvements in the systemic approach, costs are minimized.

8 I 03275 85v I

D. BASE RATE CASE CERTIFICATION

28. As part of its filing, a utility is required to certify that it has filed a base rate case

within the five years prior to the date of its DSIC petition. 66 Pa.C.S. §1353(b) (4).

29. Columbia has provided the required certification as Exhibit NJDK-3 to Ms.

Krajovic's testimony. Columbia filed its last base rate case under which Columbia's current

base rates were established on January 14, 2011. The case was substantially settled with no

specification of a rate of return on equity. The Commission entered its Final Order in

Columbia's rate case on October 14, 2011, at Docket No. R-2010-2215623. In addition,

Columbia has currently pending before the Commission a base rate case at Docket No. R-2012-

2321748, which was filed on September 28, 2012.

E. CUSTOMER NOTICE

Consistent with Act 11 and the Commission's Final Implementation Order, customers will

receive notice of the initial filing of the proposed DSIC through bill inserts beginning at the time

of filing and continuing throughout a 30-day billing cycle. Columbia will begin the bill insert

process on January 2, 2013, concurrent with this filing.

9 I 0327585v1

IlL CONCLUSION

WHEREFORE, Columbia Gas of Pennsylvania. Inc. respectfully requests that the

Pennsylvania Public Utility Commission find that its Distribution System Improvement Charge

contains all necessary items identified in § 1353, and that the Pennsylvania Public Utility

Commission approve Columbia's Distribution System Improvement Charge with an effective

date of March 1, 2013.

Respectfully submitted,

,1 /7CeJt4.Jt (,i) fbA-1Li

Theodore J. Gallagher (ID #90842) Michael W. Hassell (ID #34851) Kimberly S. Cuceia (ID # 308216) Jessica R. Rogers (ID # 309842) Columbia Gas of Pennsylvania, Inc. Post & Schell, P.C. 121 Champion Way, Suite 100 17 North Second Street Canonsburg, PA 15317 12th Floor Phone: 724-416-6347 Harrisburg, PA 17101-1601 Fax: 724-416-6384 Phone: 717-731-1970 E-mail: [email protected] Fax: 717-731-1985

[email protected] E-mail: [email protected] E-mail: jrogerspostschell.com

Of Counsel:

Post & Schell, P.C. Attorneys for Columbia Gas of Pennsylvania, Inc.

Date: January 2, 2013

10 10327585v!

VERIFICATION

I, Nancy J. D. Ktajovic, hereby state that the facts above set forth are true

and correct (or are true and correct to the best of my knowledge, information and

belief) and that I expect to be able to prove the same at a hearing held in this

matter. I understand that the statements made herein are made subject to the

penalties of i8 Pa. C.S. § 4904 (relating to unsworn falsification to authorities).

Date: January 2, 2013

Nancy J. 6. Krajovic Director, Rates and Regulatory Affairs Columbia Gas of Pennsylvania, Inc.

Supplement No. 194 to Tariff Gas - Pa. P.U.C.No. 9

COLUMBIA GAS OF PENNSYLVANIA, INC.

121 Champion Way, Suite 100 Canonsburg 1 Pennsylvania

RATES AND RULES

FOR

FURNISHING GAS SERVICE

IN

THE TERRITORY AS DESCRIBED HEREIN

ISSUED: January 2, 2013

EFFECTIVE: March 3, 2013

ISSUED BY: M. R. KEMPIC, PRESIDENT 121 CHAMPION WAY, SUITE 100

CANONSBURG, PENNSYLVANIA 15317

NOTICE

This Tariff Supplement Makes Changes to the Existing Tariff —See Page No. 2

Supplement No. 194 to Tariff Gas - Pa. P.U.C. No. 9

One-Hundred Sixty-ninth Revised Page No. 2 Columbia Gas of Pennsylvania, Inc. Canceling One-Hundred Sixty-eighth Revised Page No. 2

LIST OF CHANGES MADE BY THIS TARIFF SUPPLEMENT Page Page Description Revision Description

Cover Tariff Cover Page Supplement #, Effective & Issue Date.

2 LIstof Changes List of Changes.

4 Table of ContenLs Added Rider DSIC - Distribution System Improvement Charge.

16 Rate Summary Pages Added a footnote to include Rider DSIC where applicable.



19 Rate Surrimary Pages Added a footnote to include Rider OSlO where applicable.

20 Rate Summary Pages Added a footnote to Include Rider OSlO where applicable.

21 Rider Summary Page Added Rider DSIC.

68 Flexible Rate Provisions Added Rider DSIC.

76 Rate RSS Added Distribution System Improvement Charge.

78 Rate RDS Added Distribution System Improvement Charge.

82 Rate RDGSS Added Distribution System Improvement Charge.

85 Rate RDGDS Added Distribution System improvement Charge.

87 Rate SGSS Added Distribution System Improvement Charge.

90 Rate SGDS Added Distribution System Improvement Charge.

94 Rate SCD Added Distribution System improvement Charge.

97 Rate SDS Added Distribution System Improvement Charge.

101 Rate LGSS Added Distribution System Improvement Charge.

105 Rate LDS Added Distribu lion System Improvement Charge.

lOB Rate MLSS Added Distribution System Improvement Charge.

112 Rate MLDS Added Distribution System Improvement Charge.

177- 180

Rider DSIC-Distribution System Improvement Charge

Added entire text.

Issued: January 2, 2013 M. R. Kempic Effective: March 3, 2013 President

Supplement No. 19410 Tariff Gas - Pa. P.U.C. No. 9

Sixty-first Revised Page No. 4 Columbia Gas of Pennsylvania Inc. Canceling Fifty-ninth Revised Page No. 4

Table of Contents (conVd)

Rate Schedules (cont'd): Sheet No.

SGDS - Small General Distribution Service 89

SCD - Small Commercial Distribution 93

SDS - Small Distribution Service 96

LOSS - Large General Sales Service 100

LDS - Large Distribulion Service 103

MLSS - Main Line Sales Service 107

MLDS - Main Line Distribution Service 111

NCS - Negotiated Contract Service 115

NSS - Negottated Sales Service 117

SDSS - Supplier Default Sales Service 122

Held for Future Use 124

CDS - Cogeneration Distribution Service 125

GDS - Generation Distribution Service 127

NGV - Natural Gas Vehicle Service 129

PS - Propane Service 132

SS - Standby Service 134


DGDS —Distributed Generation Distribution Service 137

CAP - Customer Assistance Plan 139

Held for Future Use 144- 145

Rider USP - Universal Service Plan 146

Rider CC - Customer Choice 148

Rider EDS - Economic Development Service Rider 149

Purchased Gas Cost Rider 151


Held for Future Use 161 -164

State Tax Adjustment Surcharge - STAS 165

Rider EBS - Elective Balancing Service 166

Held for Future Use 174- 176

Rider DSIC - Distribution System Improvement Charge 171- 180

Rules Applicable to Distribution Service - RADS:

1. Definitions 181

2, Rules Applicable to All Distribution Service 186

2.2. Electronic Communications 186

2.3. Initial Gas Application 186

2.4. NGS Creditworthiness 187

2.5. Character of Distribution Service 188b

(C)

(C)

(C) Indicates Change

Issued: January 2, 2013 - M. R. Kempic Effective: March 3, 2013 President


Sixty-ninth Revised Page No. 16

Columbia Gas of Pennsytvania, Inc. Canceling Ixty-eiglitl1 EeviSed rage NO. lb

Rates per thm

Total Distribution Gas Supply Gas Cost Effective

Retail Service Rate Schedules Charge Charge Adjustment Rate 1/ 3141

Rate RSS - Residential Sales Service Monthly Customer Charge $ 18.73 - - 18.73

Commodity Charge: First2l thms per month 0.1621D 0.42150 2/ 0.00177 0.58537 Over 21 thms per month $ 0.42918 0.42150 2/ 0.00177 0.85245

Customer Transferring from Rate Schedule RDS First 21 thrns per month $ 0.16210 0.42150 2/ - 0.58360 Over 21 thms per month $ 0.42918 0.42150 2/ - 0.85068

Rate SGSS - Small General Sales Service Monthly Customer Charge:

Annual Throughput< 6438thms $ 20.18 - - 20.18 Annual Throughput >= 6438 thms and <= 64380 thms $ 32.09 - - 32.09

Commodity Charge $ 0.32197 0.42150 21 0.00177 0.74524

Customers Transferring from Rate ScheduLe SCD $ 0.32197 0.42150 21 - 0.74347

1/Includes applicable charges for Riders CC, POC, and USP. 2/ Does not reflect the unbundling of uncollectibles related to gas costs. See applicable rate schedule for details. 3/ Excludes State Tax Adjustment Surcharge. See Page 165 herein for detail. 4) Does not include the Rider DSIC. See Page 21 and Pages 177-1 80 herein for details.

Issued: January 2, 2013 M. R. Kempic - President Effective: March 3, 2013


Thirty-ninth Revised Page No. 17 Uolumbla cias el Iennsylvania, inc. tanceiing I nlriy-elgntn mevisea rage rio.

Rates per thm


Retail Service Rate Schedules

Charge Charge Adjustment Rate 1/2/

Rate LGSS - Large General Sales Service

Monthly Customer Charge: Annual Throughput < 107300 thms $ 125.12 - - 125.12

Annual Throughput >= 1 07,300 thms but < 536489 thms $ 469.34 - 469.34

Annual Throughput > 536,489 thms but < 1072.989 thms $ 1149.00 - - 1149.00 Annual Throughput >= 1072,989 thms but <3,219000 thms $ 2,050.00 - - 2,050.00 Annual Throughput >= 3219,000 thms but < 7,510,990 thms $ 4,096.00 - - 4,096.00 AnnualThroughput> 7,510,989thms $ 7,322.00 - - 7,322.00

Commodity Charge: First 10,730 thms per Month $ 0.28628 0.39302 0.00177 0.68107

Next 42,920 thms per Month $ 0.28094 0.39302 0.00177 0.67573 Next 53,650 thms per Month $ 0.27777 0.39302 0.00177 0.67256 All thm per Month Over 107,300 $ 0.25803 0.39302 0.00177 0.65282

Rate MLSS - Main Line Sales Service Monthly Customer Charge:

Annual Throughput > 268250 thms but < 536,500 thms $ 469.34 - - 469.34 Annual Throughput >= 536,500 thms but < 1,073,000 thms $ 1,149.00 - - 1,149.00 Annual Throughput >= 1073,000 thms but < 3,219,000 thms $ 2,050.00 - - 2,050.00 Annual Throughput > 3,219,000 thms but <7,611,000 thms $ 4,096.00 - - 4,096.00 Annual Throughput > 7,511,000 thms $ 7,322.00 - - 7,322.00

Commodity Charge: MLS-1 $ 0.15322 0.39302 0.00177 0.54801

MLS-ll AnnualThroughput< 1,073,000thms $ 0.19651 0.39302 0.00177 0.59130 Annual Throughput >= 1,073,000 thms but < 3,219,000 thms 0.18858 0.39302 0.00177 0.58337 Annual Throughput >= 3,219,000 tbms but < 7,511,000 thms $ 0.18253 0.39302 0.00177 0.57732 Annual Throughput >= 7,511,000 thma $ 0.17736 0.39302 0.00177 0.57215

Rate SS - Standby Service $0.77306 per thm based on a customer's Maximum Daily Firm I Requirement. See Pages 134-136 herein for detail.

11 Excludes State Tax Adjustment Surcharge. See Page 165 herein for detail, 2/Does not include the Rider DSIC. See Page 21 and Pages 177-180 herein for details.

lsi.pd .laniiaru 2 7 n1_'I Effective: March 3. 2013

M. R. Kempic - President


Sixty-sixth Revised Page No. 18 LolumIa ias ci Pennsyivania, Inc.

Distribution Service Rate Schedules

Canceling Sixty-fifth Revised Page No. 18

Rates per thm


Charge Charge Adjustment Rate 1/ 3/4/

Rate RDS - Residential Distribution Service Monthly Customer Charge $ 18.73 Distribution Charge:

Customers Electing CHOICE - 1st Year First 21 thms per month $ 0.16210 Over 21 thms per month $ 0.42918

Customers Electing CHOICE - 2nd Year First 21 thms per month $ 0.16210 Over 21 thms per month $ 0.42918

Rate SCD - Small Commercial Distribution Monthly Customer Charge:

Annual Throughput < 6,438 thms $ 20.18 Annual Throughput >= 6,438 and <= 64,380 thms $ 32.09

Distribution Charge: Customers Electing CHOICE - 1st Year $ 0.32197 Customers Electing CHOICE - 2nd Year $ 0.32197

Rate SGDS - Small General Distribution Service Monthly Customer Charge:

Annual Throughput < 6,438 thms $ 20.18 Annual Throughput >= 6,438 and <64380 thms $ 32.09

Distribution Charge: Priority One DS $ 0.35045 Non-Priority One DS $ 0.20658

Monthly Customer Charge: Annual Throughput >= 64,380 thms and < 107,300 thms $ 125.12 Annual Throughput >= 101,300 thms and <536,490 thms $ 469.34

Distribution Charge $ 0.11416

11Includes applicable charges for Riders CC, PGC, and USP. 2) Subject to the terms and provisions of Rider EBS. 31 Excludes State Tax Adjustment Surcharge. See Page 165 herein for detail. 41 Does not include the Rider DS[C. See Page 21 and Pages 177-180 herein for details.

Issued: January 2. 2013

- - 18.73

- 0.00177 0.16387 - 0.00177 0.43095

- - 0.16210 - - 0.42918

- - 20.18 - - 32.09

- 0.00177 0.32374 - - 0.32197

- - 20.18 - - 32.09

- - 035045 21 - 0.20658

- - 125.12 - - 46934

21 - 0.11416

Fffpctivp Mrh A 9511

M. R. Kern pic - President


Eleventh Revised Page No. 19 Columbia Uas ot Pennsylvania, Inc. Canceling Ninth Revised Page No. 19

Rates per thm


Charge Charge Adjustment Rate 2/3/

$ 1,227.00 - - 1,227.00 $ 2,190.00 - - 2190.00 $ 4,526.00 - - 4526.00 $ 7,322.00 - - 7322.00

$ 0.09270 1/ - 0.09270 $ 0.08114 1/ - 0.08114 $ 0.06716 1/ - 0.06716

Distribution Service Rate Schedules

Rate LDS - Large Distribution Service Monthly Customer Charge:

Annual Throughput => 536,500 thms but < 1,073000 thms Annual Throughput >= 1,073,000 thms but <3,219,000 thms Annual Throughput >= 3,219,000 thms but <7,511000 thms Annual Throughput >= 7,511,000 thms

Distribution Charge: Annual Throughput => 536,500 thms and < 1073,000 thms Annual Throughput >= 1073,000 thms but < 3,219,000 thms Annual Throughput >= 3,219,000 thrns

Rate MLDS - Main Line Distribution Service Monthly Customer Charge:

Annual Throughput >= 268,250 thms and < 536,500 thms $ 469.34 - - 469.34 Annual Throughput >= 536,500 thms but < 1073,000 thms $ 1,149.00 - - 1,149.00 Annual Throughput >= 1,073,000 thms but <3,219,000 thms $ 2,050.00 - - 2,050.00 Annual Throughput >= 3,219,000 thms but < 7,511,000 thms $ 4096.00 - - 4,096.00 Annual Throughput >= 7,511,000 thms $ 7,322.00 - - 7,322.00

Distribution Charge: MLS-1 $ 0.00935 1/ - 0.00935 MLS-Il

Annual Throughput < 1,073, 000 thms $ 0.05264 1/ - 0.05264 Annual Throughput >= 1073,000thms but< 3,219,000 thms $ 0.04471 11 - 0.04471 Annual Throughput > 3,219,000 thms but < 7,511000 thms $ 0.03866 1/ - 0.03866 Annual Throughput > 7,511,000 thms $ 0.03349 1/ - 0.03349

11 Subject to the terms and provisions of Rider EBS. 2/ Does not reflect the State Tax Adjustment Surcharge. See Page 165 herein for detail. 3/ Does not include the Rider DSIC. See and Pages 177-180 heretn for details. ued: January 2, 2013 Effective: March 3, 2013

Issued by: M. R. Kempic - President

Supplement No. 194 to Tariff Gas - Pa P.U.C. No. 9

Sixty-sixth Revised Page No. 20 (.;oiumLHa (ias ot F'ennsylvania, Inc. (.;ancellng ixty-Tu1tfl hevisec1 iage NO. ZU

Rates per thrn


Retail Service and Distribution Service Rate Schedules Charge Charge Adjustment Rate 1/ 2/ 3141

Rate RDGSS - Residential Distrbuted Generation Sales Service Monthly Customer Charge 18.73 - - 18.73

Commodity Charge; First 21 thms per month 0.16210 0.42150 2/ 0.00177 0.58537 Over 21 thms per month $ 0.42918 0.42150 21 0.00177 0.85245

Customers Transferring from RDGDS or RDS Commodity Charge: $ 0.16210 0.42150 21 - 0.58360

First 21 thms per month $ 0.42918 0.42150 2/ - 0.85068 Over 21 thms per month

Rate RDGDS - Residential Distrbuted Generation Distribution Service Monthly Customer Charge $ 18.73 - - 18.73

Commodity Charge: First 21 thms per month $ 0.16210 - - 0.16210 Over 21 thms per month $ 0.42918 - - 0.42918

1/Includes applicable charges for Riders CC, PGC, and USP. 21 Does not reflect the unbundling of uncollectibles related to gas costs. See applicable rate schedule for details 3/ Excludes State Tax Adjustment Surcharge. See Page 165 herein for detail. 4/ Does not include the Rider DSIC. See Page 21 and Pages 177- 180 herein for details. ued: January 2. 2013 Effective: March 3, 2013

M. R. Kempic - President


Seventy-fourth Revised Page No. 21

Columbia Gas ot Pennsylvania, Inc. Gancelin

Revised E'age NO. Zi

Rates per thm

Riders Rate

Applicable Rate Schedules

$1 thm

Customer Choice - Rider CC Capacity Choice Administration

Columbia Gulf Transmission Refund

Columbia Gulf and Columbia Gas Transmission Casho ut/Penalty Credit Proceeds

Universal Service Plan - Rider USP

Distribution System Improvement Charge - Rider DSIC

Elective Balancing Service - Rider EBS Option 1 - Small Customer Option 1 - Large Customer

Option 2- Small Customer Option 2 - Large Customer

Purchased Gas Cost - Rider PGC Demand

Cost of Gas E-Factor Total

Commodity Cost of Gas E-Factor Total

Total Purchased Gas Cost Rate

January 2.

- RSSIRDS - SGS/SGDS/SCD/PS

(0.00133) SGSS

(0.00053) SGSS/SGDSISCD

0.04671 RSS/RDS/RDGSS/RDGDS

1.9% This percentage is applied to a portion of the Distribution Charge and the Customer Charge. See Pages 177-180 for Rider DSIC details.

0.02103 SGDS/SDS 0.00896 LDS1MLS

0.00697 SGDS/SDS 0.00226 LDS/MLS

0.13097 0.01290 0.14387

0.39302 0.00177

RSS/RDGSSJSGS/LGSS/M LSS

Effective: March 3. 2013

M. R. Kern plc - President

Supplement No. 194 to Tariff Gas - Pa. P.U.C. No.9

Third Revised Page No. 68 Columbia Gas of Pennsylvania, Inc. Canceling Second Page No. 68

RULES AND REGULATIONS GOVERNING THE DISTRIBUTION AND SALE OF GAS (Continued)

20. Flexible Rate Provisions

20.1 Applicability

Customers receiving service under Rate Schedules SDS, LDS, RSS, RDS, RDGSS, RDGDS, DGDS, PS, SGSS, LGSS, SGDS, SCE, SS, NSS, MLSS, and MLDS ("Primary Schedule") may be charged a flexible distribution charge with respect to competition from alternate fuels.. Service under Rate RSS, RDS, RDGSS and RDGDS shall be firm and the Company will maintain firm capacity to serve such customers. Gas Costs to Rate Schedules RSS and RDS will not be flexed.

20.2 Election of Flexible Rate

Components of a customer's rate may be lowered when the customer submits a sworn affidavit that a lower rate is required to meet competition from an alternate fuel. Rate components eligible for a downward adjustment include the distribution charge, the elective balancing service charge for distribution service, the Rider DSIC and the retainage percentage for distribution service. (C)

Prior to flexing distribution charges for distribution service customers, the Company may reduce charges that are for recovery of balancing service charges under Rider EBS and/or the retainage percentage applied to the gas received on behalf of the distribution service customer. However, any discount to the retainage percentage undertaken to compete with another NGDC will not be recoverable by the Company in its annual 1307(f) filing.

The Company reserves the right to verify the accuracy of statements included in this affidavit and the right to make final determination as to the quantities of natural gas used in each billing period in place of alternate fuels. The Company will notify customer of the applicable charge, if lower than the applicable distribution charge in the Primary Rate Schedule, that the Company determines is required to meet the delivered price of the alternate fuel four (4) days prior to the beginning of each billing month unless the rate is the same as charged by the Company in the prior month.

The Company will only lower its distribution charge below the maximum rate under the Primary Rate Schedule as a last resort, and only to the extent it is necessary to meet (he demonstrated competitive alternate fuel price. Any lowered distribution charge shall be offered regardless of whether the customer is receiving sales or distribution service. For customers eligible for service under Rate RDS and SCD, the Company will advise NGSs upon request whether a particular customer is receiving or is eligible to receive a lowered distribution charge.




Forty-first Revised Page No. 76 Columbia Gas of Pennsylvania, Inc. Canceling Thirty-ninth Revised page No. 76

RATE RSS - RESIDENTIAL SALES SERVICE

APPLICABILITY

Throughout the territory served under this Tariff.

AVAILABILITY

Available, at one location, for the total requirements of any residential customer.

RATE

The customers under this rate schedule shall be subject to a monthly customer charge, a natural gas supply charge and a distribution charge.

The rate information is detailed in the Rate Summary pages of this tariff.

If a customer transfers to this rate from Rate RIDS-Residential Distribution Service then for a period of twelve months, the rate shall be adjusted to exclude the amount per thrn equal to the E' Factor for the twelve months ended September30 included in the then applicable Purchased Gas Commodity Rate.

The above distribution charge may be flexed in accordance with the Flexible Rate Provisions set forth in the Rules and Regulations of this Tariff.

The PGCC and Capacity Assignment Credit (aka the Price-to-Compare) will be increased by 1 .52% to reflect the unbundling of uncollectibles related to gas costs.

MINIMUM MONTHLY CHARGE

The minimum monthly charge shall be the customer charge.

STATE TAX ADJUSTMENT SURCHARGE

The charges described in this rate schedule are subject to a State Tax Adjustment Surcharge as set forth in this tariff.

PURCHASED GAS COST RIDER

The distribution and natural gas supply charges include recovery of purchased gas costs pursuant to the Purchased Gas Cost Rider of this tariff.

USP COSTS AND CUSTOMER CHOICE COSTS

The distribution charge is subject to Rider Universal Services Plan and Rider Customer Choice as specified within Rider USP and Rider Customer Choice in this tariff.

DISTRIBUTION SYSTEM IMPROVEMENT CHARGE

(C)

Rate RSS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.




Thirty-eighth Revised Page No. 78 Columbia Gas of Pennsylvania, Inc. Canceling Thirty-sixth Revised Page No. 78

RATE RDS - RESIDENTIAL DISTRIBUTION SERVICE

APPLICABILITY

Throughout the territory served under this Tariff.

AVAILABILITY

Available to any residential customer meeting the following conditions:

1. The customer does not take service under any other rate schedule.

2. The customer or group of customers have an aggregate annual demand of at least 53,650 thms or a minimum of 50 customers and in compliance with the aggregation provisions in the Rules Applicable to Distribution Service elects an NGS to provide natural gas commodity service. The gas supply for each aggregation must enter the Companys system at a city gate(s) used by the Company to serve the customers unless otherwise permitted by Columbia.

CHARACTER OF SERVICE

Service furnished pursuant to this rate schedure shall be considered firm service.

RATE

The customers under this rate schedule shall be subject to a monthly customer charge and a distribution charge.


The Distribution Charges include the applicable Purchase Gas Demand Cost rate. The distribution charge may be flexed in accordance with the Flexible Rate Provisions set forth in the Rules and Regulations of this Tariff.

In addition, if the customer transfers to this rate from rate RSS-Residential Sales Service, then for a period of twelve months, the rate shall be adjusted to include the amount per thm equal to the "E" Factor for the twelve months ended September 30 included in the then-applicable Purchased Gas Commodity Cost rate.


The minimum monthly charge shall be the Customer Charge.


The above distribution charges include recovery of purchased gas demand costs pursuant to the Purchased Gas Cost Rider as set forth in this Tariff.



USP COSTS AND CUSTOMER CHOICE COSTS

The distribution charges are subject to Rider Universal Service Plan and Rider Customer Choice as specified within Rider USP and Rider Customer Choice in this tariff.

DISTRiBUTION SYSTEM IMPROVEMENT CHARGE

(C)

Rate RDS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.


Issued: January 2, 2013 M. R. Kempic Effective: March 3,2013 President

Supplement No. 194 to Tariff Gas - Pa. P.U.C. No. 9 Eighth Revised Page No 82

Columbia Gas of Pennsylvania, Inc. Canceling Sixth Revised Page No. 82

RATE RDGSS - RESiDENTIAL DISTRIBUTED

GENERATION SALES SERVICE (Continued)


Where the Company incurs additional costs to establish service under this rate schedule, a minimum monthly charge may be determined individually for each customer served under this rate schedule and the amount shall be included in the customers service agreement. The service agreement will be for a term ol not less than three (3) years, unless mutually agreed to between the Company and the customer. The minimum charge will be based on the actual additional costs to the Company, if applicable, to serve a generation customer. The payment of such minimum charge does not relieve the customer from any minimum charge obligation applicable to service received by the customer under any of the Company's other rate schedules.



PURCHASED GAS COST RiDER

The distribution and commodity charges include recovery of purchased gas costs pursuant to the Purchased Gas Cost Rider of this tariff.

UNIVERSAL SERVICE PLAN AND CUSTOMER CHOICE COSTS

The distribution charge is subject to Rider USP costs and Rider CC costs as specified within Rider USP and Rider Customer Choice in this tariff.


Rate RDGSS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

TERMS OF PAYMENT

Bills for sales service will be rendered monthly and are due and payable upon presentation. All bills shall be paid on or before the final date of payment shown on the bill, which date shall be not less than twenty (20) days after presentation (date of postmark). If the customer fails to pay the full amount of any bill a delayed payment penalty charge of one and one-quarter percent (1 1/4%) per month will accrue on the portion of the bill that is unpaid on the due date.

(C)




Ninth Revised Page No. 85 Columbia Gas of Pennsylvania, Inc. Canceling Seventh Revised Page No. 85

RATE RDGDS - RESIDENTIAL DISTRIBUTEDGENERATION DISTRIBUTION SERVICE (Continued)


Where the Company incurs additional costs to establish service under this rate schedule, a minimum monthly charge may be determined individually for each customer served under this rate schedule and the amount shall be included in the customer's service agreement. The service agreement will be for a term of not less than three (3) years, unless mutually agreed to between the Company and the customer. The minimum charge will be based on the actual additional costs to the Company, if applicable, to serve a generation customer. The payment of such minimum charge does not relieve the customer from any minimum charge obligation applicable to service received by the customer under any of the Company's other rate schedules.

TERMS OF PAYMENT

Bills for distribution service will be rendered monthly and are due and payable upon presentation. All bills shall be paid on or before the final date of payment shown on the bill, which date shall not be less than twenty (20) days after presentation (date of postmark). If the customer fails to pay the full amount of any bill a delayed payment penalty charge of one and one-quarter percent (1 1/4%) per month will accrue on the portion of the bill that is unpaid on the due date.

SPECIAL PROVISIONS

1. If service under this rate schedule is discontinued at the request of the Customer, the Company shall be under no obligation to reconnect service to the same Customer on the same premises until the Customer pays the monthly customer charge for each month of the intervening period, but not to exceed twelve (12) months, and any amount due to the Company under a service agreement. Restoration of service will not be denied for the nonpayment of NGS charges.

2. Where a Customer has installed a gas light(s) in lighting devices approved by the Company, and the gas used by such light(s) is unmetered, the gas consumed by such light(s) shall be assumed to be twenty-one (21) thms per month when the Btu/hr input rating for such light(s) is 2700 or less. For each additional 1,350 Btulhr or fraction thereof, the assumed consumption shall be increased by eleven (11) thms per month. Such assumed consumption shall be billed under the rates contained herein, or if in combination with metered usage under this rate schedule, shall be added to the Customer's metered usage and the total billed under the rates contained herein.

UNIVERSAL SERVICE PLAN AND CUSTOMER CHOICE COSTS

The distribution charges are subject to Rider USP costs and Rider CC costs as specified within Rider USP and Rider Customer Choice in this tariff.



APPLICABLE SALES SERVICE RATE

Except as otherwise provided under the Rules Applicable to Distribution Service, a customer or its NGS under this Rate Schedule desiring to purchase gas or to replace under-deliveries of gas or over consumption of gas by the customer, to which the Rules Applicable to Distribution Service would otherwise be applicable, shall be charged the current month's average daily city gate rate, as published in Gas Daily, times 120%, plus applicable taxes and the delivery charge.


Rate RDGDS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

(C) indicates Change

(C)

Issued January 2, 2013 M. R. Kempic Effective: March 3, 2013 President


Seventh Revised Page No. 87 Columbia Gas of Pennsylvania, Inc. Canceling Fifth Revised Page No. 87

RATE SGSS - SMALL GENERAL SALES SERVICE (Continued)


The State Tax Adjustment Surcharge will be applied to the non-Purchased Gas Cost portion of the charges set forth in this rate schedule.


The distribution and natural gas supply charges for sales service include recovery of purchased gas costs pursuant to the Purchased Gas Cost Rider as set forth in this tariff.

CUSTOMER CHOICE COSTS

The distribution charge is subject to a Customer Choice charge pursuant to Rider CC.


(C)

Rate SGSS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

TERMS OF PAYMENT

Bills for distribution service will be rendered monthly and are due and payable upon presentation. All bills shall be paid on or before the final date of payment shown on the bill, which date shall be not less than fifteen (15) days after presentation (date of postmark).

If the customer fails to pay the full amount of any bill a delayed payment penalty charge of one and one-quarter percent (1 114%) per month will accrue on the portion of the bill that is unpaid on the due date.

CUSTOMER DEVELOPMENTIRETENTION PROVISIONS

1. An existing Customer currently receiving service under this rate schedule or a potential Customer eligible to receive service under this rate schedule is eligible to receive special development/retention rates, if the customer meets the following conditions:

a. The Customer agrees to enter into a three-year contract for service under this rate schedule.




Sixth Revised Page No. 90 Columbia Gas of Pennsylvania, Inc. Canceling Fourth Revised Page No. 90

RATE SGDS - SMALL GENERAL DISTRIBUTION SERVICE (Continued)

DETERMINATION OF MONTHLY CUSTOMER CHARGE

The Customer Charge will be determined based upon the Customer's actual throughput quantities, including sales and distribution, measured in therms (thms), for the most recent twelve-month period ended October 31. If a Customer does not have sufficient consumption history to determine its customer charge based on twelve months, the Customer Charge will be developed by annualizing the consumption history available. In the instance where a customer has no consumption history, the Company will request the Customer to submit estimated annual gas requirements, including sales and distribution, upon which to develop the Customer Charge. The Company in all cases retains the right to review and modify the Customer's estimate where necessary. A customer's Customer Charge will remain constant annually, subject to change January 1 of each year.

In all cases, the Company reserves the right to review the Customer Charge and, upon receipt of satisfactory proof, to adjust the Customer Charge to reflect the installation and use of energy efficient gas burning equipment, or the implementation of energy conservation practices or measures, which results in a measurable permanent change in the customer's requirement or consumption.


The minimum monthly charge shall be the sum of (a) the Customer Charge; plus (b) purchase gas demand charges, if any, under Rate SS. In the event of curtailment in the delivery of gas by the Company below the Maximum Daily Firm Requirement of the Customer, if any, under Rate 55, or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the Customer Charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.


The charges are subject to a State Tax Adjustment Surcharge as set forth in this tariff.


The distribution charges for Priority One Service include recovery of Purchased Gas Demand Costs pursuant to the Purchased Gas Cost Rider as set forth in this tariff.

ELECTIVE BALANCING SERVICE RIDER

Distribution service under this rate schedule shall be subject to the provisions of Rider EBS as set forth in this tariff.


The distribution charge is subject to a Customer Choice charge pursuant to Rider CC.


Rate SGDS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

APPLiCABLE SALES SERVICE RATE

Priority One customers desiring to purchase gas shall be charged an amount for recovery of purchased gas costs as set forth in the Rules Applicable to Distribution Service, plus the Priority One Service rate.


(C)




RATE SCD - SMALL COMMERCIAL DISTRIBUTION (Continued)


The distribution charges are subject to a Customer Choice charge pursuant to Rider CC.


Rate SCD is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.


The distribution charges include recovery of purchased gas demand costs pursuant to the Purchased Gas Cost Rider as set forth in this Tariff.

TERMS OF PAYMENT

Bills for distribution service will be rendered monthly and are due and payable upon presentation. All bills shall be paid on or before the final date of payment shown on the bill, which date shall not be less than fifteen (15) days after presentation (date of postmark).

If the customer fails to pay the full amount of any bill a delayed payment penalty charge of one and one-quarter percent (1 1/4%) per month will accrue on the portion of the bill that is unpaid on the due date.

SPECIAL PROVISIONS

1. If service under this rate schedule is discontinued at the request of the customer, the Company shall be under no obligation to reconnect service to the same customer on the same premises until the customer pays the monthly minimum charge for each month of the intervening period, but not to exceed twelve (12) months.

2. Where a customer has installed a gas light(s) in lighting devices approved by the Company, and thegas used by such light(s) is unrnetered, the gas consumed by such light(s) shall be assumed to be twenty-one (21) thms per month when the Btu/hr input rating for such light(s) is 2,700 or Less. For each additional 1.350 Btufhr or fraction thereof, the assumed consumption shall be increased by eleven (11) thms per month. Such assumed consumption shall be billed under the rates contained herein, or if in combination with metered usage under this rate schedule, shall be added to the customer's metered usage and the total billed under the rates contained herein.

3. The customer, at its option, may receive a separate bill from its NGS for services provided by the NGS. Otherwise, all charges for natural gas service to the customer will be billed by the Company. When the Company bills for the NGS, the Company will have the right to terminate service for failure to pay the NGS's Natural Gas Supply Services charges in compliance with all applicable laws and regulations regarding termination of service.

4. Before participating in Choice Service, customers with arrears, who are not already subject to a payment plan, shall be required to enter into a payment plan with the Company.

5. The Company will purchase at a discount the accounts receivable from NGSs who elect to have the Company bill the NGS's Natural Gas Supply Service charges.

6. Effective eighteen (18) months after the Public Utility Commission issues a final order in Docket No. P-2009-2099333, an NGS may choose the Company's consolidated billing option or issue its own bills for Gas Supply Service charges (Billing Option 1 or Billing Option 2 as described in the Rules Applicable Only to Choice Service) for all or a portion of its customers eligible for Rate SCD.


(C)

Issued: January 2, 2013 - M. R. Kempic Effective: March 3, 2013 President



RATE SDS - SMALL DISTRIBUTION SERVICE (Continued)

RATE

The customers under this rate schedule shall be subject to a monthly customer charge and a distribution charge.


The customer charge will be determined based upon the customer's actual throughput quantities, including sales and distribution, measured in therrns (thms), for the most recent twelve-month period ended October 31. If a customer does not have sufficient consumption history to determine its customer charge based on twelve months, the customer charge will be developed by annualizing the consumption history available. In the instance where a customer has no consumption history, the Company will request the customer to submit estimated annual gas requirements, including sales and distribution, upon which to develop the customer charge. The Company in all cases retains the right to review and modify the customer's estimate where necessary. A customer's customer charge will remain constant annually, subject to change January I of each year.

In all cases, the Company reserves the right to review the customer charge and, upon receipt of satisfactory proof, to adjust the customer charge to reflect the installation and use of energy efficient gas burning equipment, or the implementation of energy conservation practices or measures, which results in a measurable permanent change in the customer's requirement or consumption.

The above distribution rates may be flexed in accordance with the Flexible Rate Provisions set forth in the Rules and Regulations of this Tariff.


The minimum monthly charge shall be the sum of (a) the customer charge; plus (b) purchased gas demand charges, if any, under Rate SS. In the event of curtailment in the delivery of gas by the Company below the Maximum Daily Firm Requirement of the customer, if any, under Rate SS, or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the customer charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.


The above charges are subject to a State Tax Adjustment Surcharge as set forth in the tariff.

ELECTIVE BALANCING SERVICES RIDER

Distribution service under this rate schedule shall be subject to the provisions of Rider EBS as set forth within this tariff.


(C)

Rate SDS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.




Thirty-sixth Revised Page No. 101 Columbia Gas of Pennsylvania, Inc. Canceling Thirty-fourth Revised Page No. 101

RATE LGSS - LARGE GENERAL SALES SERVICE (Continued)


The minimum monthly charge shall be the customer charge, except that in the event of curtailment in the delivery of gas by the Company or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the Customer Charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.



PURCHASED GASCOST RIDER

The distribution and commodity charges include recovery of purchased gas costs pursuant to the Purchased Gas Cost Rider as set forth in this tariff.

DISTRI BUTION SYSTEM IMPROVEMENT CHARGE

(C)

Rate LGSS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

TERMS OF PAYMENT

Bills for sales service will be rendered monthly and are due and payable upon presentation. All bills shall be paid on or before the final date of payment shown on the bill, which date shall be not less than fifteen (15) days after presentation (date of postmark).

If the customer fails to pay the full amount of any bill, a delayed payment penalty charge of one and one-quarter percent (1 1/4%) per month will accrue on the portion of the bill that is unpaid on the due dale.



Supplement No. 194 to Tariff Gas - Pa. P.U.C. No. 9 Tenth Revised Page No. 105

Columbia Gas of Pennsylvania, Inc. Canceling Eighth Revised Page No. 105

RATE LDS - LARGE DISTRIBUTION SERVICE (Continued)


The minimum monthly charge shall be the sum of (a) the Customer Charge; plus (b) purchased gas demand charges, if any, under Rate SS. In the event of curtailment in the delivery of gas by the Company below the Maximum Daily Firm Requirement of the Customer, if any, under Rate SS, or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the Customer Charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.


The charges described in this rate schedule are subject to a State Tax Adjustment Surcharge as set forth in the tariff.

ELECTIVE BALANCING SERVICES RiDER



Rate LDS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

APPLICABLE SALES SERVICE RATE

Customers under this Rate Schedule desiring to purchase gas shall be charged an amount for recovery of purchased gas costs as set forth in the Rules Applicable to Distribution Service plus the non-gas portion of distribution rates contained in the first block of Rate SGS - Small General Service.

Provided, however, that sales service hereunder shall be considered imbalance gas as defined in the Consumption in Excess of Deliveries section in Paragraph 3 of the Rules Applicable to Distribution Service of this tariff. The Company undertakes no responsibility to obtain sufficient gas supplies to avoid interruption of sales service on a daily basis, and sales service is totally interruptible on any day when the Company gives notice to the customer that gas supply is inadequate to supply the customer's requirements, except to the extent the customer nominates Maximum Daily Firm Requirement under Rate SS.

The Company shall give the customer 2 hours advance notice of interruption. Customer agrees that Company shall not be liable for any loss or damage that may be sustained by the customer by reason of any interruption of service.

On any day when the Customer has been given notice by the Company to interrupt, any quantity of gas taken in excess of the quantity specified to be made available that day shall constitute unauthorized takes and shall be subject to the charges set forth in the Rules Applicable to Distribution Service. Payment of such penalty charge shall be in addition to the charges specified herein.

(C)


issued: January 2, 2013 M. R. Kempic Effective: March 3, 2013 President


Eighth Revised Page No. 108 Columbia Gas of Pennsylvania, Inc. Canceling Sixth Revised Page No. 108

RATE MLSS - MAIN LINE SALES SERVICE (Continued)


The customer charge will be determined based upon the customer's actual throughput quantities, including sales and distribution if the customer previously contracted for distribution service, measured in therms (thms), for the most recent twelve-month period ended October 31. If a customer does not have sufficient consumption history to determine its customer charge based on twelve months, the Customer Charge wiLl be developed by annualizing the consumption history available. In the instance where a customer has no consumption history, the Company will request the customer to submit estimated annual gas requirements, upon which to develop the Customer Charge. The Company in all cases retains the right to review and modify the customer's estimate where necessary. A customer's customer charge will remain constant annually, subject to change January 1 of each year.



The minimum monthly charge shall be the Customer Charge. In the event of curtailment in the delivery of gas by the Company or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the Customer Charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.



DISTRI BUTION SYSTEM IMPROVEMENT CHARGE

Rate MLSS is subject to a Distribution System Improvement Charge as specified within Rider DSIC of this tariff.

(C)


lssued January 2, 2013 M. R. Kempic Effective: March 3, 2013 President

Supplement No. 194 to Tariff Gas - Pa. P.U.C. No. 9 Tenth Revised Page No. 112

Columbia Gas of Pennsylvania, Inc. Canceling Eighth Revised Page No. 112

RATE MLDS - MAIN LINE DISTRIBUTION SERVICE (Continued)

RATE

The customers under this rate schedule shall be subject to a monthly customer charge, and a distribution charge.


The applicable distribution charge for all distribution quantities for MLDS Class II customers shall be determined based upon the Customer Charge group in which the Customer is placed, as established annually.

The distribution rates may be flexed in accordance with the Flexible Rate Provisions set forth in the Rules and Regulations of this Tariff.



ELECTIVE BALANCiNG SERVICES RIDER



Rate MLDS is subject to a Distribution System Improvement Charge as specified within Rider DS1C of this tariff.


The customer charge will be determined based upon the customer's actual throughput quantities, including sales and distribution, measured in therms (thms), for the most recent twelve-month period ended October 31. If a customer does not have sufficient consumption history to determine its customer charge based on twelve months, the customer charge will be developed by annualizing the consumption history available. In the instance where a customer has no consumption history, the Company will request the customer to submit estimated annual gas requirements, including sales and distribution, upon which to develop the customer charge. The Company in all cases retains the right to review and modify the customer's estimate where necessary. A customer's customer charge will remain constant annually, subject to change January 1 of each year.



The minimum monthly charge shall be the sum of (a) the Customer Charge; plus (b) purchased gas demand charges, if any, under Rate SS. In the event of curtailment in the delivery of gas by the Company below the Maximum Daily Firm Requirement of the Customer, if any, under Rate SS, or complete or partial suspension of operation by the customer due to strikes, fires, floods, explosions or other similar casualties, the Customer Charge shall be reduced in direct proportion to the ratio which the number of days of curtailed service or complete or partial suspension of operation bears to the number of days in the billing period.


(C)

Issued January 2, 2013 M. R. Kempic Effective: March 3, 2013 President


Columbia Gas of Pennsylvania, Inc. Original Page No. 177

RIDER DSIC - DISTRIBUTION SYSTEM IMPROVEMENT CHARGE (C)

In addition to the net charges provided for in this Tariff, a charge of 1.9% will apply consistent with the Commission Order dated at Docket No. P-2012-2338282 approving the DSIC.

GENERAL DESCRIPTION

Purpose

To recover the reasonable and prudent costs incurred to repair, improve, or replace eligible property which is completed and placed in service and recorded in the individual accounts, as noted below, between base rate cases and to provide the Utility with the resources to accelerate the replacement of aging infrastructure, to comply with evolving regulatory requirements and to develop and implement solutions to regional supply problems.

The costs of extending facilities to serve new customers are not recoverable through the DSIC.

Eligible Property

The DSIC-eligible property will consist of the following:

- Piping (account 376); - Couplings (account 376); - Gas services lines (account 380) and insulated and non-insulated fittings (account 378); - Valves (account 376); - Excess flow valves (account 376); - Risers (account 376); - Meter bars (account 382); - Meters (account 381); - Unreimbursed costs related to highway relocation projects where a natural gas distribution

company or city natural gas distribution operation must relocate its facilities; and - Other related capitalized costs.

Effective Date

The DSIC will become effective March 3, 2012.





RIDER DSIC - DISTRIBUTION SYSTEM IMPROVEMENT CHARGE (Continued) (C)

COMPUTATION OF THE DSIC

Calculation

The initial DSIC, effective March 3, 2013, shall be carculated to recover the fixed costs of eligible plant additions that have not previously been reflected in the rates or rate base and will have been placed in service b.etween November 1, 2012 and January 31, 2013. Thereafter, the DSIC will be updated on a quarterly basis to reflect eligible plant additions placed in service during the three-month periods ending one month prior to the effective date of each DSIC update. Thus, changes in the DSIC rate will occur as follows:

Effective Date of Change Date to which DSIC-Eliqible Plant Additions Reflected March November through January June February through April

September May through July December August through October

Determination of Fixed Costs

The fixed costs of eligible distribution system improvements projects will consist of depreciation and pre-tax return, calculated as follows:

1. Depreciation: The depreciation expense shall be calculated by applying the annual accrual rates employed in the Utility's most recent base rate case for the plant accounts in which each retirement unit of DSIC-eligibte property is recorded to the original cost of DSIC-eligible property.

2. Pre-tax return: The pre-tax return shall be calculated using the statutory state and federal income tax rates, the Utility's actual capital structure and actual cost rates for long-term debt and preferred stock as of the last day for the three-month period ending one month prior to the effective date of the DS1C and subsequent updates. The cost of equity will be the equity return rate approved in the last fully litigated base rate proceeding for which a final order was entered not more than two years prior to the effective date of the DS1C. If more than two years shall have elapsed between the entry of such a final order and the effective date of the DSIC, then the equity return rate used in the calculation will be the equity return rate calculated by the Commission in the most recent Quarterly Report on the Earnings of Jurisdictional Utilities released by the Corn mission.





RIDER DSIC - DISTRIBUTION SYSTEM IMPROVEMENT CHARGE (Continued) (C)

COMPUTATION OF THE DSIC - continued

Application of DSIC

The DSIC will be expressed as a percentage carried to two decimal places and will be applied to the total amount billed to each customer for distribution service under the otherwise applicable rates and charges, excluding amounts billed for the State Tax Adjustment Surcharge (STAS). To calculate the DSIC, one-fourth of the annual fixed costs associated with all property eligible for cost recovery under the DSIC will be divided by the projected revenue for distribution service (including all applicable clauses and riders) for the quarterly period during which the charge wHI be collected, exclusive of the STAS.

Formula:

The formula for calculation of the DSIC is as follows:

DSIC = (DSl * PTRR)+DeD+e PQR

Where:

DSI = Original cost of eligible distribution system improvement projects net of accrued depreciation.

PTRR = Pre-tax return rate applicable to DSIC-eligible property. Dep = Depreciation expense related to DSIC-eligible property. e = Amount calculated under the annual reconciliation feature or Commission audit,

as described below. POR = Projected quarterly revenues for distribution service (including all applicable

clauses and riders) from existing customers plus netted revenue from any customers which will be gained or lost by the beginning of the applicable service period.

Revenues will be determined as one-fourth (1/4) of projected annual revenues.

QUARTERLY UPDATES

Supporting data for each quarterly update will be filed with the Commission and served upon the Commission's Bureau of Investigation and Enforcement, the Office of Consumer Advocate, and the Office of Small Business Advocate at least ten (10) days prior to the effective date of the update.


Issued: January 2, 2013 M. R. Kempic Effective: March 3 2013 President



RIDER DSIC - DiSTRIBUTiON SYSTEM IMPROVEMENT CHARGE (Continued) (C)

CUSTOMER SAFEGUARDS

1. Cap: The DSIC is capped at 5.0% of the amount billed to customers for distribution service (including alL applicable clauses and riders) as determined on an annualized basis.

2. Audit/Reconciliation: The DSIC is subject to audit at intervals determined by the Commission. Any cost determined by the Commission not to comply with any provision of 66 Pa C.S. §§ 1350, et seq., shall be credited to customer accounts. The DSIC is subject to annual reconciliation based on a reconciliation period consisting of the twelve months ending December 31 of each year. The revenue received under the DSIC for the reconciliation period will be compared to the Company's eligible costs for that period. The difference between revenue and costs will be recouped or refunded, as appropriate, in accordance with Section 1307(e), over a one-year period commencing on April 1 of each year. If DSIC revenues exceed DSIC-eligible costs, such over-collections will be refunded with interest. Interest on over-collections and credits will be calculated at the residential mortgage lending specified by the Secretary of Banking in accordance with the Loan Interest and Protection Law (41 P.S. §§ 101, et seq.) and will be refunded in the same manner as an over-collection.

3. New Base Rates: The DSIC will be reset at zero upon application of new base rates to customer billings that provide for prospective recovery of the annual costs that had previously been recovered under the DS1C. Thereafter, only the fixed costs of new eligible plant additions that have not previously been reflected in the Utility's rates or rate base will be reflected in the quarterly updates of the DSIC.

4. Customer Notice: Customers shall be notified of changes in the DSIC by including appropriate information on the first bill they receive following any change. An explanatory bill insert shall also be included with the first billing.

5. All customer classes: The DSIC shall be applied equally to all customer classes, except that the Company may reduce or eliminate the Rider DSIC to any customer with competitive alternatives or potential competitive alternatives and customers having negotiated contracts with the Company, if it is reasonably necessary to do so.

6. Earning Reports: The DSIC will also be reset at zero if, in any quarter, data filed with the Commission in the Utility's then most recent Annual or Quarterly Earnings reports show that the Utility would earn a rate of return that would exceed the allowable rate of return used to calculate its fixed costs under the DSIC as described in the pre-tax return section.



COLUMBIA STATEMENT NO. 1

BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION

Pennsylvania Public Utility Commission

vs. Docket No. P-2012- 2338282

Columbia Gas of Pnnsy1vania, Inc.

DIRECT TESTIMONY OF NANCYJ. D. KRAJOVIC

ON BEHALF OF COLUMBIA GAS OF PENNSYLVANIA, INC.

January 2, 2013

NancyJ. D. Krajovic Statement No. 6

Page 1 of 14

1 Q. Please state your name and business address.

2 A. Nancy J. D. Krajovic, 121 Champion Way, Canonsburg, PA 15317

3 Q. By whom are you employed and in what capacity?

4 A. I am employed by Columbia Gas of Pennsylvania, Inc. ("Columbia" or the

5 "Company") as Director of Rates and Regulatory Affairs.

6 Q. What are your responsibilities as Director of Rates and Regulatory Affairs?

7 A. I am responsible for developing and directing rate activity on behalf of the

8 Company before the Pennsylvania Public Utility Commission ("Commission") as

9 well as coordinating and representing the Company's position in a variety of

10 regulatoiy matters and proceedings.

11 Q. What is your educational and professional background?

12 A. I hold a Bachelors of Science Degree in Accounting from Duquesne University and

13 a Master of Business Administration from the University of Pittsburgh's Katz

14 Graduate School of Business. I was employed by the Pennsylvania Public Utility

15 Commission from 1984 through 1987 as an auditor. From 1988 through 2007, I

16 held various regulatory positions at Duquesne Light Company including Regulatory

17 Analyst, Rate Design Coordinator, Project Manager, Director of Regulatory Affairs

18 and Manager of Regulatory Affairs. In those positions I acted as the primary

19 interface with the Commission in the conduct of financial and management audits

20 of Duquesne Light. Additionally, I was responsible for the interpretation and

21 administration of Duquesne's retail and supplier tariffs. In 2007, 1 assumed the

Nancy J. D. Krajovic Statement No. 6

Page 2 of 14

1 role of Manager, Commercial and Industrial Customers for Duquesne Light and

2 held that position until May, 2009. In November of 2009, I joined Columbia Gas

3 of Pennsylvania as Senior Regulatory Analyst and was promoted to my current

4 position in June of 2011.

5 Q. Have you previously testified before this Commission?

6 A. Yes, I submitted written testimony before the Commission on Duquesne's behalf at

7 the following dockets: 1-900005, M-00930404Cool, R-000l6854Co01, M-

8 FACE0302, R-00061346 and P-00072247. I also presented oral testimony in

9 several formal customer complaint actions and at en bane hearings sponsored by

10 the Commission on energy conservation issues. At Columbia Gas of Pennsylvania I

11 have submitted written testimony before the Commission at the following dockets:

12 R-2011-2215623, R-2012-2293303 and C-2011-224837o/A-2011-227678o and R-

13 2012-2321748.

14 Q. What is the purpose of your testimony?

15 A. My testimony will describe the Distribution System Improvement Charge ("DSIC")

16 tariff and supporting documentation that the Company has filed for the

17 Commission's approval. I will discuss Columbia's Long Term Infrastructure

18 Improvement Plan ("LTIIP"). I will also explain how the Company seeks to utilize

19 all of the tools provided by Act i1 to recover the ongoing costs of its accelerated

20 infrastructure replacement program initiated in 2007.

21 Q. Why has Columbia filed for a DSIC?


Page 3 of 14

1 A. Columbia has long supported the need for a recovery mechanism that would

2 address regulatory lag. In the face of Columbia's decades-long priority pipe

3 replacement program and an environment where it competes for capital, a

4 mechanism granting timely recovery is critical to ensuring that such a significant

5 replacement program is implemented in the most expeditious and cost-effective

6 manner. While infrastructure replacement will result in rate increases for

7 Columbia's customers, the availability of the DSIC will enable the Company to

8 attract lower cost capital. Columbia is most appreciative of the collaborative effort

9 among the utilities and the Commission and lawmakers for moving HB 1294

10 through to the passage of Act ii. This filing seeks to use the DSIC as specified in

11 Act 11 to support the accelerated infrastructure program that the Company began

12 over five years ago.

13 Q. Please describe the filing that Columbia has submitted in this proceeding.

14 A. Columbia has submitted Supplement No. 194 to Tariff Gas Pa. P.U.C. No. 9

15 ("Supplement No. 194") to introduce a DSIC into its tariff. Supplement No. 194 is

16 issued January 2, 2013, to be effective March 3, 2013. The language included in

17 Supplement No. 194 closely reflects the language of the proposed model tariff

18 included in the Commission's August 2, 2012 Final Implementation Order at M-

19 2012-2293611.

20 Q. Does Columbia propose any differences in its filing from the proposed model

21 tariff?


Page 4 of 14

A. Consistent with the Final Implementation Order, a provision has been added that

specifies that the DSIC will not be applied to any customer with competitive

alternatives or negotiated contracts.

Q. Is there anything else about the tariff that you would like to specifically describe?

A. Yes. Columbia is filing for a DISC at the earliest time permitted by Act ii.

Because tariff supplements are filed on sixty days' notice, the soonest that the

DSIC could become effective is March 3, 2013, As such, the applicable calendar

quarters that Columbia's initial DSIC will be effective will be March - May, June

- August, September - November and December - February.

Q. How will Columbia's DSIC be calculated?

A. Consistent with the model tariff proposed by the Commission, the formula for

Columbia's DSIC is:

DSIC = (DSI * PTRR)+Dep+e PQR

Where:

DSI Original cost of eligible distribution system improvement projects net of accrued depreciation.

PTRR Pre-tax return rate applicable to DSIC-eligible property. Dep = Depreciation expense related to DSIC-eligible property. e = Amount calculated under the annual reconciliation feature or

Commission audit, as described below. PQR = Projected quarterly revenues (based on one-fourth of

projected annual revenues) for distribution service (including all applicable clauses and riders) from existing customers plus netted revenue from any customers which will be gained or lost by the beginning of the applicable service period.

I

2

3

4

5

6

7

8

9

10

11

12

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29


Page 5 of 14

Q. Can Columbia currently calculate the DSIC rate to be effective March 31, 2013 if

2 Supplement No. 194 is approved as filed by the Commission?

3 A. No. By statute, the DSIC will commence recovery of eligible property placed into

4 service during the three-month period ending thirty days prior to the effective

5 date of the DSIC. For a DSIC effective March 3, 2013, that three-month period is

6 November 2012 through January 31, 2013. Currently, the only actual data for

7 that period is the eligible property placed into service in November 2012.

8 Q. Has Columbia made an estimate of the March 3, 2013 DSTC rate?

9 A. Yes. Exhibit NJDK-1 is a representation of what Columbia proposes to file on a

10 quarterly basis ten days prior to the effective date of the quarterly updates. In it,

11 Columbia has included actual data for November 2012 and projected data for

12 December 2012 and January 2013 in regard to eligible property placed into

13 service. The estimated DSIC for March 3, 2013 is 1.90%.

14 Q. What capital structure and debt rates were used in the estimate?

15 A. The estimate is based on the Company's current capital structure and actual cost

16 rates for long-term debt and preferred stock as of November 30, 2012. Those

17 rates will be updated to reflect the capital structure and cost rates as of January

18 31, 2013 when the filed-for DSIC is submitted on February 19, 2013.

19 Q. What cost of equity is used in the calculation of the estimated DSIC?

20 A. The Commission has not yet published a rate of return on equity ("ROE") to be

21 used by gas utilities for purposes of a DSIC in the absence of a ROE from a fully

NancyJ. U. Krajovic Statement No. 6

Page 6 of 14

1 litigated base rate proceeding within the last two years. In addition, Columbia's

2 last base rate case was settled without a specified ROE. Therefore, for purposes

3 of this estimate, Columbia has used an ROE of 10.4%, which is the ROE granted

4 by the Commission in its order entered December 28, 2012 in PPL Electric

5 Utilities Corporation's fully-litigated base rate proceeding at Docket No. R-2012-

6 2290597. This rate is highly consistent with the DSIC ROE of 10.46% proposed

7 by the Utility Sub-Group in the Commission's Act ii ROE Working Group. It is

8 the position of that sub-group that the DSIC ROE should be reflective of the

9 ROE's approved in base rate proceedings since the purpose of the DSIC is to

10 encourage investment in rate base property. When the Commission publishes an

11 ROE to be used for DSIC purposes, Columbia's compliance filing will reflect the

12 allowed ROE.

13 Q. On what basis will Columbia be projecting its quarterly revenues?

14 A. A significant portion of Columbia's load is driven by heating service. Given that

15 Columbia's current rate design is largely volumetric, its revenue stream is largely

16 seasonal. In order to apply the DSIC in a fashion that more closely reflects the

17 fixed nature of the investment that the DSIC will be recovering and to make the

18 DSIC administratively simpler to apply, Columbia will be basing its projected

19 quarterly revenues on one-fourth of its projected annual distribution revenues.

20 Q. How will Columbia notify its customers of the quarterly updates to the DSIC?


Page 7 of 14

1 A. As directed by the Commission's August 2, 2012 Implementation Order and

2 model tariff, the Company will include bill messages following any quarterly

3 changes in the DSIC.

4 Q. Has Columbia notified its customers of this filing?

5 A. Yes. Beginning with hills issued on the date of this filing and continuing for a full

6 billing cycle, Columbia is including a bill insert to all customers informing them

7 of the filing, the estimated impact of a DSIC on their bills and their rights to

8 intervene in the proceeding. The language on the insert was circulated to, and

9 reflects comments provided by, the Commission's Communications Office,

10 Bureau of Consumer Services and the Office of Consumer Advocate.

11 Q. Has Columbia included any customer safeguards in its DSIC?

12 A. The amounts billed to customers via the DSIC are capped at 5% of annualized

13 distribution revenues. Additionally, the DSIC is subject to audit by the

14 Commission and annual reconciliation of recoveries and costs, with

15 overcollections subject to refund with interest. The DSIC will be reset to zero

16 upon application of new base rates that will prospectively recover costs that had

17 previously been recovered through the DSIC. It will also be reset to zero in any

18 quarter that Columbia would earn a rate of return in excess of that authorized to

19 calculate the fixed costs under the DSIC. All of these customer safeguards comply

20 with the requirements of Act 11 and the Commission's model DSIC tariff.

21 Q. Did Columbia file a Long Term Infrastructure Improvement Plan ("LTIIP")?


Page 8 of 14

1 A. Yes. Section 1352 of 66 Pa. C.S. requires that in order to qualify for DSIC

2 recovery, a utility must file a LTIIP for Commission approval. Columbia's filed its

3 LTIIP with the Commission on December 7, 2012 at P-2012-2338282.

4 Q. Has the Commission taken action on that filing?

5 A. No, not at this time.

6 Q. Please describe the contents of Columbia's LTIIP.

7 A. Columbia's filing included the six specific elements listed in the statute: 1) types

8 and age of eligible property; 2) schedule for its planned repair and replacement; 3)

9 location of the eligible property; 4) reasonable estimate of the quantity of property

10 to be improved; 5) projected annual expenditures and measures to ensure that plan

11 is cost effective; and 6) manner in which replacement of aging infrastructure will be

12 accelerated and how repair, improvement or replacement will maintain safe and

13 reliable service. In addition, Columbia's LTIIP includes a description of the

14 Company's workforce management and training plan designed to ensure that the

15 utility will have access to a qualified workforce to perform the work in a cost-

16 effective, safe and reliable manner, as required by the Commission's Final

17 Implementation Order referenced earlier. The filing also described the history of

18 Columbia's accelerated pipeline replacement program, increased leak repair efforts,

19 quantities of priority pipe already retired and improvements in O&M metrics

20 already achieved. A copy of Columbia's LTIIP is included as Exhibit NJDK-2 to my

21 testimony.


Page 9 of 14

I Q. Are there any specific items of property in the DSIC you would like to explain?

2 A. Yes. I would like to explain Columbia's claim for investment in customer-owned

3 gas service lines. In the western portion of Columbia's system, by virtue of 66 Pa.

4 C.S. § 1510 and Columbia's tariff, customers own their service lines from the curb

5 line or curb box to the meter. In many instances, these services are constructed of

6 bare steel or otherwise may be inadequate to connect to Columbia's main

7 replacements. The bare steel customer-owned service lines have been subject to

8 the same elements that affect the physical integrity of the Company-owned mains

9 that are being replaced across Columbia's system. While these service lines are

10 owned by the customer, for safety reasons it is just as necessary to upgrade them as

11 it is to upgrade the bare steel and cast iron mains. Columbia could not continue to

12 provide service to these customers without replacing the customer service lines,

13 because the lines are incapable of handling the new system pressures and are not

14 up to current code requirements. Replacing these lines is an integral part of the

15 Company's strategy for improving the quality of its distribution system.

16 Q. Why is Columbia's replacement of these customer-owned service lines an integral

17 part of its main replacement program?

18 A. When Columbia began its accelerated mains replacement program in 2007, the

19 Company recognized that in order to maintain the speed and efficiency of its

20 replacement strategy, it would need to undertake the replacement of customer-

21 owned service lines on its own. The Company concluded that if it had to rely on


Page 10 of 14

I individual customers to arrange for the replacement of customer owned lines to be

2 connected to replacement mains, it would delay or alter Columbia's replacement

3 schedule. Customers may not have the necessary resources at the time the

4 Company intends to replace the main that provides them with service, or may be

5 unable to get the necessary equipment and qualified labor in a timely fashion. As a

6 result, customers could be without service for an extended period of time, and the

7 Company could not efficiently replace mains if it had to wait to connect new

8 services to the main. Columbia is certainly capable of making these replacements

9 in a more efficient and less costly manner, since it will already have the personnel

10 and equipment near the customers' properties. Further, utilizing Columbia's

11 resources allows the Company to make the replacements exactly when they are

12 most convenient, and does not inhibit its replacement schedule. The investment in

13 customer-owned service lines is directly and solely driven by Columbia's

14 accelerated infrastructure replacement program.

15 Q. Has the Commission made any determinations related to Columbia's replacement

16 of customer-owned service lines?

17 A. Yes, it has. In "Petition of Columbia Gas of Pennsylvania, Inc. for Limited

18 Waivers of Certain Tariff Rules Related to Customer Service Line Replacement",

19 Docket No. P-00072337 (Order entered May 19, 2008) ("Petition"), Columbia

20 specifically requested that the Commission allow the Company to waive certain

21 tariff rules regarding customer responsibility to replace customer-owned service


Page 11 0114

I lines. In its Petition, Columbia requested that the Commission allow it to replace

2 all customer-owned service lines at the Company's cost where doing so is

3 necessitated by Columbia's main replacement and upgrade program. Columbia

4 noted that it would capitalize to the mains account the costs incurred in replacing

5 the customer-owned service lines. The Commission approved Columbia's Petition

6 without objection on May 19, 2008. In every rate case since that time, the cost of

7 replacement of customer-owned service lines has been included in the mains

8 account without objection. Columbia's inclusion of customer-owned service lines

9 as part: of the DSIC is, therefore, a logical continuation of the Commission's

10 determination in Columbia's prior cases.

11 Q. Why is it appropriate to include this investment in the DSIC?

12 A. As noted above, for accounting and ratemaking purposes, Columbia books the cost

13 of these customer-owned service line replacements to the Company's mains

14 account. This is no different from how Columbia would book the cost of other

15 customer-owned property, such as driveways, that are replaced as part of a main

16 replacement project. Furthermore, as explained above, these replacements are

17 necessary to an efficient mains replacement program. Thus, Columbia believes that

18 customer-owned service lines, which are already booked in the mains account, are

19 appropriate for inclusion in the DSIC as either cgas service lines" under

20 §1351(2)(iii) of the Act or "other related capital costs" under §1351(2)(x) of the Act.

21 Q. Has Columbia filed a base rate case within the five years prior to this filing?


Page 12 of 14

1 A. Yes. Included as part of our DSIC filing as Exhibit NJDK-3 is a certification that

2 prior to this filing, Columbia filed a base rate case under which its current base

3 rates were established on January 14, 2011 at Docket No. R-2010-2215623.

4 Q. Will the DSIC facilitate Columbia's compliance with Section 1501 of the Public

5 Utility Code and other state and federal laws or orders related to the provision and

6 maintenance of adequate, efficient, safe, reliable and reasonable service?

7 A. Yes. As described in detail in the LTHP included as Exhibit NJDK-3, Columbia

8 determined that the most effective means to mitigate the risks associated with

9 leakage from corrosion and cracks is to accelerate the replacement of aging

10 infrastructure. Columbia now routinely exceeds required leak surveys and has used

11 the information from those surveys to dramatically reduce the number of open

12 Class 2 leaks as well as to aid in the prioritizatiori of the pipe segments to be

13 replaced. Through the removal of deteriorating portions of its system and

14 replacement with new, longer lasting and safer materials, the Company is ensuring

15 the deliverability of service at the system's Maximum Allowable Operating

16 Pressure. Utilization of the DSIC facilitates Columbia's ability to carry out its

17 infrastructure replacement program in a cost-effective and accelerated manner. As

18 evidenced by the statistics provided in the LTIIP, Columbia accelerated its

19 replacement activity in 2007. Following the passage of Act ii, investment increased

20 to greater levels. Projected capital spending over the next five years for the


Page 13 of 14

I replacement of aging infrastructure continues at levels that greatly exceed historic

2 investment.

3 Q. Is adoption of the DSIC in the public interest?

4 A. Yes. For reasons explained above and in the LTIIP, the DSIC will enable Columbia

S to continue its accelerated facilities replacement program, which will enhance the

6 safety and reliability of Columbia's system, to the benefit of Columbia's customers

7 and the public.

8 Q. Does Columbia currently have a base rate proceeding before the Commission?

9 A. Yes. Columbia filed a for a general rate increase on September 28, 2012 at R-2012-

10 2321748.

11 Q. Does the case that Columbia filed utilize any provisions of Act ii?

Yes. Columbia filed its requested rate increase based upon a fully projected future

test year ending June 30, 2014, as permitted by new language at 66 Pa. C. S. § 315.

How will the order issued in that proceeding impact Columbia's DSIC?

The DSIC will be reset to zero upon the application of the new rates.

When could Columbia next apply for a DSIC?

Under Act 11, the DSIC may only include plant not previously reflected in rate base.

Therefore, if Columbia's rate base plant additions claimed in the case currently

before the Commission are adopted, Columbia would be able to file for a DSIC for

eligible investment made after June 2014. Therefore, the next DSIC would likely be

implemented no sooner than the fourth quarter of 2014.

12 A.

13

14 Q.

15 A.

16 Q.

17 A.

18

19

20

21


Page 14 of 14

Q. Does this complete your testimony?

A. Yes, it does.

Exhibit NJDK-1

Exhibit NJDK-1 Page 1 of 4

Columbia Gas of Pennsylvania

Proposed Distribution Service Improvement Charge (DSIC)

To be Effective March 3, 2013

Surcharge Calculation

Description Surcharge Effective

March 3 2013

1 Additions 29109

2 Less: Depreciation 112

22997 3 Applicable Additions

4 Annual Revenue Requirement Rate 12.05%

5 Qiarterly Revenue Requirement Rate (In 4 / 4) PTRR 3.01%

6 Quarterly Capital Cost Recovery (In 3 * Ln 5) DSI X PTRR 874

7 Quarterly Depreciation Expense (Ln 2) 150

8 Quarterly Base Revenue to Be Collected PQR 53896

9 Distribution System Improvement Charge ((Ln 6 + In 7) /Ln 8) DSIC 1.90%

Capital Structure as of November 30, 2012

Weighted Average Revenue

Type Amount Capital Structure Cost Rate Cost Rate Requirement

Debt - Long term * 378390 47.34% 5.80% 275% 2.75%

Debt - Shortterm 2,577 032% 1.29% 000% 0.00%

Equity 418406 52.34% 10.40% 5.44% 9.30%

799,373 100% 8.19% 12.05% Total Capital

Anticipated Base Revenues ($000s)

Annual Revenues 215,582

Quarterly Revenue 53,896

Exhibft F'LJDK-1 Page 2 of 4




Additions Projected Projected

Description Plant Account November-12 December-12 January-13 Total

Mains 37600 11,892,444 4,242,000 5,208,000 21,342,444

Mains CSL Replacements 37608 88,778 469,000 345,000 902,778

Services 38000 1,980,975 2,000,000 1,658,000 5,638,975

Meters 38100 306,498 69,000 45,000 420,498

Auto Meter Reading Devices 38110 368,017 65,000 101,000 534,017

Meter Installations 38200 36,289 130,000 55,000 221,289

House Regulators 1 38300 1 2,552 26,000 20,000 1 48,552

1 Total Additionsl 14,675,553 7,001,000 7,432,000 1 29,108,553

Retirements

Depreciation Expense

Projected Projected

Description Plant Account Novem bet-I 2 December-I 2 January-I 3 Total

Mains 37600 52,624 18,771 23,045 94,440

Mains CSL Replacements 37608 393 2,075 1,527 3,995

Services 38000 13,173 13,300 11,026 37,499

Meters 38100 1,701 383 250 2,334

Auto Meter Reading Devices 38110 6,790 1,199 1,863 9,853

Meter Installations 38200 178 637 270 1,084

House Regulators 1 38300 1 19 190 146 1 354

Total Depreciation 1 74,878 36,555 38,126 1 149,559

Exhibit NJDK-1 Page 3 of4




Embedded Cost of LongTerm Debt

November 30, 2012

Amount of Note

Date of Issuance

Date of Maturity Interest Rates Debt Service Requirement Rate

$47,350,000

$18,525,000

$54,515,000

$20,000,000

$58,000,000

$22,000,000

$28,000,000

$30,000,000

$35,000,000

$65,000,000

November 28, 2005

November 28, 2005

November 28, 2005

November 1, 2006

December 14, 2007

December 18, 2008

December 16, 2010

March 28, 2012

March 28, 2012

November 28, 2012

November 28, 2015

November 28, 2016

November 28, 2025

November 1, 2021

December 14, 2027

December 18, 2013

December 16, 2030

March 26, 2032

March 26, 2042

November 28, 2042

5.41%

5.45%

5.92%

6.015%

6.865%

5.460%

6.020%

5.355%

5.890%

5.26%

2,561,635

1,009,613

3,227,288

1,203,000

3,981,700

1,201,200

1,685,600

1,606,500

2,061,500

3,419,000

$378,390,000 21,957,036 5.80%

Exhibit NJDK-1 Page 4 of 4




Base Revenue By Rate Class

For the 12 Months Ending February 28, 2014

Customer 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014

Class March April May June July August September October November December January February Total*

Reshdential 19,113609 14,521,846 9,607,477 7,279920 7372,080 7,321,318 7255,153 3,132,003 11,434,420 16,466,274 22,025,625 21,568,547 152,797976

Commercial 6,255,982 4,952,764 2,688,374 2,088,616 1,799,243 1,709,256 1,737,837 2,249,478 3,433,628 5,357682 7,433,979 7,434,559 46,896,397

lrichjstrial 1.430,441 1,337,942 1,240,959 1,228,721 1,215,543 1,259,123 1,273404 1,314,953 1,309,195 1355,316 1,441,270 1,430,831 15,887,695

26,800,032 20,412,552 13,536,810 11,197,257 10,386,863 10,289,397 10,366,399 11,696,433 16,227,243 23,179,272 30,955,274 30,533,932 215,522,069

quarterly Revenues 53,895,517

* Represents annual revenues consistent with those filed in Columbia Gas of Pennsylvania's most recent base rate case, Case 2012-232-1748.

Exhibit NJDK-2

Columbia Gas of Pennsylvania, Inc.

Long-Term Infrastructure Improvement Plan

(2013-2017)

Columbia Gas of Pennsylvania, Inc. ("Columbia" or "the Company) submits its Long

Term Infrastructure Improvement Plan ("LTllP") in compliance with the requirements of

66 Pa. C.S. § 1352(a) and the Pennsylvania Public Utility Commission's ("Commission") Final

Implementation Order in Docket M-2012-2293611 (August 2, 2011). This LTIIP is being

submitted in order to qualify the investment in that infrastructure for Distribution System

Improvement Charge ("DSIC") recovery under 66 Pa. C.S. §1350 et seq, referred herein as the

"Act" or the "DSIC Statute".

After the following brief introduction which provides background information on the

Company and the history of its distribution system, the Company provides information

responsive to the seven issues that the Commission directed to be included in the LT1IP in its

Final Implementation Order.

Background

Columbia was incorporated in 1962. Prior to that time, Columbia's distribution

operations in Pennsylvania had been operated as part of the Columbia Gas System's Pittsburgh

operating group, whose principal operating company was Manufacturers Light & Heat

Company. Manufacturers Light & Heat Company was comprised of many companies which

were combined and consolidated over many years, starting with the 1885 chartering of

Manufacturers Natural Gas Company. In 1966, Columbia acquired the properties of the Central

Pennsylvania Gas Company, serving the area in and around State College. ln 1969, Columbia

acquired the York County Gas Company, which had originally been chartered in 1849.

Currently, Columbia serves approximately 415,000 residential, commercial, and industrial

customers in portions of 26 Counties throughout its greater York and Western Pennsylvania

service territories. Columbia provides that service through approximately 7,350 miles of mains

arid 400,000 services that it owns, operates, and maintains. (Please note that in compliance

with Pennsylvania statutory law, in Western Pennsylvania the Company does not own the

service lines all the way to the building, but terminates its ownership at the curb valve, typically

found at or near the property line. If there is no curb valve on the service line, the Company

terminates its ownership at the property line itself. For these customer-owned services, the

customer then installs and maintains the remainder of the service line to the building.) These

facilities (as of January 1, 2012 and as stated in Columbia's DOT Annual Report) include

approximately 1,751 miles of unprotected bare steel mains, 46 miles of cast iron mains, 113

miles of wrought iron mains and 66,781 bare steel services 1 . The balance of the system is

comprised of coated cathodically protected steel, or plastic (polyethylene) mains and services

and 81 miles classified as "other." Columbia's distribution infrastructure constitutes the final

step in the delivery of natural gas to customers from the producing regions of the Southern

United States, Western Canada, and in-state, Penn sylvan ia-prod u ced supplies.

1) Types and age of eligible property

Mains

Columbia's system comprises many different types of pipe, fittings and appurtenances.

From the 1850s to the early 1900s, Columbia's predecessor companies installed cast iron

pipe throughout the early distribution systems. Cast iron, wrought iron and wood were among

the first materials available, and cast iron had the advantage in that it was relatively strong and

was easy to install. However, it was vulnerable to breakage from ground movement.

I This number does not fake into account customer-owned services. Because Columbia does not own and did not originally install customer-owned services, Columbia does not have certain records by pipe material.

When the pipe was buried to typical depths of between two and five feet, if the soil beneath

the pipe or to its side was disturbed and pressure exerted on the pipe, it could crack.

Further, each pipe section was not easily joined, so joints were prone to leaks. Finally, it was

determined that cast iron pipe was unsuitable for long- distance transportation of gas because it

was unable to withstand high pressures.

By the early 1900s, the industry had adopted steel and wrought iron piping for mains.

These were deemed to be stronger than cast iron and able to withstand greater pressure.

During this time, bare steel and wrought iron began replacing cast iron pipe as the

material of choice when building a natural gas distribution system. During the pre- and

post-World War II construction boom, gas utilities like Columbia, along with developers and

customers, installed a significant amount of bare steel mains and services. Bare steel is steel

pipe that has no exterior coating and has no cathodic protection installed on the pipe. The

use of bare steel and wrought iron was common until the 1950s and 1960s when the industry

began to realize that, despite its strength, bare steel was subject to corrosion, and, in order to

increase long-term safety and reliability, coating and cathodic protection should be applied to

all new piping systems. Both exterior coatings and cathodic protection were designed to

inhibit corrosion. Columbia installed its last bare steel pipe in the 1960s. By 1970, the federal

government prohibited the use of bare steel for natural gas distribution system infrastructure.

All metals corrode as a result of the natural process of chemical Interactions with their

physical environment, most commonly caused by moist soil (which creates an electrolyte)

around the pipe causing corrosion. What occurs in these circumstances is that direct electric

current flows from the metal surface into the electrolyte, and as the metal ions leave the

surface of the pipe, corrosion takes place. This current flows in the electrolyte to the site

where oxygen or water is being reduced. This site is referred to as the cathode or cathodic

site. In order to combat corrosion, LDCs began using coated steel. Unprotected coated steel

3

("UPCS" or "coated steel") refers to steel pipe with an exterior coating (intended to electrically

isolate the steel from the surrounding electrolytes in the soil).

Despite the best efforts of industry, and even though it was for a time an accepted

industry standard, unprotected coated steel corroded as well. But from the 1940s through the

1960s, as the industry assessed its options, it was one of just a few alternative piping materials

available to meet the public demand for service. By 1970, Columbia had laid its last non-

cathodically protected coated steel segment. Further, since that time Columbia has retrofitted

all of its unprotected coated steel facilities with cathodic protection systems.

During the late 1960s and early 1970s, one of the first generation plastic pipes to be

installed was Aldyl-A. Despite its classification as a medium density polyethylene material,

operating history has demonstrated that Aldyl-A is more vulnerable to stress propagation

cracking than the contemporary medium density 418 polyethylene commonly installed today.

Therefore, in the course of executing Columbia's current age and condition replacement

projects, some of these Aldyl-A facilities are being retired or replaced contemporaneously with

the Bare Steel and Cast Iron to which these facilities are adjacent. Columbia best estimate is

that there is approximately 735 miles of Aldyl pipe presently in Columbia's distribution system.

Over the five-year course of this long-term infrastructure improvement plan, Columbia's

primary focus in its accelerated main replacement program is replacing its "first generation"

bare steel and cast iron pipe, which is most susceptible to failure from corrosion, cracks and

leakage. If however, during any main replacement program other facilities are located adjacent

to the project that are prone to fail such as unprotected coated steel pipe, ineffectively coated

steel pipe, Aldyl-A, etc., those facilities will also be replaced. Collectively, all of the distribution

main that is replaced is considered 'eligible property" for the DSIC under §1351(2)(i).

4

Gas Service Lines

Bare steel customer service lines, whether owned by the Company or its customers, are

also subject to the same elements that affect the physical integrity of Company-owned mains

that are being replaced across Columbia's system. Consequently, it is necessary to replace

bare steel customer service lines and any other customer service lines that are incapable of

handling the new system pressures or not up to current code requirements, along with

appurtenant facilities, such as excess flow valves, service regulators, meter risers, fittings, etc.,

in conjunction with Columbia's main replacement program. Since customer-owned service

lines that cannot, or potentially cannot, operate safely at the new pressures must be replaced

in conjunction with main replacements, and because it would not be practical or efficient to

require customers to arrange for replacement of customer-owned services at the time of a main

replacement, it is reasonable for Columbia to pay the cost of replacing customer-owned service

lines. The customer will continue to own and have the responsibility to maintain a customer-

owned service line after replacement. By Order entered at Docket No. P-00072337, the

Commission approved Columbia's request to replace customer-owned service lines in

conjunction with the Company's main replacement efforts. Columbia books the cost of these

customer-owned service line replacements to the Company's mains account just as it would

book the cost of other customer-owned property, such as driveways, that are replaced as part

of a main replacement project. Gas service lines and insulated and non-insulated fittings are

considered eligible property under §1 351(2)(iii) of the Act.

In the time since the Commission granted the Company's request to replace customer-

owned service lines the related investment has been included in rate base and, as such, has

been recovered through base rates. The USIC provisions of Act 11 are designed to "provide

an additional mechanism to recover the costs related to the repair, improvement and

replacement of eligible property." The investment in customer-owned service lines is directly

and solely driven by Columbia's accelerated infrastructure replacement program. It is therefore

5

appropriate that the investment in customer-owned service lines booked to the mains account

is considered eligible property as "other related capitalized costs" under §1351 (2)(vi).

Excess Flow Valves

As part of the infrastructure upgrade, Columbia is installing excess flow valves on nearly

all services connected to the replacement mains that operate over 10 pounds of pressure.

(The exception would be for those commercial and industrial customers whose consumption is

over 5,000 CFH per hour.) These valves are not replacement property in that they do not

function on a low-pressure system and therefore were not part of the property being replaced,

but are now being incorporated as a part of the medium pressure infrastructure being installed.

Excess flow valves are not capitalized as distinct units of property on the Company's books;

rather the associated costs are included in the capitalized cost of the service lines. Excess

flow valves are considered eligible property under §1 351(2)(v) of the Act.

Risers

Risers, which are the sections of pipe that connect the service flne to the meter, are

among the facilities replaced in concert with the service lines. Like excess flow valves, risers

are not reflected as distinct units of property on the Company's books. The costs associated

with risers are capitalized as part of the service lines replaced. Risers are considered eligible

property under §1351(2)(vi) of the Act.

Service Regulators

As Columbia's distribution system is upgraded to medium pressure, it is necessary to

install additional regulation on each customer's service line. Service regulators lower the

pressure of the gas at the customer's premise so that it can safely be delivered from the

distribution system into the customers' premises. Service regulators will be installed on each

service line replaced that will operate over one half pound per square inch (i.e. anything greater

than 'low pressure" delivery). The installation of regulators will therefore generally track the

number of service lines replaced. In most service line replacements, a prefabricated meter set,

consisting of the meter bar and regulator, are installed. Consequently the cost of this

equipment is included in the capitalized cost of the service lines. Since service regulators must

be installed in all modernization projects that involve increasing the pressure in the main,

service regulators are considered eligible property as "other related capitalized costs" under

§1 351(2)(vi).

Meters, Meter Bars, Valves

Columbia continually tests and replaces its stock of meters as appropriate to maintain

safe and reliable service and continue accurate customer billing. Additionally, as the

automated meter reading (AMR) system was deployed across Columbia's territory, meters that

were not compatible with the AMR device were also replaced. As services lines are being

replaced, meters are often relocated from the edge of the customer's property line often near a

road, to a location closer to the building for enhanced safety. When appropriate the meters are

also replaced. This replacement activity, while not easily projected as the customer-owned

facilities are not known, will continue to be a component of the accelerated main replacement

program 2

A meter bar is the apparatus upon which a meter sits and is sized according to the

equipment that it supports. With the replacement of low pressure infrastructure with medium

pressure infrastructure, regulators are now installed on the meter bar, requiring a change of the

meter bar, although not necessarily of the meter itself. Meter bars are not unitized, but rather

2 Industriar measuring and regulating equipment will also be subject to replacement and therefore included in

requested recovery although recorded under separate FERC accounts.

'4

are considered installation equipment and the cost of that equipment is capitalized into the

service line accounts. These costs will be incurred as service lines are replaced.

The Company routinely installs a meter inlet valve as well as a meter outlet valve on the

meter bar to control the flow of gas 3. These valves are installed on each customer service line

that is renewed as part of the Company's accelerated pipeline replacement program. Like

other appurtenances, these valves are not reflected as distinct units of property on the

Company's books. The costs associated with inlet and outlet valves are capitalized as part of

the service lines replaced.

Meter bars are deemed eligible property under §1 351 (2)(vii) of the Act. In those

instances where meters are replaced, they are considered eligible property under §1351(2)(vii)

of the Act. The inlet and outlet valves are considered eligible property under §1 351 (2)(iv) of

the Act.

2) Schedule for planned repair and replacement of eligible property

Replacement

Under the accelerated main replacement program in the next five years, Columbia will

focus on replacing existing bare steel and cast iron mains and other related facilities based on

the needs driven by the distribution system, in accordance with the basic tenets of system

engineering and planning. Given the current replacement rate and capital plans, Columbia

anticipates that the replacement of cast iron and bare steel will be completed in approximately

seventeen years, or by the end of 2029. Replacements are determined based on the

condition and age of the pipe, geographical proximity, leak history the capacity needs of the

In most renewals of customer service lines, curb valves and curb boxes are no longer used. However, in those

infrequent situations when a curb valve and/or a curb box is necessary, they are capitalized as part of the service

line renewed rather than being reflected on the Company's books as distinct units of property. To the extent that

a curb box and/or a curb valve are installed in a customer service line, those items are considered eligible property

under §1351(2)(ii), §1351(2)(iv) and §1351(2)(x) of the Act.

' After that, Columbia plans to focus on replacing other first generation distribution system components such as

Aldyl-A, ineffectively coated steel pipe, distribution regulator stations, etc.

E]

area, and expected growth in system demand requirements. Columbia employs a systemic

rather than segmental approach, reflecting the belief that the specific program approach is the

most effective way to deal with the complexities of its unprotected steel situation.

Annually, Columbia attempts to identify the highest risk segments and prioritizes those

replacements each year. Columbia utilizes Optimain DS® as a tool in the identification of the

most efficient plan to accomplish this goal. Optimain DS® is a comprehensive software

solution being used by all NiSource Gas Distribution Companies to help assess and prioritize

the risk associated with priority mains and allocate capital towards those risks. Optimain DS®

continually evaluates our priority pipe network, and directs the attention of engineers and

operators to the riskiest pipes. Columbia's approach targets larger geographic replacement

areas mixed with individual high risk segments to insure efficient utilization of capital. Trends

and performance are monitored by Columbia's Operations Center. Optimain DS® utilizes

many environmental and pipe condition factors obtained from field reports to develop and

calculate the risk factors for each segment of pipe. Some examples include:

• Pipe Size, Pressure and Pipe Material

• Leak history

• Ground Cover Type (grass, concrete, etc.)

• Service Length/Building Proximity

• Building Use (hospital, etc.)

• Population Density

• Pipe Condition and Depth

• Coating Condition

This is consistent with Columbia's Distribution Integrity Management Plan (DIMP) that

complies with 49 CFR 192.1007. In Columbia's DIMP plan, replacement programs are

referenced as one of the measures to reduce risk. Columbia's pipe replacement program

NO

impacts risk and reduces the probability of three threats identified by the DIMP Steering Team

as corrosion, natural forces damage, and material or weld failure.

Attachment A to this Plan is a list of the projects currently engineered for 2012 through

2013. The distribution system is reassessed and projects are reprioritized each year based on

the most current data available. As such, the list of projects is a dynamic roster that is subject

to modification based on emerging conditions. It will also be supplemented throughout the

calendar year to reflect the continued assessment of system conditions. These modifications

and additions account for differences between the projected annual replacement footage and

the total of projects shown on Attachment A. Additionally, mandatory replacements, non-

reparable leakage and active and atmospheric corrosion continue to drive replacement of

segments of pipe that are not reflected in this Plan and will impact the ultimate timing of the

completion of projects on the Plan.

Repair

In 2007 Columbia began an accelerated leakage survey program to inspect all bare

steel and cast iron mains at least annually, instead of the three year interval which is required

in the leakage survey requirements of CFR 49, Part 192. As a result, Columbia routinely

exceeds the requirements of existing Code of Federal Regulations, and this accelerated survey

process provides the Company the ability to discover system leakage on a much timelier basis

than if it were only meeting the minimum federal standards. Until such time that sU of the at-

risk pipe is removed from Columbia's distribution system, an aggressive leakage survey—as

Columbia employs today—will be key to maintaining the safety and reliability of the existing

infrastructure.

The following system enhancements for 2013 Columbia Gas of Pennsylvania operations

have been identified: to accelerate the repair rate of open Type-2 leaks, to increase the use of

camera-based technology to identify cross-bore conflicts, to deploy GPS technology to identify

10

the location of all new facilities, and to enhance damage prevention advertising and contractor

outreach.

The pipeline safety action enhancement agenda identified above, in conjunction with the

ongoing bare steel, cast iron, and wrought iron accelerated replacement program, is designed to

address the key risks identified in Columbia's Distribution Integrity Management Program Plan

("DIMP Plan"), and continue to reduce the pipeline safety risks inherent in the Columbia

system .

3) Location of the eligible property

Columbia's priority pipe is located throughout its service territory. As described earlier,

Columbia's service territory comprises 26 counties throughout Western and South Central

Pennsylvania as shown in the image below.

Columbia notes that to the extent these repair activities are charged to Operations and Maintenance Expense,

they will not be recovered through a DSIC.

11

Eligible property is located in each of these counties. A precise static identification of

each piece of eligible property throughout Columbia's service territory at any given time would

be impractical due to the geographic diversity of Columbia's service territory and the

distribution of eligible property throughout that service territory, and inappropriate given the

ever changing risk profile associated with individual segments of distribution facilities across

the service territory. Columbia utilizes a systemic approach to determining the property to be

replaced based on the age, condition, geographical proximity, leak history, and capacity needs

of the area as described in section 2 above. The specific projects identified are then

engineered for a calendar year beginning in the fourth quarter of the preceding year in

accordance with expected capital budgets. This systemic process ensures that the Company's

capital dollars are being optimally invested by replacing the riskiest pipe. The fact that the

process is conducted annually ensures that any segments of pipe whose risk profile has

changed from the previous analysis (e.g. more leaks, different ground cover, etc.) are

addressed appropriately.

Columbia anticipates that the Annual Asset Optimization Plan required at 66 Pa. C.S.

§1356 will be used to provide the Commission with current specific annual replacement

projects as well as address any changes that were made in the implementation of the prior

year's plan.

4) Reasonable estimate of the quantity of property to be improved

Proiected annual feet of pipe

• 2013 625,000

• 2014 625,000

• 2015 525,000

• 2016 525,000

12

• 2017 500,000

It should be noted that these replacement footages are estimates that are not based on

actual projects already designed, but approximations based on average cost-per-foot estimates

from actual construction costs experienced in 2011 and 2012. It should be expected that these

footages will vary from the estimates shown above based on a number of operational variables

that could include but are not limited to: the number of services in the various segments in any

given year, the actual pipe type installed in any given year (plastic or coated steel), the

character of the area (urban, suburban, rural, right of way) and the municipality where the work

is taking place (there are dramatically different permit fees and restoration standards required

at the municipal level across Columbia's operating territory).

Prolected annual number of services

In addition to the mains, it is estimated that CPA will replace 7000 to 9,000 service lines

per year over the next five years for a total of approximately 36,000 service lines by the end of

2017. As discussed above, excess flow valves and regulators are installed and risers and

meter bars are replaced in concert with the service line replacements but are not separately

identified. The quantities involved will be reflective of the service line replacements and the

associated costs will be included in the capitalized cost of service lines.

Proiected annual number of meters

Meter replacement will be driven by conditions found at each service location and

therefore cannot be forecasted based upon specific defined infrastructure projects. However, it

can be reasonably estimated that approximately 2000 to 4,000 meters will be replaced

annually over the next five years.

13

5) Projected annual expenditures and measures to ensure that plan is cost-effective

It is important to note that beyond 2014, the capital budgets associated with the

projected replacement activity are approved in the fourth quarter of the year preceding the

projections. Therefore, these estimates are based, among other things, upon current capital

markets, current economic conditions and Columbia's projected revenues given its current rate

structure. These estimates will also drive the projected quantity of property to be improved

stated in paragraph 4 above. Additionally, the Age and Condition capital budget includes

projects that are not DSIC eligible. These projects generally represent less than 3% of the Age

and Condition budget.

Prolected Annual Budget for Age and Condition, Upgrade and Mandatory Replacement 2013 -

2017

. 2013 $151,600,000

2014 $148,900,000

. 2015 $120,600,000

2016 $119,400,000

2017 $116,900,000

Cost-Effectiveness

As stated previously, Columbia employs a systemic rather than a segmental approach.

Efficiencies are maximized and costs minimized by addressing larger segments of the system

than had historically been undertaken, and carrying out replacements on a planned, systemic

basis. Further, contractor resources are concentrated and competitive bidding processes are

leveraged in order to drive down costs of time and materials. By identifying larger segments of

the system that require attention (through leak rates, pipe condition reports, and repair

14

percentages), Columbia can focus resources and complete full segment replacements and tie-

ins, in a systematic fashion, thus reducing the overall quantity of bare steel in the system as

quickly and efficiently as possible, with minimal disruption to the customers and municipalities

that we serve.

By including the integration of Columbia's program work with State and municipal

improvements in the systemic approach, costs are minimized. Columbia is able, through

competitive bidding, to continue to secure long-term, lower unit cost contracts with various

utility installation contractors. Columbia is also able to purchase larger quantities of

construction materials by competitive bidding, resulting in lower cost, long-term contracts. By

these means, Columbia was able to reduce costs by moving away from a segment by segment

approach.

Over the long term there is an item from an operations perspective that continues to

challenge Columbia's ability both to perform system maintenance and to replace facilities in a

cost effective manner, and that is the recent trend from some municipalities in enacting costly

excavation permit fees and extensive restoration requirements. While Columbia has been

vigilant in trying to negotiate the fees and requirements to reasonable levels, there is not

sufficient statewide legislation to support this effort in a systematic way. Permit fees and

restoration requirements can be seen as a source of easy revenue for some municipalities and

can create a burden on all rate payers through rising construction costs. Replacing aging

facilities in coordination with planned municipal paving projects is one way Columbia is

attempting to manage these rising costs, but that alone does not mitigate the entire concern.

For new and replacement mains and services, Columbia is using plastic or cathodically

protected steel throughout its system. Coated steel pipe continues to be used when higher

distribution pressures are required, but it is cathodically protected with an electric current.

Cathodically protected steel has all the advantages of steel in terms of strength and, because

of its impressed electrical current, is highly corrosion resistant. However, it is more costly to

15

purchase and install, and requires more ongoing maintenance, than the next generation pipe -

plastic. Cathodically protected steel will be used in any system that operates at high-pressure,

as well as in any above ground installation, such as a bridge attachment.

Plastic pipe has proven to be very good for distribution-level pressures. It has strength

and flexibility, and as a result, is generally immune to the stress of ground movement. Plastic

is also less costly to purchase and easier to join and install than steel pipe. Plastic does not

corrode and therefore does not require cathodic protection.

The single drawback to plastic is its relative vulnerability to third party damage

compared to cast iron or steel. Asa result, excavators who do not dig by hand (as required by

One-Call laws) in the vicinity of plastic facilities are very likely to cause pipeline damage. Cast

iron and steel piping have greater tensile strength and thus are somewhat more likely to resist

external impact.

Columbia has improved its locating performance and excavator outreach to reduce risks

to the system caused by excavator damage. In addition, Columbia has started using 'marking

balls" when installing its new plastic facilities. These marking balls are placed in the ground

above the pipe after it has been installed and enable Columbia to locate it later using electronic

technology.

The initial installation of natural gas distribution pipe requires the excavation of a trench

usually under or adjacent to a public street into which the pipe is laid. Then new or existing

customer services are connected to the new main. Installation of natural gas distribution pipe

can be a major inconvenience for residents, business owners, and municipalities. In some

circumstances where smaller diameter plastic facilities are installed to replace larger diameter

steel piping, the cost and inconvenience associated with excavating a trench can be reduced

by inserting the new pipe through the old piping. This involves smaller street cuts for the

insertion plus cuts associated with service line and intersecting main tie-ins. Even if a

16

replacement main must be laid rather than inserted, the use of smaller plastic pipe rather than

larger steel or cast iron pipe will produce a saving in material costs.

6) Manner in which replacement of aging infrastructure will be accelerated and how

repair improvement or replacement will maintain safe and reliable service.

As noted above, Columbia determined that the most effective way to mitigate the

concern associated with bare steel corrosion and cracks on cast iron on its system is the

accelerated replacement of bare steel and cast iron main and to survey that same material

on an annual basis until it can be replaced. With regard to leak survey and repairs,

Columbia routinely exceeds the requirements of the Code of Federal Regulations, doing

more leakage surveys than at any point in the Company's history and, as a result of

Columbia's comprehensive survey and leak reduction initiative, the Company has reduced

open Class 2 leaks by nearly 50% since 2007:

Year Open Class 2 Leaks

2007 3,755

2012 (as of September) 1,924

% Reduction 48.8%

With regard to the accelerated replacement of bare steel and cast iron, in 2007,

Columbia began to accelerate the replacement rate of bare steel and cast iron pipe. Columbia

has invested over $400 million since that time to replace cast iron bare steel mains and

services. Since 2006 (as demonstrated in the Annual DOT 7100 reports) Columbia has

already replaced or retired 17.3% of the total amount of cast iron and unprotected bare steel

that existed on its system five years ago, which represents a reduction of approximately 400

miles of bare steel and cast iron mains. The projected investment over the next five years is

17

expected to replace another 2,800000 feet or 530 miles, representing an additional 23.4% of

the cast iron and unprotected bare steel in the system prior to 2007.

In 2011 alone, Columbia spent approximately $92 million and replaced over 100 miles

(533,765 feet) of bare steel and cast iron, which equateg to an annual replacement of over

5.2% of Columbia's remaining first generation pipe. Another 97 miles (510,000 feet) are

anticipated to be replaced by year end 2012. At this rate, Columbia would replace its entire

remaining inventory of first generation pipe in 17 years, or by year-end 2029. 6

In recent years, Columbia has determined that there are an increasing number of leaks

in areas with a high concentration of unprotected pipe. In fact, corrosion on these first

generation mains and services represents over 85% of all the leakage that occurs annually on

mains in the Columbia distribution system, making bare steel and cast iron mains at least 16

times more likely to experience leakage than plastic or cathodically protected facilities. As a

result of this clear trend, Columbia continues to believe that it needs to replace the bare steel

and cast iron system at a more rapid rate than it did prior to 2007. Further, Columbia intends to

continue the accelerated pace of its first generation main replacement actMties.

Table I below sets forth a comparison of Columbia's replacement activity in three

periods. Period 1 includes annual footage of cast iron and bare steel (priority) pipe replaced for

the six years prior to the initiation of Columbia's accelerated replacement program. Period 2

depicts the amount of priority pipe replace by year since the accelerated program began and

Period 3 projects the annual footage of that pipe that will be replaced under the term of this

Long-Term Infrastructure improvement Plan.

This replacement rate is contingent on future access to capital over the long term. Events, such as the freezing up of capital markets experienced in 2003, can affect future capital dollar projections.

18

Table I

Priority Pipe Retired/Replaced per Year (feet)

Period 1 Period 2 Period 3 (estimate) 2002 232,320 2007 355,764 2013 625,000

2003 179,520 2008 528,567 2014 625,000

2004 201,712 2009 344,488 2015 525,000

2005 174,240 2010 322,583 2016 525,000

2006 282,518 2011 533,765 2017 500,000

2012 (projected) 510,000

Average/Year 214,062 432,528 560,000

On an average basis since 2007 Columbia has more than doubled its bare steel and cast iron

retirements/replacements to approximately 435,000 feet per year, compared to the 2002

through 2006 timeframe where approximately 214,000 feet per year was retired/replaced.

Period 3 in the Table above demonstrates that not only is the accelerated pace of replacement

projected to continue, but to increase, on average, an additional 110,000 feet per year over the

period 2013-2017.

The next table provides a similar comparison of service line replacement.

Table 2

Service Lines Replaced per Year

Period 1 Period 2 Period 3 (estimate)

2002 2,710 2007 5,222 2013 7,000-9,000

2003 2,809 2008 7,381 2014 7,000-9,000

2004 3,777 2009 4,661 2015 7,000-9,000

2005 3,743 2010 5,241 2016 7,000-9,000

2006 3,407 2011 7,603 2017 7,000-9,000

2012 7,452

Average/Year 3,289 6,260 8,000

19

Again, the accelerated pace of infrastructure replacement in evidenced in the nearly two-fold

increase in the number of service lines replaced in the historical Period 1 and current Period 2.

Period 3 shows a projected annual range of replacement as the particular location/prioritization

of projects completed each year will drive the number of service lines ultimately replaced.

In terms of capital spending, Table 3 illustrates the increased investment in DSIC

eligible property across the three periods.

Table 3

Age and Condition, Betterment, Mandatory Replacement Investment ($)

Period 1 Period 2 Period 3 (estimate)

2002 9,996,000 2007 51,235,000 2013 $151,600,000

2003 14,191,000 2008 71,772,000 2014 148,900,000

2004 21,327,000 2009 57,333,000 2015 120,600,000

2005 29,541,000 2010 56,595,000 2016 119,400,000

2006 32,089,000 2011 106,696,000 2017 116,900,000

2012 126,400,000

Total $107,144,000 $470,031,000 $657,400,000

Average/Year $21,428,800 $78,338,500 $131,480,000

% over prior period 338.69% 39.86%

In sum, Columbia has made significant progress since 2006 in delivering and

maintaining a safe and reliable distribution system for our customers. However, the system

data is clear that as first generation bare steel and cast iron pipe continues to age, its condition

will deteriorate at an increasing rate, and Columbia will have to continue to focus on the

accelerated replacement of bare steel and cast iron to address the problems associated with

aging infrastructure.

Further, because first generation AldyI-A plastic is also failing at a rate much faster that

the newer polyethylene materials, Columbia intends to replace these facilities identified though

Ra

leak investigations, or when they are present within the scope of projects planned in the

course of the bare steel and cast iron replacement program.

Columbia is replacing the segmented, 19th and early 201h century designs of its system

with a more integrated, 21 century system design. This integrated, higher pressure (up to a

maximum of 99 pounds) system will enable Columbia to substantially reduce the current need

for pressure regulators that are presently located throughout its system, thereby making the

system safer, easier and more reliable to operate. A distribution system operating at these

higher pressures also will enable Columbia to install new safety devices in areas to be

upgraded. As part of the upgrade, Columbia is installing excess flow valves on nearly all

services connected to the replacement mains that operate over 10 pounds of pressure. (The

exception would be for those commercial and industrial customers whose consumption is over

5,000 CFH per hour.) These excess flow valves will shut off gas to a residence or business in

the event of a large pressure differential which is typically indicative of a major gas leak or a

service damaged by excavation. This results over time in a system where services are much

less vulnerable to safety risks from third-party damage.

Given that 85% of the Company's current main leakage is corrosion related, it is unlikely

that decreases in operating and maintenance expenses related to leak repairs will be evident in

the near term. However, as the percentage of bare steel and cast iron pipe is materially

diminished, it is reasonable to expect a reduction in such expenses over the long term.

Columbia is removing deteriorating portions of its system and enhancing the safety of

its system by ensuring replacement of facilities with new, longer lasting and safer materials. Its

system will continue to be able to provide deliverability at its Maximum Allowable Operating

Pressure ("MAOP"). The public will receive better service, with fewer interruptions.

21

7) Workforce Management and Training

Columbia Gas of Pennsylvania Workforce

Since 2008, Columbia Gas has been developing and monitoring a strategy to address

future workforce planning issues because of our workforce demographics as well as the

increasing infrastructure replacement activities. In 2009, the Company hired a full time

workforce planning coordinator to help develop a comprehensive, long term strategy to address

the challenges of an aging workforce.

The initial focus of our strategy was to do an analysis of the current workforce, the

potential exodus of employees over the next 5 to 10 years and a determination of the

competencies and skill sets that we would require in the future, as well as staff complement.

Initially, we have enhanced our recruiting efforts to address the volume of hiring as well as

advocate a more diverse workforce to mirror the communities we serve. This effort involves

reaching out to local minority groups, military sites as well as community and technical schools

to alert them to opportunities that Columbia is offering. We strive to bring new employees to

our organization that have a positive attitude and are willing to learn and develop quickly, thus

being able to assume more responsibility as employees are promoted or retire.

Concurrent with the recruiting efforts, the decision was made to bring the pipeline

locating function back in-house. By doing this, we were able to hire new employees into the

organization and put them into roles that allow them to learn our system, develop new skills

and eventually promote into jobs that are vacated by promotions or retirements. A significant

factor in this decision was Columbia's ongoing effort to reduce the number of third party

damages to our facilities.

Another important part of our strategy was the creation and use of multi-skilled

positions. The creation of these positions over the past few years has allowed employees to

develop a wider range of skills and to promote the transfer of knowledge from those employees

that will be leaving the company. These positions also offer the flexibility to utilize workers

22

based on the peak needs of the business. These multi-skilled employees provide the flexibility

to better respond to our customers and thereby enhance our cost effectiveness.

Contractors

Early in 2011, Columbia's affiliated service entity, NiSource Corporate Services

Company, began discussions around the impact of the escalating capital replacement program

on the supply of construction contractors. As the program had grown in the prior few years and

with a forecasted significant growth in the future years, a risk to successful execution was

having sufficient quality contractor crews.

Subsequently a decision was made to proceed with a Contractor Acquisition Strategy to

build longer term relationships with current blanket contractors. The objective was to establish

new contracts that include language enabling Columbia to become the "preferred customer" of

these contractors and entice the contractors to grow their business to support Columbia's

replacement program. A specific goal of this initiative was to position Columbia to have access

to sufficient qualified and experienced contract resources.

From early to mid-2012, meetings were held with incumbent blanket contractors to

share Columbia's capital future and begin the dialogue around proposed enhancements to the

blanket construction contracts. Columbia successfully reached agreements with those

contractors. Highlights of the new contracts are shown below.

New contracts established as of July 1, 2012.

• Extended the term until December 31, 2015.

• Alignment of the contract year with the calendar year beginning in 2013.

• Broadened geographic coverage enabling contractors to work across

operating center boundaries.

23

Expanded the contract scope to include projects involving polyethylene

pipe up to $5,000,000 in contract spend.

Added mechanisms for quarterly adjustments to baseline indexed values

for gasoline and asphalt plus accounted for unexpected costs to complete

contractual requirements.

Included an annual contract adjustment that is tied to a national Laborer's

contract for the Mid-Atlantic Region, Local 1058, Allegheny Zone 2,

Pennsylvania Contract.

• Aligned the responsibility for hard surface restoration to the construction

contractor that generated the work.

Each one of these changes was designed to enhance Columbia's ability to continue to

execute efficiently on its large scale capital program by providing certainty, clarity and flexibility

in the relationship between Columbia and its pipeline contractors. The new contracts establish

a long term, cost effective means of replacing Columbia's cast iron and bare steel pipe.

Operator Qualification

The NiSource Gas Distribution companies maintain a written Operator Qualification

Plan applicable to all Company employees, contractors and mutual aid individuals who perform

covered tasks on behalf of Columbia. The plan encompasses all aspects of ensuring a

qualified workforce and that its operations comply with relevant Federal Pipeline Safety

Regulations. A copy of the plan is included as Attachment B.

Additionally, all DSIC eligible capital projects are subject to inspection by Columbia Gas

of Pennsylvania employees.

24

Summary

in 2007 Columbia embarked on a longterm initiative to replace aging infrastructure in

its distribution system to ensure the provision of safe and reliable service throughout its

territory. Our planning and prioritization methods are dynamic and continually updated to

deploy resources in such a way that the safety of our customers, our employees and the

communities in which our faciUties are located is always the foremost consideration. As such,

each Annual Asset Optimization Plan to be filed subsequent to this Long Term Infrastructure

Improvement Plan will provide the Commission with refreshed projections and details of work

completed.

25

Appendix A

Atlahment A Page 1 of 35

CPA - 2012 Infrastructure Project Replacement Summary

12/7/2012

Project Name Install Footage

D-1581 Country Club Drive Area 3,125

Fairland Phase II 4,000

Pickwick Area - Bethel Park 3,000

College and Lincoln 8,700

D-4 Phase II 9,000

D-1 Phase 1 1,300

Winshire Area - Pittsburgh Norlh Side AMRP Phase 11 3,600

D-82 Cranberry Township 20,000

Kenyon Avenue Area 4,400

Delaware Avenue Phase Il 7,500

Willowbrook Road 8,800

D-5181 Allegheny River Crossing 1,200

Emlenton AMRP 6,000

D-8500 Duck Hollow 3,500

Cedar St, Jeannette 12,000

Atlahment A Pia,, 2 rf 35

• Project Name Install Footage

D-1254, Somerset 10340

Edgewood Rd, York 4000

E. Princess St, York 12,639

N. Main/Susquehanna Trail 3,500

Tn-Hill, York 4,100

S. MainlSunset, Shrewsbury 5,800

E Main, Dallastown 6,000

0-91 7688

Eliwood Avenue from College to Smiley 5,227

Amity Ridge RoadIS.R. 19 5,138

Brookwood Road and E. McMurray 4,515

Fairdale Avenue, Rice to Highland 4,360

Virginia Avenue, Madison to Park (0-84 and LP) 3,800

D-81, Logan Road to Northbrook Drive 3,748

Ninevah Road, Ron McHenry to Line Rd (9-30-1 3) 3,635

Willet 3,524

Linden Road, Thomas to EOL 3,254

Attahment A PnPj 3 0f35


Second Street, Watson to Water 3,120

Juirich, between Oakhurst and Maple 3,010

North Ohio Street, Girard to Marie 2,884

D-2756 between Van Neal and Old Scales 2,815

D-5263 (SR 0038 to SR 2005) (3-31-13) 2,581

Thornwood Drive, Greenridge to Milton 2,570

Hazel Avenue. Walnut to Dead End 2,436

Thornycroft/Shady

Mason Drive, Evelyn to Dead End

D-147 (Townwood Rd.)

2,431

2,335

2,254

E. Poland Av. 2,250

Beaver Road, 8th to 13th 2,200

Bell Road, D-5252 to S.R. 3009

SR 208 (R. McHenry to Nickleville) (11-30-12)

2,109

2,107

Redrock MP 2,089

D-63 Highland Road, Bethel Park

W. Corydon, (South to E.O.L) 11-30-12

2,064'

2,043

ALlahment A Pane 4 nI 3

• Project Name Install Footage

Rebecca St. 1,943

Blossom Hill Road, Middleboro to Gene 1,940

Wilson Drive, Penhurst to New Gate 1,905

D-81, Arthur Drive, Rinaman to Grubbs Road 1,887

Simplon and Varney Streets 1,844

Locust Street, 3rd to 4th 1,824

Hamilton Road 1,794

Meredith Steet 1,780

Devils Den Road, Pleasantview and Johns 1,742

D-81, Crows Run to Conway Walirose Road 1,720

McClane Farm RoadID-504 1,624

Pennsylvania, Water and Market (3-31-13) 1,609

Jefferson between Norman and Hewitt 1,591

EhIe, Oval to Coraopolis 1589

Pine Avenue, Case to Dead End 1,567

Noblestown Road 1,553

Lincoln Road, Forest to Coolidge 1,466

Attahment A Pie 5 nf3!i


S.R. 980 between Ohare and Vista drive 1,443

SR 0008 (B Street to Boyers Road) (1-31-13) 1,401

Daly Avenue, Phillips to Dorthea 1,400

LineAv. 1,397

Middle Street, Newport to Dead End 1,373

Spring Valley Road 1,365

Bellingham Avenue, Potomac and Durham 1,360

SR. 8, McCandless toCStreet (11-30-12) 1,341

Arlington 2400 Block 1,316

D-1, R-3321 to Route 51 1,300

Briercliff Road, S.R. 588 to Hillcrest 1238

Eccles 1,237

D-53, between Warrick and Phillips 1,226

SR 2003 (6-30-13) 1,208

River Rd 1,206

Second Avenue, East End Avenue to Beaver Street 1,200

S.R. 308 at Slippery Rock Creek 1,150

Allah ment A PriA F3 üf 35


Woodland Drive, Green to Dead End 1,119

SR2005 1,115

Walker Avenue, Mechanic to Kennedy 1,058

Industry 1,012

Main Street, Center to Walnut 11-30-13 1,012

Pilgrim Drive, Forty 'to end of line (7-31-13) 1,001

Lewis Avenue LP, S.R. 51 to Hays 1,000

Lambeth, Old Washington to S.R. 19 993

Forest Road, Glenmore Road to Edgewood Road 983

Barr Run Road, between Koci and Adamson 977

Burnside (Boyer to Welch) 966

Lavina Avenue, Church Place to Dead End 925'

Meadow between Pleasant and McNary 922

Wilmington Rd Crossing at Kenneth 900

Orchard Place 597

McMurray Road - medium pressure 891

Greenridge Road, Thornwood to Vermont 886

Attahmerit A P ~;np 7 nf v;


Rosewood Avenue, Briarcliff to Rania 824

Oxford Drive, Essex to Dead End 816

0-84 Johnson Avenue, Bechtel to Elm 810

Cedar Road/Right-of-Way 805

Springfield, between Murray and Rosewood 787

Clokey/Bowerhill 773

Pleasaritview Rd. 771

17th Street, between 3rd and 4th Avenues 767

McNary, between First and Poplar 753

Sugar Run (Emerald Longwall Mining Mitigation) 738

Patterson Avenue 715

0-86 Water Street 713

Highland, Route 19to Oxford 700

Green Drive 686

Nobles Lane 650

Columbia Drive, S.R. 980 to Arlington 625

Cottage Street, between Ross Avenue and 18th 610

Attahment A P;np R nf5


Chewton-Wurtemburg Road 607

Mecklem to Virginia (LP) 600

S.R. 980 bewteen Noblestown and North Branch 590

Kohlersburg Rd (LP) 576

Water Street (Mayport) 540

Meadow Lane, Valley to Planter 525

Sankey Court, Churchviewto Dead End 521

SR 2003 (11-30-13) 512

SR 551 at Beaver Creek 511

Merle Street 500

Jefferson (College/Pike) 500

Mercer Road 498

Peters Road, Gables to Orchard 492

Barbour (Bridge to Whitney) 470

Murphys Cut 453

Henderson bewteen High and Monterrey 450

Rosemary Drive, Franklin Park (D-81) 448

Atlahment A Poe 9 ofR5


AveIla 445

Baptist Road 440

D-81 Brandt School Road 440

Kirsopp Avenue 428

D-3764, between Rawson and Lynn Portal 418

Laurel Ridge 404

D-41 Park Avenue 400

Oak Alley, Wood to Main 398

Nevin Avenue, Hill to Hopkins 390

Heathville Road (1-31-1 3) 3

Grey Lane, Old Stuebenville to Dead End 375

Walker Flat/B Street 372

Chatsworth Street, Erdner to Sedalia 360

Station, Lewis Avenue to Elizabeth Street 352

Curry Hollow 342

Hilltop Acres 340

Lambeth 320

Atthhment A pnnp In nf


D-504 between Allison Hollow and Kings 316

Lawrence 310

33rd Street, 4th to 5th MR 310

Yale Drive, Queenston to Sinton 305

Sunnyland 300

Gosser 300

Ron McHenry 300

Hazeldell, Brownsville to Lutz 296

East Second Av 282

Brook Street, Interstate Parkway to Bonair 281

Noblestown Road 279

Leon 272

E Street aka Highland Av 271

Pine Hollow, Deweyville and W 11th 242

Pine Hollow, 13th and 14th 240

Trost 240

Knolls Drive - Jackson Knolls 226

Attahmerit A Paue 11 of 35


Grand Avenue LP 219

Shady, between Henderson and Southpointe 215

GStreet 213

Trost Street 206

Gallion 200

Gass Road 200

Woodlawn, Park to Madison 181

Replace Valve C-35 at Leon Street 149

Chestnut (insert 1 1/4" P) 144

Thompson and Kane 142

Valley St between Home and Peggy 138

Maryland Av - Alley from Winslow to Maryland 130

Homehurst 120

Seneca 120

Kendall (5-31-12) 112

Vineland, Jacob to Huff 105

Replace Valve C-30 at Boylston Street 100

Atfahrnent A Paue 12 of 35


Estella 95

Hasting Miii 92

Curry Hollow 88

Perry Highway, Manor to Wallace 84

Birmingham Avenue, California to Duff Alley 80

14th Street, 4th Avenue to 5th Avenue 80

Miliview and Summit 75

Ruthwood 70

Park Avenue, Josephine to School 70

Ruthwood 67

Clive Street, Mckinley to dead end 60

Lawnview Av 60

Millers Run, between Grant and Sherman 59

Tanager 52

S.R. 136, Eastpointe to Floral Hill 50

Grandview Dr 50

Pine Street 50

Attahment A Poo 13 of 3f

ProjectName Install Footage

Camfield 41

Princeton 40

Washington Street 40

Montgomery Av 30

Castle 28

D-4, between Washington and McCarrell 20

Pulaski Rd. - Neshannock - Corrosion Date 20

642 S Ray St ( Emergency Job Order) 20

Rail Car Road (6-30-13) 18

D-47, between Home Run and Hillsboro 15

McElree between McGowan and Elwood 10

D-217, between Duff and Linda Vista 10

Lathrop St - Cut out CPLG 10

Thorn Av. / Eliwood City Corrosion Date 6

Ohio River Boulevard 5

6621 Ohio River Boulevard 5

8" Wyatt Park(Wyatt Circle 7171) 8971

AttahmentA Pn 14 rf35


W Jackson Street (7301) 3912

Baltimore Pike (White Ch & Low Dutch) 3550

Poplars 3500

S Main - Mill to Ore (Active Corrosion) 3450

Mont Alto 2850

Scarboro (AC) 2809

Table Rock (LK) 2753

N Oak Ln (LK/OP) 2450

Pinchtown Road (OP) 2300

Basehoar School Road (Carry-over) 2210

Hillside Ave (LK) 2200

Somerset (AOP) 2080

Glendale (AOP) 1902

Corl St(AOP) 1900

N Belvidere: Madison - Lincoln (AOP) 1882

3rd Street (Optimain/AOP) 1745

E Main, Windsor (Carry-Over) 1646

Attahment A Page 15 of 35


Brockie/Wyndam Hills (AOP) 1592

E Aaron Dr ( AOP) 1527

West California (

LK) 1400

Hay Street 1377

Linden (AOP) 1327

Norway St 1293

Table Rock Ph 2 (LK) 1267

Maryland (AOP) 1215

Tn-Hill 1180

MtRose 1166

Pattison 1142

Alta Vista 1133

Meadowbrook (AC) 1062

Ogontz 1061

S Albemarle 1040' - 4" PMMP 1040

Linden Avenue (West to Hawthorne) 1000

2" Poplar (Wyatt Cirice) 989

Altaliment A P2ae 16af35


E South St 965

Wiltshire (AOP) 907

S. Howard 898

Simpson St 910' - 2" PMMP 888

McKee Street (AOP) 840

Stanton 810

Highland / K Alley ( OP) 806

Lee St 744

Lexington 686

Peyton Road 680

E Calder (LK) 675

Park 658

Topper/Harrison (Leak Driven) 599

S Yale & Ogontz (MT Rose & Spawn) 583

S Charles Street 581

Susquehanna Trail Leak (OP) 580

Baltimore SR 0016 548

Attahment A Page 17of35


E Jackson (Part of Pine St Large Project 7155) 541

Washington St 540

Water St 531

Warren St 525

Frederick Ct 654' - 2" PMMP 515

Carlisle Road (Harmony & George) 515

Cleveland 498

Maryland (Hartley-Elm - AOP) 490

Girard 450

S Sherman 441

Local Way, York 401

Bennett 400

Delta 370

Echo Ln 360

Shannon Ln (LK) 350

6 Mason 350

1'1 George 350

Allahrnent A Paae Th of 35

Project Name install Footage

N Washington 331

Eberts Lane 329

Cleveland 8" Critical Valve 308

Maple St 300

Pennsylvania (AOP) 278

Third St 202

W High & Howard (AOP) 192

Wilson Alley 132

E Princess St 65

Druck Valley 13

Clover 10

2" Palomino (Wyatt Circle) 10

Old National Pike 5366

D-7007 Mellinger 2500

Meadow Av 2487

W Garrett & R St 2320

Depot St 2137

Attahment A Pari IQ nfc


D-1254 Garrett Short 2086

*N7th bet Harrison & Pit* 1922

D-8664 1870

D-7011 Lowber Rd 1800

SR88 1800

D-7101 1766

D-7128 Kelly Run 1756

Chestnut Str 1653

Crawford 1441

NSecondSt 1340

Federal St liso

NJefferson Str 1175

CowanAve 1127

D-7024 PA Av 1075

Park Ave 1041

SRB8 1021

WBlakeAv 926

Attahrnent A Page 20 of 35


Scott Ave 916

White St 851

N Fourth St 850

Altman 847

"C" Rd (off SR 166) 831

D7007/D7024 825

PA Ave 809

Laurel Crest 803

St Clair 800

ShadyAv 755

Center Str 711

LewisAv 660

Mountain View 606

Bethel Rd 594

Greene St 577

Leisenring Ave 573

Eighth St 558

Attahment A P1A21 nf


D-8547 @ Lake Str 555

Grant St 530

2nd Ave 520

Scenery Str 470

Old Trail 386

Meadow Str 382

Second Str 326

Lincoln Ave 315

"R" St 279

LewisAv 275

Willow St 260

Pittsburgh St 234

SR 40, National Pike 207

ml of Oak & E Alley 200

D-7090 Energy Drive 190

7thStr 166

"AF" Alley/Be rkey Ln 157

Attahment A Paoe 22 of 35


Varsity Rd 121

Ash Street 118

W. George Street 76

EMainSt 74

Conrad Ave & 5th 57

D-8528 @ R-3033 36

Boulevard Str 30

Lewis Str 20

D-7090 Fox Stop Rd 7

D-7553 5

Center Str 5

Attahment A Page 23 of 35

CPA - 2013 Infrastructure Project Replacement Summary

12/7/2012


VanKirk 2,200

Kirsopp 3,000

EhIe 4,000

Freeland 2,400

Gearing 1,850

Lodge 1,200

Broadmoor Avenue 4,000

lroquios Drive 5,400

Fruithurst Drive 4,600

Cliff Mine Road 2,100

Glencoe 1250

Orchard/Parkway 3,400

Fairland Phase III 9,200

Tropical/Crane 8,500

D-1581 4,000

Atlahment A Pno 24 of 35


D-1 0183 10,000

Lincoln Avenue in McDonald 1,200

Wolfsdale 5000

CaIdwell Avenue 9,000

Franklin Avenue 1,500

Bucktown 8,400

Dutch Hill 4,800

East National Parkway 6,200

Shenango Road - Active Corrosion 3,100

W ittmer Street 1,160

4th Street - Active Corrosion 1 ,1 20

Ambridge Avenue - Active Corrosion 2,530

D-74 - Coraopolis 5,200

D-84 - Monaca 1,200

Sewickley Cast Iron - AMRP 3960

D-88 River Crossing 1,200

D-1 Phase 11 at Groveton 2,800

Attaliment A Pene 25 nf::5


Ray Street 3,800

Pershing Street 5,200

Emlenton MP Phase ii 3,400

D5181 Pickard Valley 4,500

D-4227 Phase I 3,800

Pleasant Drive 2,500

D-1254 Lichty School Rd 5,200

Franklin, Somerset AMRP 9,000

D-7024 Gregg Dr 2,500

D-7128 Craftmore Rd 4,970

Cedar St AMRP 12,200

Water Street, California AMRP 3,700

Ridge Av. (Juergens) 3,700

Penn St. (Juergens) 15,000

Company St. (Juergens) 2,600

Sycamore Rd (Wagaman) 2665 & 1000

11th Ave (Wagaman) 3763 & 4016

Attahment A Paae 26 of 35


Bridgeton Rd (Wagaman) 2,195

Lincoln Avenue (Martin) 3,100

Gettysburg Crossing HP (Martin) 3,420

College Ave AMRP ( Clark / Gill) 3,560

West Jackson Street ( Clark) 13,347

D-54 9,500

Ken Forest Drive 7,000

Connor Road 4,500

Joseph 3,000

Bowerh iii 2,727

Kingwood Street 2,578

Rt 51/ Rt 88 Interchange 2,400

Eccles 1,600

Beryl 1,350

Country Club 1,200

Groveland Street 900

Sylvania Avenue 900

Allahmenl A Pnnp 27 of r;

Project Name install Footage

Beaufort 772

Russellwood 507

Brig htwood Road 500

Brookline Blvd 400

Shaw Avenue 300

Dell Rose (Overbrook to Parkfield-ish) (2264-2292) 250

Gallion 200

LocustMP 10

Elberta 4,300

Bucktown 4,000

D-503 3,300

East National Pike 2,700

Midway 2,700

Lawrence 2,300

Franklin Avenue 2,000

D-48 1,860

Brown Alley 1,600

Altahment A Page 28 of 3


Burnside Road 1,400

Dunn Station Road 1,000

D-1810 Exposed Pipe 1,000

Noblestown Road 931

Burnside Road 800

Beeson 700

Spring Valley 650

O'Hare Road 600

12 Wells Drive 560

Chartiers Street 500

Johns Drive (Burgettstown) 500

Third Street 340

Fawcett Church Road 300

Mount View 20

4th Avenue (SR. 18), 32nd to 47th (SB No. 7341) 6,831

Diebold Road, Robert to Francis 2,611

D-75 Duss Avenue, Legionville to Harmony 2,344

Atlahment A Paae 290135


N. Baiph Avenue, Forest to United States 2,289

Shenango Road, Holly Drive to Park 2,094

3rd Street, Insurance to Market 2,015

Grand Avenue, Phillips to 1st Street 2,010

Economy Street, Keystone to Pioneer (SB 7371) 1,730

Hopkins Church Road, Law to Camp Meeting Road 1,700

Wexford Bayne Road, Lloydmont to Limerick 1,621

Roosevelt Avenue, Meade to Starr 1,522

Fern Hollow Road, Meta to Westholm 1,453

Viruth Street, McClure to Benton 1,300

D-81, From Concord Church to 989 1190

Cleveland Avenue, Florence to S.R. 65 1,000

8th Street, Glenwood to Melrose 943

Orchard Avenue, S.R. 65 to Center 933

Blockhouse Run Road 932

Forest Avenue, Ravenswood to Maryland 912

Rosemary Drive, Brandt School to Dead End (MP) 912

Attahment A Prn' M nf r;


Gringo Clinton Road--Supply from POD 890

Woodland Road, Bradford to Lake 747

21stAvenue, 18thto19thStreet 680

Naugle Lane, Blackhawk Road to Pine Street 673

Beaver Road, Lantern to Sycamore 497

3rd Avenue, 5th to 6th Street 479

Rosemary Drive, Franklin Park (D-81) 448

Centennial, Pine to Canterbury 415

8th Avenue, 4th St to 5th St in Patterson Hgts 400

Wapello Avenue, Davis 'to Pemberton 322

Backbone Road 40

Delaware Phase 4 (SB 7323) 10900

Creekview Drive (SB 7361) 5,900

D-22 - Branchton to Keister 5,100

Miller Road Phase IV 5,000

D-80, SR 258 to Fergus 3,134

Miller Road Phase 111 2,600

Ada hment A pr,.q1


Kay St. Clyde to Water - Wampum 2.414

Stanton and Rose Av 2,200

Beaver Street - New Galilee 1,800

Eliwood Road (Rt. 65) 1,535

Argonne 1,400

Chapel Dr 901

Fire St Eliwood City 800

Rhodes Place 600

West Poland Av - Bessemer 500

Eastbrook Rd Relocation 400

Edgewater Rd - New Galilee 241

10 W. Sharp Street, S. Jefferson to End of Line 150

Moorehead Av Between Jefferson and Hanna St 100

Summit St. 2nd to 4th 25

Nickelville Road (SR 4007) Driveway Conflict 1,000

Summit in Foxburg 800

E. Church Street (W. Sunbury) 733

Attahment A Fade 32 of 35


SR 4012 (8-31-13) 619

SR 38/208 PA DOT Project 512

SR 308 400

D-5245 in Clintonville (4-30-14) 20

S.R.2009 1638

Huber Road, Curllsville Road to end of line 1140

S.R.66 800

S.R. 2003 (Olean Road) 295

Seaward Avenue, Tuna Cross Roads to Riley 5148

D-4002, S. R. 219 to Minard Run Road 1318

E. Main Street MP, R-4167 to SR 346 703

High Street, Minard Run Road to end of main 619

Nancy Lane, B Road to BJ Road 550

Lake Circle Drive, Lambert to Webster 332

River (Elm to end of line) 260

Future Way RR Bridge X-ing at Kendall Ck (5-31-14) 122

Birch Street 100

Attahment A Paue 33 of 35


D-4005 at Beaver Pond (4-1-13) 4031'

Prospect Street, Divison to Conewango 3,882

Liberty Street and Third Ave 1,658

D4005 near CP 1469 (5-31-13) 1,500

4TH Avenue, Public to Chestnut (12-31-13) 20

SR 0030 5,800

Route 30 4,000

Margaret/Catherine (LK) 2,300

Lincoln Avenue - Gettysburg College 2,300

Rocky Mountain - Corrosion project 1,000

Carroll Rd (leakage) 733

W Main St - Corrosion 600

Bucha non Valley Rd - AOP 400

D-8542 4200

D-7055 3005

Clover 2,673

ALLEN & 4TH 2,530

Attahment A Ptie 34 c,f 35


Waddell St 2,436

D-7169 - Warfel Road 2,432

Ben Lomond 2,269

FoundryAv 1,916

D-1254 1,600

D-7169 - Laureldale Road 1,562

D-7169 - New Hill Road 1335

Brashear Ave 1,326

D-7191 1,258

Wendel Rd 1,190

State St 1,045

Felgar Rd @ Franklin 1,030

MapleLn 1010

Clawson 979

Allen (1st-3rd) 775

Main SIr 759

Fiscus 718

Atlahnient A


D-7128Barneys Run 670

Flinn St 626

Blue Jay Drive 583

V Alley 479

S. Rosina Ave 411

Fifth St 373

D721 5/Fifth St 250

D-7009 80

Appendix B

Attachment B Page 1 of 67

IM ixu

Columbia Gas Distribution Companies 1 Kentucky, Maryland, Ohio, Pennsylvania and Virginia

DOT OPERATOR QUALIFICATION PLAN 49 CFR PART 192, SUBPART N

Revised 04-01-2012

c• Written qualification programs were established for all of the Columbia Gas companies on or before April 27, 2001

•:. Written qualification programs were established for all of the Columbia Gas companies identifying covered tasks performed on Columbia's facilities on or before April 27, 2001.

•:• Written qualification programs were established for all of the Columbia Gas companies identifying initial qualification methods for the evaluation of individuals performing covered tasks prior to October 28, 2002.

•:. All individuals performing covered tasks as of October 28, 2002, and not otheiwise directed and observed by a qualified individual, were qualified prior to October 28, 2002.

1 The Columbia Gas Distribution Companies (Columbia Gas) are: Columbia Gas of Kentucky Columbia Gas of Maryland Columbia Gas of Ohio Columbia Gas of Pennsylvania Columbia Gas of Virginia


Table of Contents

Federal OQ Rule . 3

Introduction..........................................................................................................6

Scope & Program Performance and Improvement .........................................................7

Definitions............................................................................................................8

Section A CoveredTasks ............................................................................................12

Section B Evaluation of Qualification ..............................................................................14

Section C Non-qualified Individuals ...............................................................................16

Section 0 Performance contributing to an incident ............................................................17

Section E Reasonable Cause to Verify Qualification .........................................................18

Section F Communicate Change ..................................................................................19

Section G Qualification Evaluation and Intervals ..............................................................20

Section H Training.....................................................................................................22

Section 1 Significant Modification Communication ...........................................................24

Section J RecordKeeping ..........................................................................................25

Section K Mutual Aid, Mergers and Acquisitions ............................................................26

Section L Management of Change (MOC)..............................................................27

Exhibit A TaskList ....................................................................................................30

Exhibit B Subsequent Qualification Intervals & Interval Matrix ......................................44

Exhibit C Methods for Verifying Qualification of Contract Personnel ....................................49

ExhibitD Protocol for Evaluating Operator/Contractor OQ Plan ........................................54

Exhibit E Failureto Qualify .........................................................................................63

Exhibit F Notification of Change Form ..........................................................................65

Exhibit G MOC Proposed Change Form ........................................................................67

2

Atlachment B Page 30167

The Rule:

49 CFR 192 Subpart N- Qualification of Pipeline Personnel.

Subpart N—Qualification of Pipeline Personnel

§ 192.801 Scope.

(a) This subpart prescribes the minimum requirements of operator qualification of

individuals performing covered tasks on a pipeline facility.

(b) For the purpose of this subpart, a covered task is an 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.

Amdt 192-86 64 FR 46853, Aug 27, 1999

§ 192.803 Definitions.

Abnormal operating condition means a condition identified by the operator that may

indicate a malfunction of a component or deviation from normal operations that may:

(a) Indicate a condition exceeding design limits; or

(b) Result in a hazard(s) to persons, property, or the environment.

Evaluation means a process established and documented by the operator, to determine

an individual's ability to perform a covered task by any of the following:

(a) Written examination;

(b) Oral examination;

(c) Work performance history review; after October 28, 2002 may not be used as

the sole method of evaluation. (d) Observation during; after December 16, 2004 may not be the used as the sole

method of evaluation

(1) Performance on the job.

(2) On the job training.

(3) Simulations; or

(e) Other forms of assessment.

Qualified means that an individual has been evaluated and can:

(1) Perform assigned covered tasks; and

(2) Recognize and react to abnormal operating conditions.

JAmdt 192-86 64 FR 46853, Aug 27, 1999 as amended by Amdt. 192-86A, 66 FR 43523, Aug. 20,

2001]

3


§ 192.805 qualification Program.

Each operator shall have and follow a written qualification program. The program shall

include provisions to:

(a) Identify covered tasks;

(b) Ensure through evaluation that individuals performing covered tasks are qualified;

(c) Allow individuals that are not qualified pursuant to this subpart to perform a

covered task if directed and observed by an individual that is qualified;

(d) Evaluate an individual if the operator has reason to believe that the individual's

performance of a covered task contributed to an incident as defined in part 191 of

this chapter;

(e) Evaluate an individual if the operator has reason to believe that the individual is

no longer qualified to perform a covered task;

(f) Communicate changes that affect covered tasks to individuals performing those

tasks.

(g) Identify those covered tasks and the intervals at which evaluation of the

individual's qualifications are needed;

(h) After December 16, 2004, provide training as appropriate, to ensure that

individuals performing covered tasks have the necessary knowledge and skills to

perform the tasks in a manner that ensures the safe operation of the pipeline

facilities; and

(i) After December 16, 2004, notify the Administrator or State agency participating

under 49 U.S.C. Charter 601 if the operator significantly modifies the program

after the Administrator or State agency has verified that it complies with this

section.

rAmdt 192-86 64 FR 46853, Aug 27, 1999; as amended by Amdt 192-100, 70 FR 10332 Feb 25,

2005;

§ 192.807 Record keeping.

Each operator shall maintain records that demonstrate compliance with this subpart.

(a) Qualification records shall include:

(1) Identification of qualified individual(s);

(2) Identification of the covered tasks the individual is qualified to perform;

(3) Date(s) of current qualification;

(4) Qualification method(s).

(b) Records supporting an individual's current qualification shall be maintained while

the individual Is performing the covered task. Records of prior qualification and

records of individuals no longer performing covered tasks shall be retained for a

period of five years.

Amdt 192-86 64 FR 46853, Aug 27, 1999

§ 192.809 General.

(a) Operators must have a written qualification program by April 27, 2001. The

program must be available for review by the Administrator or by a state agency

participating under 49 U.S.C. 601 if the program is under the authority of the state

agency.

4

AttachmeriL B Page 5 of 67

(b) Operators must complete the qualification of individuals performing covered tasks

by October 28, 2002.

(c) Work performance history review may be used as a sole evaluation method for

individuals who were performing covered task prior to October 26, 1999.

(d) After October 28, 2002, work performance history may not be used as the sole

evaluation method. -

(e) After December 16, 2004, observation of on-the-job performance may not be

used as the sole method of evaluation.

[Amdt 192-86 64 FR 46853, Aug 27, 1999; Amdt. 192-90, 66 FR 43523, Aug. 20, 2001; Amdt 192-

100, 70 FR 10332 Feb 25, 2005]

5


Introduction

Columbia Gas in tends to improve pipeline safety by ensuring a qualified workforce and that its operations comply with relevant Federal Pipeline Safety Regulations.

In accordance with pipeline safety regulations defined in 49 CFR part 192, Subpart N, the

U.S. Department of Transportation, through its Research and Special Programs

Administration (RSPA) [now known as Pipeline and Hazardous Materials Safety

Administration (PHMSA)], adopted regulations requiring that all individuals who operate

and maintain pipeline facilities "be qualified to operate and maintain the pipeline facilities" and have "the ability to recognize and react appropriately to abnormal operating conditions that may indicate a dangerous situation or a condition exceeding

design limits". To ensure its compliance with these regulations, Columbia Gas has adopted this DOT Operator Qualification (OQ) Plan (the Plan). Columbia Gas intends to

make its employees, and other individuals who may perform tasks covered under the

regulations setforth in Subpart Non behalf of Columbia Gas, aware of the regulatory

requirements and the contents of this Plan.

This Plan and its Exhibits provide guidance for

• Identifying relevant operating and maintenance tasks (Covered Tasks);

• Achieving and maintaining compliance with the requirements of Subpart N and;

• Establishing and maintaining qualifications to perform Covered Tasks

on a Columbia Gas pipeline facility.

Atlachment B Page 7 of 67

Scope

This written Operator Qualification plan applies to all Columbia Gas employees,

contractors and mutual aid individuals who perform covered tasks on behalf of Columbia. It is adopted to comply with 49 CFR Part 192, Subpart N. This plan replaces in its entirety, any prior written operator qualification plans established for Columbia Gas

of Kentucky, Columbia Gas of Maryland, Columbia Gas of Ohio2, Columbia Gas of Pennsylvania and Columbia Gas of Virginia.

This written Operator Qualification plan shall become effective Apr11 28, 2004; the initial

Columbia Gas state-specific written Operator Qualification plans shall be archived for a

period of not less than five years from the effective date of this plan. The initial,

established written Operator Qualification plans shall be available upon request until

April 29, 2009. The effective dote of this plan for Columbia Gas of Virginia is February

01, 2005. The initial Virginia established written Operator Qualification plan shall be

available upon request until February 02, 2010.

Program Performance and Improvement Columbia Gas continues to seek program performance improvements through participation in Federal and State OQ seminars, public meetings, presentations and

special OQ committee involvement. Compliance and Technology (C&T) and Technical

Training remains actively engaged in meetings and presentations with Columbia Gas and

Contractor individuals. The meetings and presentations are made up of management,

supervision and field employees, from both Columbia Gas and contract companies. Columbia Gas has established a validated qualification curriculum. Part of the validation

of this process is allowing affected individuals the opportunity to offer suggestions and

comments.

Columbia Gas envisions its Operator Qualification program as a living document. We

are dedicated to perpetually seeldag, and adopting as appropriate, program

performance improvements.

2 The date of the original Columbia Gas of Ohio OQ plan was 4-27-2001 7


Definitions

Ability- means the capacity to do or act, physically and/or mentally.

Abnormal Operating Condition (AOC)- means a condition identified by Columbia Gas that may

indicate a malfunction of a component or a deviation from normal operations that may: (a) indicate an

operating condition exceeding design limits; or (b) result in hazard(s) to persons, property, or the

environment.

Activity- A specific deed, action, function, or sphere of action.

Affects the Operation or Integrity of the Pipeline- Any activity, or omission of an activity, that could

directly or indirectly result in a hazard to persons, property or the environment. As used in the safety

context of the OQ rule, the phrase indicates activities that could result in an AOC that in turn could

result in an unsafe operating condition.

Alarm - an audible or visible means of indicating to the controller that equipment or processes are

outside operator defined, safety-related parameters.

Alerts - an audible or visible means of indicating to the controller that equipment or processes are

outside normal operating parameters

Communicate- To convey information about; make known; to reveal clearly.

Compliance- Activity(ies) in accordance with the rule.

Contributed- Determined to be a factor.

Contributed to- A judgment by designated Columbia Gas personnel, that the action or inaction of an

individual(s) was a factor in the occurrence of an incident/accident.

Control Room - an operations center staffed by personnel charged with the responsibility for remotely

monitoring and controlling a pipeline facility.

Controller—a qualified individual who remotely monitors and controls the safety-related operations of

a pipeline facility via a SCADA system from a control room, and who has operational authority and

accountability for the remote operational functions of the pipeline facility.

Covered Task- is an activity, identified by Columbia Gas, that: (1) is performed on a Columbia Gas

pipeline facility; (2) is an operations or maintenance task, (3) is performed as a requirement of this part

(Part 192); and (4) affects the operation and integrity of the pipeline

Criterion- A standard upon which a judgment is based.

Current- Belonging to the present time; now in progress.

Demonstrate- Provide tangible evidence.

Determine- To conclude after consideration, investigation, or calculation.

Direct- To take authoritative charge of or supervise; to control, order or command.

Direct Observation- Observation of an unqualified individual(s) during the performance of a covered

task by a qualified person,(in that task). Such qualified person must be able to take immediate and

effective corrective action if incorrect procedures or AOCs are observed.

Document- Retrievable record.

Evaluator- Persons performing evaluations should possess the required knowledge (1) to ascertain an

individual's ability to perform the covered task(s), and (2) to substantiate an individual's ability to

N.


recognize and react to AOCs that might surface while performing those activities. This does not mean

that the person performing the evaluations should be physically able to perform the covered task(s)

themselves.

Evaluation- means the process set forth in this Plan to assess and document an Individual's ability to

perform a Covered Task(s) by any or all, as appropriate, of the following;

u Written examination,

u Oral examination,

• Work performance history review - shall not be the sole method of evaluation,

• Observation during:

1. Performance on-the-job (shall not be the sole method of evaluation)

2. On-the-job training

3. Simulations; or

ci Other forms of assessment.

Excavation within a Pipeline Facility- Qualification for this covered task does not require Columbia

Gas employee(s) or contractor employee(s) to be proficient in the operation of excavation equipment.

Covered tasks requiring qualification shall include: *Verification of line location and depth, *On e Call

and underground facility owner/operator notifications, *Sloping / Shoring, *Water removal, and *l ns pection. Third party excavations that take place on Columbia Gas pipeline facilities shall be handled

in accordance with Columbia Gas's damage prevention program requirements.

Identify- To establish the identity of; to ascertain the origin, nature, or definitive characteristics of.

Immediate Corrective Action- Taking steps to correct mistakes or abnormal or hazardous conditions

without delay.

Individual- means an employee of Columbia Gas or an employee of an affiliated or unaffiliated entity

who, on behalf of Columbia Gas, performs one or more Covered Tasks on a Columbia Gas pipeline

facility.

Integrity- The ability of a pipeline to operate safely and to withstand the stresses imposed during

operations.

Interval- The amount of time between two specified instants, or events.

Knowledge- Understanding gained through experience or study.

Knowledge, Skills, and Abilities (KSA)- An appropriate combination of information, craftsmanship,

and proficiency that allows an individual to perform covered task(s) in a competent manner.

Maintain- To keep in a condition of good repair or efficiency.

Maintenance- The act of maintaining orthe state of being maintained; the work of keeping something

in proper condition; upkeep.

Observe- The act of watching; to watch or perceive. For purposes of conducting qualification

evaluations using on-the-job (OJT) performance, observations must include the interaction of the

evaluator and qualification candidate to ensure that the candidate's knowledge of the procedures (and

the reasons for the key steps therein) is adequate to ensure the continued safe performance of the task.

Written documentation of the evaluation materials, i.e. task requirement key steps and AOCs are

utilized during observation to ensure consistent evaluations are administered across Columbia Gas

Operate- Starting, stopping and/or monitoring a device or system.

Altachnient B Page 10 of 67

Operation- Actions taken to facilitate storage or movement of product through a regulated pipeline.

Operator- As defined in 192.3 and 195.2, means a person who engages in the transportation of gas.

May also be referred to as Owner when used within NiSource contracts.

Perform- To begin and carry through to completion; to demonstrate in accordance with the

requirements of; to accomplish (a covered task) in the proper, customary or established manner.

Person- A5 defined in 192.3 and 195.2, means any individual, firm, joint venture, partnership,

corporation, association, State, municipality, cooperative association, or joint stock association, and

includes and trustee, receiver, assignee, or personal representative thereof.

Pipeline-As defined in 192.3 and 195.2, means all parts of those physical facilities through which gas

moves in transportation, including pipe, valves, and other appurtenance attached to pipe, compressor

units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies.

Pipeline facility- means new and existing pipelines, rights-of-way, and any equipment, facility or

building owned by Columbia Gas and directly connected to and used in the transportation of gas or in

the treatment of gas during the course of transportation.

Prior- Preceding in time or order.

Process- A systematic series of actions directed to some end.

Program- A written description of processes to be followed; a clear delineation of authorities and

responsibilities there under and the specific results expected to be achieved for the implementing

organization.

Protocol- A standard methodology used to conduct inspections of regulated entities to determine

conformance to specific requirements prescribed by regulation.

Provision- The written description of the element(s) or approach employed by Columbia Gas to satisfy

the requirements of the OQ rule in 49 CFR Part 192 Sub-Part N.

Pursuant- In accordance with or as a follow-up.

Qualified Individual- means an Individual who has been evaluated and can (a) perform assignec

covered tasks, observe & direct non-qualified individuals and (b) recognize and react to Abnormal

Operating Conditions.

Records- Recorded information or data on a particular subject (OQ), collected and preserved to

demonstrate compliance with the OU rule.

Retain- To keep possession of, in a retrievable and useable condition.

Skill - A demonstrable competency to perform a given task well, arising from talent, training or practice.

Subject Matter Expert (SME) - An individual recognized by Columbia Gas as having a special skill or

specialized knowledge of a process in a particular field, or of a piece of equipment.

Supervisory Control and Data Acquisition (SCADA) - means a computer based system or systems

used by a controller in a control room that collects and displays information about a pipeline facility and

may have the ability to send commands back to the pipeline facility.

Standard- A written document, which is commonly used and accepted as a basis for judging

acceptability of performance in the areas addressed.

Task - A piece of work assigned to or expected of an individual(s).

10

Attachment B Page 11 of67

Training - An educational or instructional process (e.g., classroom, computer-based, or on-the-job) by

which an individual's KSA level is improved. While not currently required by the 00 rule, training is

nonetheless fundamental to implementing many of the 00 Rule's requirements.

Written - To set down in writing many of various ways.

11

AUacliment B Page 12 of 67

Covered Tasks (192.805 (a))

Columbia Gas conducts job task analysis of activities performed on its Pipeline facilities. It then applies the following four-part test (as set

forth in 49 CFR 192.801) to each of the identified activities to

determine which activities are Covered Tasks:

1. Is the task performed on a pipeline facility;

2. Is the task an operations or maintenance task;

3. is the task performed as a requirement of 49 CFR Part 192; and

4. Does the task affect the operation or integrity of the pipeline.

Columbia Gas analyzes data gathered during the four-part test and job task analysis to develop a

covered task list customized to match Columbia Gas, operating standards.

Process for analyzing data while establishing and maintaining Columbia Gas's

identified Covered Task list.

Process to establish Columbia Gas's identified Covered Task list.

C&T personnel, Technical Training, Engineering, Commercial Operations, and Operations Subject Matter

Experts (SMEs) gather and analyze data while applying the four-part test as set forth in 192.801. The

data analyzed is gathered from Federal, State and local regulatory requirements, Columbia Gas operating standards, and manufacturer and vendor instructions. C&T, along with Technical Training,

utilize the findings from this data analysis when determining and justifying the Columbia Gas identified

Covered Task list.

Process to maintain Columbia Gas's Identified Covered Task list

C&T and Technical Training are responsible for identifying:

• New State and/or Federal regulatory requirements affecting Columbia Gas's operating

standards and/or identified covered tasks.

• Revised State and/or Federal regulatory requirements affecting Columbia Gas's operating


• New or revised gas standards (policy and procedures) affecting identified covered task(s).

• Approved and adopted new equipment and/or technology affecting Columbia Gas's operating


• New or revised information from equipment or product manufactures affecting Columbia Gas's

operating standards and/or identified covered tasks.

12

Attachment B Page 13 0167

Process for disseminating and reviewing new and/or revised information

. C&T will identify the Columbia Gas operating standard(s) affected by the change.

• C&T will send out an electronic advisory detailing the new or revised information to Technical

Training and Operations SMEs for review and comment.

• C&T will analyze the affect the change(s) will have on existing identified Covered Task(s) or

determine if a new identified Covered Task(s) is required. If C&T determines the change affects

a covered task(s), Section F of this plan will be followed.

C&T working with Technical Training, Commercial Operations, and Operations SMEs will facilitate the

necessary changes to Columbia Gas's operating standards to reflect the new or revised information.

Technical Training will assess the effect the changes will have on the task(s) and make adjustments to

the evaluation and qualification process as necessary.

Attached to this Plan, as Exhibit A, is the list of identified Covered Tasks.

13

Attachriient B Page 14of67

Evaluation of Qualifications (192.805 (b))

An Individual's qualification to perform a Covered Task will be evaluated using appropriate evaluation methods identified in this Plan.

Evaluator Criteria Persons with responsibility for evaluating an Individual's qualifications to perform Covered Tasks will

have the required knowledge, through training or experience, to ascertain that Individual's ability:

(1) To perform Covered Tasks

(2) To recognize and react to Abnormal Operating Conditions that might arise or be observed

while performing identified tasks.

Evaluation Methods Evaluation methods and qualification criteria applied to a Covered Task will vary from task to task. The

evaluation method(s) chosen for any specific Covered Task will include one or more of the following, as

appropriate:

. Written examination

• Oral examination

• Work performance history review (shall not be the sole method of evaluation; 192,809 c, d)

• Observation during:

a. Performance on the job (shall not be the sole method of evaluation; 192.809 e.)

b. On-the-job training (OJT), (shall not be the sole method of evaluation; ADB-09-03) or

c. Simulation;

. Other forms of assessment.

Evaluation Categories

Transitional qualification - The qualification of Individuals: (1) who performed one or more Covered

Tasks on a regular basis prior to August 27, 1999 and (2) who qualify to perform those same Covered

Tasks, according to this Plan, priorto October 28, 2002. It is only during the transitional period of qualification that Columbia Gas may use work history

performance review as the sole evaluation method.

Initial qualification - The qualification of Individuals who did not perform a particular Covered Task on

a regular basis prior to August 27, 1999.

14

Attachment 13 Page 15 of 67

Subsequent qualification - The evaluation of an Individual's qualification to perform one or more Covered Tasks, after the Individual's transitional or initial qualification to perform the same Covered Tasks, at intervals established by Columbia Gas. The subsequent qualification process may utilize different evaluation criteria than were used for transitional or initial qualification, and subsequent qualification in no event must occur until after October 28, 2002.

The following criteria will be applied to each Covered Task to determine the appropriate

evaluation methodology applied to that task:

1. Frequency of performance

2. Critical nature of the covered task with respect to operation

3. Complexity! Difficulty

4. Existence of checks and balances, such as, Reviews and/or audits

5. Statutory requirements

15


Non-Qualified Individuals (192.805 (c))

Columbia Gas permits non-qualified Individuals to perform Covered Tasks under certain

circumstances, including but not limited to, the non-qualified Individual's participation in

on-the-job training or when working as part of a crew. l4owever, under all drcumstances when using non-qualified individuals, the following conditions shall be met:

In compliance with statutory requirements, non-qualified individuals shall not under

any circumstances perform the following identified covered tasks:

El Welding Pipelines

E2 Performing nondestructive Testing on Steel Pipelines & Welds

Fl Joining Plastic Pipe - Manual & Hydraulic

Fla Joining Plastic Pipe - Manual Only

Li Tapping & Stopping Pipelines - all Sizes & Pressures

ha Tapping & Stopping Pipelines -4" & smaller tap holes; 60 PSIG & less)

lib Tapping & Stopping Pipelines Self Punch Tees / LP Tapping and Bagging

Lic Tapping & Stopping Pipelines - Self Punch Tees

Non-qualified individuals may perform other covered task(s) if all of the following

conditions exist:

• A qualified Individual is assigned to direct and observe non-qualified individual(s) during the

performance of a Covered Task.

• A qualified Individual is able to communicate effectively with the non-qualified individual and

take immediate corrective actions when necessary.

• The qualified individual is responsible for the performance of the Covered Task.

• The ratio of non-qualified individuals to a qualified Individual is kept to a safe and controllable

minimum.

16

Attachment B Page 17of67

Performance Contributing to an Incident (192 .805 (d))

If there is reason to believe that an Individual's performance of a Covered Task contributed to an incident, as defined under 49 CFR Part 191, as amended, Columbia Gas will initiate an evaluation of that Individual's qualification to perform that Covered Task.

Process to determine whether an Individual needs to be evaluated

In the event of an incident that occurred as a result of, or possibly due in part to, the performance of a

Covered Task(s), an investigation performed by the appropriate departments (Field Operations

Management, Senior Management, Legal, C&T, and Technical Training, Commercial Operations) will be completed to determine cause and effect. Subject matter experts may be called upon to assist with the

Investigation, as appropriate.

• During the investigation the individual(s) shall not further perform the Identified Covered

Task(s) that may have contributed to the incident. If, in the course of that investigation,

Columbia Gas concludes that there is reason to believe that the Individual's performance of the

Covered Task(s) contributed to the incident, that Individual's qualification to perform that

Covered Task(s) shall be evaluated.

• The individual shall not perform the Covered Task(s) unsupervised until the evaluation is

completed and any necessary re-qualification(s) steps have been completed.

• The evaluator(s) will evaluate the Individual in accordance with this Plan.

17

Attachment B Page 180167

Reasonable Cause to Verify Qualification (192.805 (e))

Columbia Gas will evaluate an Individual if there is reason to believe that the Individual is no longer qualified to perform a Covered Task. Concerns regarding an Individual's ability to perform a Covered Task may be prompted by a number of circumstances and reported

to Columbia Gas by any person.

Possible reasons to verify an Individual's qualification(s) include, but are not limited

to:

• Absenteeism.

• Obvious loss of motor skills, vision impairment, etc.

• Statements made by the individual as to the Covered Task(s) or the individual's own

qualification to perform the Covered Task(s).

• Prolonged period of non-performance of Covered Task(s).

• Unsatisfactory performance.

• Columbia Gas has received concerns, negative comments or complaints regarding the

individual's performance of a covered task(s).

If reasonable cause is determined to exist, the following process to determine

whether an Individual needs to be evaluated will be followed.

1. C&T and Technical Training, working with Field Operations Management and/or Commercial

Operations, will initiate an investigation to determine if reasonable cause exists to evaluate an

Individual's qualification to perform the Covered Task(s) in question.

If there is reason to believe that the Individual is no longer qualified to perform a Covered

Task(s), that Individual's qualification to perform that task(s) shall be revoked. The individual's

performance of that Covered Task(s) will be evaluated.

3. The evaluator(s) will evaluate the Individual in accordance with this Plan.

18

ALlachment B Page 19of67

Communicate Changes (192.805 (f))

Columbia Gas will communkatesignjficantthanges that affect a Co vered Task to the Individuals who pe,jbmi that Co vered Task A thange maybe signjficant enough to require changes to the qua! jIlcation

process or additional evaluc,tions.

These changes may include but are not limited to:

• Significant modifications to company policies or procedures.

• Significant changes in state or federal regulations.

• Use of new equipment and/or technology that significantly affects Covered Tasks.

• New information from equipment or product manufacturers that significantly affects Covered Tasks.

Responsibility for Communication of Changes affecting Covered Tasks

C&T, Commercial Operations and Technical Training is responsible for identifying substantive changes affecting an identified task(s).

Technical Training is responsible for revising the evaluation process to include the impact of such changes. C&T will make a determination as to the level of communication regarding the change that is required.

C&T will disseminate the information utilizing the Notification of Change Form (Exhibit F) to all appropriate Managers and Supervisors.

Managers and Supervisors will follow the directions identified on the Notification of Change Form. Depending on the level of change, when required, Managers and Supervisors shall conduct an informational meeting providing the information to all affected employees.

Contractors affected by the change shall be required to conduct employee meetings utilizing the Notification of Change Form. The contractor will be required to submit a copy of the Form back to Columbia Gas with employees' signatures.

19


Action for Communication of change

• C&T, Commercial Operations and Technical Training will evaluate information regarding changes

that may affect an identified covered task(s).

• When appropriate, C&T will establish a team of subject matter experts to evaluate if the

Covered Task(s) in question is significantly affected by internal or external changes.

Technical Training and/or Commercial Operations will assess the effect the changes will have on

the task(s) and make adjustments to the evaluation and qualification process as necessary.

These adjustments could involve anything from informing qualified individuals of the changes to

requiring complete re-evaluation.

Determining the need to communicate

The need to communicate will vary dependent upon the impact of the change on the Covered Task.

Columbia Gas has established a 3-tiered system for identifying and communicating change.

Level (1) - Limited to no impact on the Covered Task and requires no communication or further

action.

Level (2) - Moderate impact on the Covered Task and requires only communication of the change.

Level (3) - Significant impact on the Covered Task and requires communication and modification of

the qualification process. Requires training/qualification, as appropriate, for affected

Columbia Gas employees and contractor personnel.

Attached to this Plan, as Exhibit F, is the Notification of Change Form.

20


Subsequent Qualification Intervals (192.805 (g))

Information gathered from attending Federal and State regulatory Operator Qualification seminars, OQ presentations and OQ public meetings combined with participation in industry recognized gas associations is reviewed to identify Covered Task qualification intervals. Columbia Gas utilizes the information compiled from these sources and considers them while establishing covered task qualification intervals.

An individual's qualifications shall remain valid until the end of the calendaryear in which the subsequent

qualification is required. Statutory qualification requirements will take precedent and be adhered to by

Columbia Gas.

The following criteria will be applied to each Covered Task to determine the appropriate subsequent

qualification interval applied to that task:

1. Frequency of performance

2. Critical nature of the covered task with respectto operations

3. Complexity / Difficulty

4. Existence of checks and balances, such as: Reviews and/or audits

S. Statutory requirements

Attached to this plan, as Exhibit B, is a list of subsequent qualification intervals and the

Justification Matrix.

21

Allacli merit B Page 22 of 67

Training: Knowledge, Skills and Abilities (192.805 (h))

Columbia Gas ensures that training is administered for each individual performing Covered Tasks. Appropriate training will be administered to ensure the safe operation of Columbia Gas pipeline facilities. Columbia Gas ensures training includes the knowledge, skills and abilities to safely perform the Covered Task(s).

Training for Operator Qualification requirements

Examples requiring training include but are not limited to:

1. New hires (OJT and classroom)

2. Individuals taking on new Covered Task(s) (New position or Expanded responsibilities)

3. Individuals who fail one or more qualification evaluations (Ref. Exhibit E)

4. Level (3) Change to a Covered Task(s) (Ref. Section F)

Process for administering training

Process for Newly hired individuals

Newly hired individuals will have a Core Developmental Covered Task List assigned to their Development

Plan (Dev Plan) based on the assignment profile for the position they are filling. New hires will

work/train within the requirements of Non-Qualified Individuals (Section C of this plan) while

completing their OJT.

New hires completing OJT will also receive classroom training developed specifically for each Covered

Task identified in the new hire's Core Developmental Covered Task List. New hire individuals will

attempt to successfully complete certification in OQ task(s) as administered by Technical Training. Technical Training will decide if individuals possess the knowledge, skills and abilities to safely perform

the identified Covered Task(s).

Process for individuals taking on new Covered Task(s)

Individuals taking on new Covered Task(s) will have their Dev Plan reviewed and updated by Technical

Training to reflect the addition of the new Covered Task(s). These Individuals will follow the process for

newly hired individuals for any new Covered Task(s).

22

Attachment Page 23 0167

Process for Individuals who fail to qualify/re-qualify

A minimum score of 80% is considered a passing score for all covered task evaluations. Individuals who

fail one or more qualification evaluation will receive training as appropriate as outlined in Exhibit E of

this plan.

Process for Individuals affected by change

Level3 change(s) are when a significant change(s) has occurred affecting a Covered Task(s), which

requires communication, training and qualification as appropriate. The need for training will be

determined as outlined in Section F, Action for Communication of Change and Determining the Need

to Communicate. C&T and Technical Training will assess the effect the change(s) will have on the task(s)

and make adjustments to the evaluation and qualification process as necessary. Technical Training will

update the existing training program(s) affected to reflect the change(s). Individuals qualified in Covered

Task(s) affected by the change(s) will receive training as appropriate to ensure they possess the

knowledge, skills and abilities to perform the task(s) in a safe manner.

Records

Records are maintained in the NiSource Learning Management System (LMS).

23


Modification to Operator Qualification Plan (192.805 (i))

Columbia Gas will notify the Administrator or State agencies of significant modification to Columbia Gas's Operator Qualification program.

Process for determining significant modifications

C&T will administrator the Columbia Gas Operator Qualification program. As modifications to the Columbia Gas program are required C&T will be responsible for assessing the significance of the

modification. C&T will assemble a team made up of individuals from each state in which Columbia Gas

has distribution facilities. The team will analyze the modification to the program and determine if it is

significant in nature warranting communication to State and/or Federal agencies that have audited the

program.

Process for communicating significant modifications

When a modification to the program is determined to be significant C&T will complete a Notification of

Change Form (Exhibit F) outlining the modification. Compliance Specialists from C&T will communicate

the modification to each state agency utilizing the Notification of Change process.

24


Record Keeping Methods (192.807)

Columbia Gas will ensure that the record of an Individual's qualification to perform a Covered Task will be maintained at a central location, or at multiple locations, in one or more of the following formats:

• Electronically

• Paper copies

• Other formats as appropriate and available

Columbia.Gas and contractor qualification records will include the following information.

(1) Identification of the Covered Task(s).

(2) Identification of the evaluator.

(3) Evaluation method(s) used.

(4) Identification of the Individual being qualified.

(5) Date on which qualification was completed & date on which qualification will expire.

Qualification records will be maintained throughout the period of time that an Individual is qualified to

perform a Covered Task(s). Records of an Individual's prior Covered Task qualifications and the

qualification records of Individuals who are no longer performing specific Covered Task(s) will be

maintained for a period of at least five (5) years from the date a task was last performed. . Employee

records will be maintained in the NiSource LMS system. Contractors performing covered task(s) on

Columbia Gas facilities shall be required to comply with record keeping methods in a manner that

complies with 192.807 and in a manner acceptable to Columbia.

Individuals responsible for project oversight involving the performance of any covered task(s) by a

contractor shall assure contract em ployee OQ records are current for the task(s) to be performed.

Columbia Gas will keep copies of contractor records at designated state business units

25

ABachment Page 26 0167

Contractors, Mutual Aid, Mergers and Acquisitions

Contractors

Verifying Qualification of Contractor Personnel

Prior to commencement of any work on a Columbia Gas pipeline facility, contractors whose

employees perform any identified covered task must initially submit their 00 plan to Columbia

Gas for review and approval and then continually update any changes in their 00 program or

qualification status of their employees to Columbia Gas.

Exhibit C explains the requirements that contractors are required to meet. Exhibit D can be used

to assist in conducting the analysis to verify qualifications for contractor personnel.

Mutual Aid Agreements

Verifying Qualification of Other Operator Personnel

Prior to commencement of any work on a Columbia Gas pipeline facility, non-Columbia Gas

operators whose employees or subcontractors perform any identified covered task must initially

submit their 00 program to Columbia Gas for review and approval and then continually update

any changes in their 00 program or qualification status of their employees and subcontractors

to Columbia Gas. The operator's OQ Plan must meet or exceed the requirements of Columbia

Gas' 00 Plan for those covered tasks performed by the operator on Columbia Gas' facilities

Emergencies and/or Major Natural Disasters

The occurrence of major natural disasters or other emergencies may necessitate the mutual aid

assistance of individuals other than, or in addition to, Columbia Gas employees, contractors and

other operator personnel. Specifically, Columbia Gas may require emergency assistance in the

performance of covered tasks from employees or subcontractors of another operator or

contract company whose qualifications have not previously been reviewed, under circumstances

that do not permit a thorough review of the 00 program or qualification status of such operator

or contract company prior to the commencement of the emergency assistance.

In order to facilitate such mutual aid assistance in a timely manner without violating 49 CFR 192,

Subpart N, as well as applicable state regulations.

Columbia Gas shall verbally confirm that: (1) the operator or contract company has appropriate

OQ certifications for the scope of work to be performed; and (2) individuals to be assigned to

perform such work have appropriate 00 certifications for the scope of work to be performed.

26

AUachment B Page 27 of 67

Such verbal confirmation shall be obtained at the time that the emergency mutual aid assistance

i5 requested when mutual aid agreements have not previously been established. Columbia Gas

will perform a thorough review and confirm the qualifications of such operator or contract

company as well as associated individuals assigned to perform such work as soon as practical

following the commencement of such emergency mutual aid assistance.

Mergers and Acquisitions

In the event the Columbia Distribution Companies are involved in a merger or acquisition, C&T personnel, Technical Training, Engineering and Commercial Operations, working collaboratively, will conduct a review to ensure compliance of the rule as well as the specifications set forth in this plan.

Exhibit D can be used to assist in conducting the analysis of OQ tasks for mutual aid, mergers and

acquisitions.

27

Attachment 8 Pane 28 of 67

Management of Change This plan undergoes an annual review. This section of the plan captures the changes, if any, that are made during that review or any time throughout the year. The MOC Proposed Change Form (Exhibit G) is to be used to submit suggested

changes/revisions.

Summary of changes Date of

Reason Location Description change

2007 Annual review Entire

document December Annual review

Entire Changed font and cleaned up formatting 2008 document throughout document

Entire Minor editorial changes - Updated RCT

document references to the department(s) responsible for those roles today. Added provisions for non-qualified

Section C individual(s) who speak and comprehend languages other than English.

Section K & New addition the CDC Plan July 2009 Annual review Exhibit G

Expounded on the description of some of Exhibit A the tasks so a broader audience would

understand what the task contains.

Exhibit C Streamlines the table on page 43 and flowchart on page 44.

June 2010 Update Exhibit A, B & C Updated to include the new G2 & G3 covered tasks

Entire Incorporated Energy Supply Services were document applicable

Moved management of change from

Section K Section K to L and made Section K

2010 Annual Contractors, Mutual Aid, Mergers & review and ______________ Acquisitions (previously Exhibit D)

March 2011 Legacy P/P

Section L conversion to Management of change section

Exhibit A Updated to include new Gas Standards new gas standards

Exhibit C Updated to reflect new CGV contractor requirements.

Exhibit 0 Updated the gap analysis form and moved it from Exhibit C to Exhibit D. Updated ESS to Commercial Operations

June 2011 Update Entire and Columbia Energy Distribution Group to Document Columbia Gas.

28


ee en.

Update Exhibit C Reinstated the exemption in Exhibit C that was removed on the 4-1-11 update.

June 2011 ____________ Update Section K

Additional explanation to better facilitate the use of mutual aid.

Section C Updated tasks and descriptions not

August 2011 Update permitted under direct observation

Exhibit A, B, D Updated covered task list and descriptions including new tasks.

Sections H & J Updated to include references around record keeping.

Exhibit A, B, 0 Added new tasks Dl and E3 November Annual

Exhibit C Updated 31d party provider listing. 2011 Review

Exhibit F Updated Form to reflect current practice.

Update Scope Inserted Ohio plan date footnote.

January 2012 Update Section H Added language around passing score for 00 evaluations.

Update Exhibit A & B Updated interval language.

29


Exhibit A Columbia Gas Covered Task List Qualification methods:K=Knowdge only

K/S = Knowledge & Skill Qualification

Method DOT Legacy PIP Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent

Al Operating/Maintaining Propane Air Facilities NFPA58& 59 Statut:ry

GS 1708.050, GS 2950.900, 651-12, 680-1, K/s K/S

Ala Operating Propane Air Facilities NFPA5B& 59 Statut:ry

GS 1708.050, GS 2950.900, 651-12, 680-1, K/S K/s

Compressor Stations Dl This isa piace holder only; Columbia 5as of Pennsylvania owns the

BLackhawk Compressor Station whith is operated end maintained by NiSource GasTrausmiasion & Storage (NGT&S)

Welding Pipelines API-1104

Statutory Welding Manual 535-4, 641-2,

El —~ TO BE PERFORMED BY QUALIFIED INDIVIDUAL

192.225 6 mo arc Welding Manual (VA)

641-3 641-4

ONLY — DIRECT OBSERVATION NOT 192235

1 year GS 1430.320, 65 1730.010, 641 5 641 6

- ' -

K S K S

PERMITTED! 2 years GS 2420.010, 641-7

192:245

Ela Visual Inspection of Welds 192.241 3 years 641-6 K/S K/S Welding ual

Perform Nondestructive Tests on steel Pipelines E2 192.243 3 years 1210.010 641-6 K/S K/S

192.309 E3 Repair of Steel Pipelines by Grinding 192.713 1 year GS 1730.010, GS 3010.010 K K

192.715

640-3, 643-3, Joining Plastic Pipe - Manual & Hydraulic 192.273 JM 1301, JM 1302 6434, 643-5,

Fl —+ TO BE PERFORMED BY QUALIFIED INDIVIDUAL 192.281 1 year5

JM 1304, JM 1306 643-10, 643-12, K S K S

ONLY— DIRECT OBSERVATION NOT 192.285 JM 1308, JM 1310 644-2, 644-3, PERMITTED! 192.287 JM 1320 644-4, 644-9,

644-12,

Twelve (12) months date specific for Columbia Gas of Virginia, Columbia Gas of Kentucky, Columbia Gas of Maryland, and Columbia Gas ofPennsylvania. Twelve (12) months not to exceed fifleen (15) months for Columbia Gas of Ohio.

30


Exhibit A Columbia Gas Covered Task List Qualification methods: K=Knowdge only

K!S = Knowledge & Skill Qualification

Method DOT Legacy P/P Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent 640-3, 643-3,

Joining Plastic Pipe - Manual Only 192.285 JM 1301, JM 1302 643-4, 643-5,

a —p TO BE PERFORMED BY QUALIFIED INDIVIDUAL 192.281 JM1304, JM 1306 643-10, 643-12, ONLY - DiRECT OBSERVATION NOT 192.287 1 year4 JM 1308, JM 1310 644-2, 644-3,

K S K S

PERMITTEDI 192.273 JM 1320 644-4, 644-9, 644-12,

192.273 192.281 640-3, 643-3,

F2 Joining Pipe with Mechanical Fittings 192.285

1 year5 .IM 1320, 643-4 643-5, K/S K/S

192.287 1

- ' - 192.273 640-3, 643-3,

F3 Joining and Repairing Polyvinyl Chloride Pipe 1 year6 JM 1320, GS 1714.020 K/S K/S 643-10,64342,

192.287 651-6, 192.614 GS 1100.010, GS 3010040, 192.317 GS 3010.050, GS 3010.080, 535-4, 640-1,

Gi Excavation and Backfilling 192.319 3 years GS 3010.090, GS 3010.100, .640-2, 659-2, K K 192.325 65 3010.102, 653010.104, 445-3, 192.327 65 3010.106, HSE 4100.040

4 Twelve (12) months date specific for Columbia Gas of Virginia, Columbia Gas of Kentucky, Columbia Gas of Maryland, and Columbia Gas of Pennsylvania. Twelve (12) months not to exceed fifteen (15) months for Columbia Gas of Ohio.

Twelve (12) months date specific for Columbia Gas of Virginia, Columbia Gas of Kentucky, Columbia Gas of Maiyland, and Columbia Gas of Pennsylvania. Twelve (12) months not to exceed fifteen (15) months for Columbia Gas of Ohio. 6 Twelve (12) months date specific for Columbia Gas of Virginia, Columbia Gas of Kentucky, Columbia Gas of Maryland, and Columbia Gas of Pennsylvania. Twelve (12) months not to exceed fifteen (15) months for Columbia Gas of Ohio.

31


Exhibit A Qualification methods: K = Knowledge only Columbia Gas Covered Task List = Skill only

KIS = Knowledge & Skill . . . . . . . Qualification.

Method DOT . Legacy P/P . Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent 192.307 192.317 192321 GS 1100.050, GS 3010.080.

G2 Horizontal Directional Drilling 192.325 3 years CS 3010.090, GS 3010.100, 640-1, 640-2 K K 192.327 CS 3010.102, GS 3010.104, 192.361 192.614 192.307 192.317 192.321 192. 323

G5 1100050 GS 3010.080, G3 Other Boring Methods

192.325 3 years GS 3010.090, CS 3010.100, 640-1, 640-2 K K

192.327 GS 3010.104, CS 3010.106,

192.361 192.614 192.353 192.355

Installing / Replacing / Repairing Meter & 192.357 CS 1420.5 30, CS 3020.020, 640-2, 653-4, 700-3, 724-5, Hi

Regulator Sets 192.359 3 years CS 3020.090, GS 6400.420,

724-42, 724-44, K/S K/S

192.363 GS 6400.440 192.365 192.467

32



K/S= Knowledge & Skill Qualification


Task Description References Intervat Gas Standard (GS) references Initial sequent

GS 1100.050, GS 1420.4 10, 192.287 GS 1680.020, GS 1680.040, 192.307 GS 1680.050, GS 1714.020, 192.321 GS 1730.010, GS 3000.020, 192.361 GS 3010.010, GS 3010.020,

Installing / Replacing / Repairing Gas Service 192. 365

3 years GS 3010.040, GS 3010.050,

535-4, 640-1, 640-2, 640-3, HZ

lines 192.367 GS 301.0.060, GS 3010.070, K/s K/S 192.369 GS 3010.080, GS 3010.090,

640-10, 651-6,

192.375 GS 3010.100, GS 3010.102, 445-3

192.379 GS 3010.104, GS 3010.106, 192.381 GS 3020.0 10, GS 3020.020, 192.703 GS 3020.030, GS 3020.050,

GS 3020.090,

192.287 192.307 GS 1100.050, GS 1420.410, 192.317 GS 1680.020, GS 1680.050 192.319 GS 1714.020, GS 1720.010 192.325 GS 3000.020, GS 3010.010, 192.327 GS 3010.020, GS 3010.040,

H2a Visual Inspection of Gas Lines 192.353 3 years GS 3010.050, GS 3010.060, 535-5, 640-1, 640-2, 640-3, K/S K/S 192.355 GS 3010.070, GS 3010.080,

192.361 GS 3010.090, GS 3010.100, 651-6, 445-3

192.365 GS 3010.102, GS 3010.104, 192.367 GS 3010.106, GS 3020.010, 192.369 GS 3020.020, GS 3020.030, 192.461 GS 3020.050, GS 302 0.090, 192.611

33


Exhibit A Columbia Gas Covered Task List Qualification methods;K=Knowdge only

KIS = Knowledge & Skill Qualification


Task Description References Interval Gas, Standard (GS) references Initial sequent 192.455 GS 1410.010, GS 1420.020, 192.457 GS 1420.030, GS 1420.035, 192.459 GS 1420.040, GS 1420.050, 192.461 GS 1420.070, GS 1420.080, 192.453 GS 1420.090, GS 1420.095, 192.465 GS 1420.100, G5 1420.105, 192.467 GS 1420.410, GS 1420.420, 535-4, 535-5, 192.469 G5 1420.430, GS 1420.440, 535-8, 640-1, 192.471 GS 1420.510, GS 1420.520, 640-2, 640-12 192.473 GS 1420.530, GS 1420.540, 643-4, 645-1

Application and Maintenance of Corrosion 192.475 G5 1420.550, GS 1420.580, 651-10, 653-2, Control Systems 192.477

3 years GS 1430.030, GS 1430.110, 653-3, 653-4,

K/s K/s Example: Corrosion Tech 192.479 GS 1430.120, GS 1430.130, 653-6, 653-7, 192.481 GS 1430.140, GS 1430.210, 653-8, 654-4, 192.483 GS 1430.220, GS 1430.230, 656-1, 563-1, 192.485 GS 1430.240, GS 1430.250, 721-2, 725-19 192.487 GS 1430.310, GS 1430.320,

192.489192.490 G5 1430.322, GS 1430.330, 192.609 GS 1430.410, GS 1440.010, 192.611 GS 1440.020, GS 1450.010, 192.613 GS 1460.010, GS 1450.020, 192.705 GS 1640.020, GS 1702.010, 192.706 G5 1704.010, GS 1708040,

1 192.721 1 GS 1730.010, GS 6500.190

34


Exhibit A Columbia Gas Covered Task List Qualification methods: K = Knowledge only

S = Skill only KIS= Knowledge & Skill

Qualification Method

DOT Legacy PIP Sub- Task Description References Interval Gas Standard (GS) references Initial sequent

192.455 192.457 192.459 192.461 192.463

GS 1410.010, GS 1420.035,

192.465 GS 1420.040, GS 1420.050,

192.467 GS 1420.410, GS 1420.510, 535-4, 535-5,

192.469 GS 1420.520, GS 1420.530, 535-8, 640-1,

192.471 GS 1420.540, GS 1420.580, 640-2,, 640-12,

Evaluation and Application of Corrosion Control 192.473 G5 1430.030, GS 1430.110, 643-4, 651-10, ha

Examp'e: Field Tech (plant) 192.475 3 years GS 1430.250, GS 1440.010, 653-2, 653-4, K/S K/S

192.477 GS 1450.010, GS 1460.010, 653-6, 653-8,

192.479 GS 1460.020, GS 1702.010, 654-4, 656-1,

192.481 GS 1704.010, GS 1708.040, 663-1, 721-2,

192.483 GS 2200.020, 725-19, JM 1320

192.485 192.487 192.489 192.705 192.721

35


Exhibit A Qualification methods: K Knowledge only Columbia Gas Covered Task List = Skill only



Task Description References Interval Gas Standard (GS) references Initial sequent 192,459 192.461 192.465 192.469

Reading Test Stations & Evaluation and 192.471 GS 1420.410, 535-8, 640-1,

lib Application of Above Ground Corrosion Control 192 473 GS 1430 030 GS 1430 110 645-1 653-2

K/s K/S ExampIe Test station reader

192:475 GS 1440.010, GS 1450.010, 653-4, 654-4 192.477 GS 1702.010, GS 1704.010 653-8, 656-1, 192.479 192.481 192.705 192.721

192.465 Evaluation and Application of Above Ground 192.479 535-8, 645-1,

lic Corrosion Control 192.481 3 years GS 1440 010 GS 1450 010

653-4, 653-6, K/S K/S Example: Service tech 192.705

GS 1702 010 GS 1704 010 654-4, 656-1,

192.721

Monitor Corrosion Control Methods / Patrolling 192.465

lid & Surveillance 192.481 3 years

GS 1450.010, GS 1702.010, N/A K/S L</S

Example: meter reader 192.705 GS 1704.010 192.721

Tapping & Stopping Pipelines - all Sizes & Pressures

GS 1680 010 GS 1680 040 640-1,640-2,

LI. - TO BE PERFORMED BY QUALIFIED INDIVIDUAL 192.627 3 years GS 1680.050,

' 640-7, 640-10 K/S K/s ONLY - DIRECT OBSERVATION NOT PERMITTED!

Tapping & Stopping Pipelines - 4" & smaller tap

hole size; 60 PSIG & less 640-1, 640-2, Lia - TO BE PERFORMED BY QUALIFIED INDIVIDUAL 192.627 3 years

GS 1680 010 GS 1680 040 640-7, 640-10 K/s K/S

ONLY - DIRECT OBSERVATION NOT Gs 1680.050,

PERMITTED!

36


Exhibit A Columbia Gas Covered Task List Qualification methods:KKnowdge only

K!S = Knowledge & Skill Qualification

- Method DOT Legacy PIP Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent Tapping & Stopping Pipelines - Self Punch Tees

/ LP Tapping and Bagging L1.b - TO BE PERFORMED BY QUALIFiED iNDIVIDUAL 192.627 3 years

- GS 1680 010 GS 1680 040 640-1 640-2

' K/S K/S GS 1680.050 640-7

ONLY— DIRECT OBSERVATLON NOT PERMITTED!

Lic Tapping & Stopping Pipelines - Self Punch Tees 192.627 3 years GS 1680.010, GS 1680.040 640-1, 640-2,

K/S K/s 135 1680.050 640-7

12 Purging Pipelines (No Restrictions) 192.629 3 years 135 1690.010, GS 1690.020 640-8 K/S K/S

1.2a Purging Pipelines (Service Lines & Meter Sets) 192.629 3 years GS 1690.010 640-8 K/S K/S

L3 Operating! Maintaining Odorization Equipment 192.625 3 years 135 1670010, GS 1670.020, 65 1-5, 660-2

K/S K/S GS 1670.030 721-6, 721-8

L3a Operating / Maintaining! Monitoring Farm Tap

192.625 3 years GS 1670.010, GS 1670020, 651-5, 660-2,

K/S K/S Odorizers & Odorant Levels 135 1670.030 721-6, 721-8

1-3b Monitoring Odorant Levels 192625 3 years 135 1670.020, GS 1670.020 K/S K/S

192.603 192.605

Gas Control - Controlling and Monitoring Gas 192.615

L4 pressure and flows; Monitoring Odorization 1 year7 GS 1660.020, 135 1754.010, K K Levels; and AOC's

192.623 192.625 192.631

' One year not to exceed 15 months per 192.631

37


Exhibit A Qualification methods: K KnowLedge only = Columbia Gas Covered Task List = Skill only

KIS _Knowledge & Skill Qualification


Task Description References Interval Gas Standard ()

references Initial sequent GS 1702.010, GS 1704.010

192.613 GS 1100.020, GS 1708.010, 640-11, 642-1

192.615 GS 1708.020, GS 1708.030, 645-1, 651-2,

Perform Leak Survey, Classification & Patrolling 192. 703 GS 1708. , . , 040 GS 1708 050

651-3, 651-4,

651-5, 651-6, Ml. Example: Leak inspector

192.705 3 years GS 1708.060, GS 1708.070, 651-8, 65 1-9,

K/s K/S 192.706 GS 1708.080, GS 1714.010, 192.721 GS 1714.030, GS 1714.040,

651-12, 663-1,

192.723 GS 1714.060, GS 1780.010 721-2, 721-4,

Damage Prevention Plan 721-5, 721-7,

192.613 192.615

GS 1702.010, GS 1704.010 645-1, 659-3

192. 703 GS 1708.010, GS 1708.020, 651-2, 651-3,

Mia Leak Classification & Patrolling

. 192705 3 years GS 1708.030, GS 1708.040, 651-4, 651-5,

K/S K/s Example Field (plant) and/or Service Tech. 192.706

GS 1708.060, GS 1708.070, 6-1, 651-8, 63

192.721 GS 1708.080, GS 1714.010, 721-2, 721-4,

192.723 G5 1714.030, GS 1714.060, 721-5, 721-7,

Damage Prevention Plan

192.614 Damage Prevention Plan, 640-11, 659-1,

M2 Locate and Mark Underground Facilities 192.707

3 years GS 1100.010, GS 1100.020, 659-2, 659-3 K/S K/S GS 1100.100, REF GS 1100.010, 659-5(34)

192.503 192.505 192.507

M3 Pressure Testing Pipelines 192 .509

3 years GS 1500.010, , GS 6500.030 ,

640-1, 640-2, 640-5, 725-3, K/S K/S 192.511 GS 6500.040, G5 6500.050

192.513 725-4, 725-5

192.719 192.725

*M4 is a progression task; the subparts of M-4 are stand-a-lone tasks. There is no collateral credit contained within the subparts of M-4

38


Exhibit A Qualification methods: K Knowledge only Columbia Gas Covered Task List = Skill only


Method DOT LegacyP!P Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent Inspect & Test Pressure Limit Stations, Relief Devices & Pressure Regulating Stations 192.731

192.739 GS 1750.010, GS 1750.020,

After an employee has been OQ qualified and It is 192.741 GS 1750.040, GS 1750.050,

654.3, 654-4, 4-5, 654-6,

*M4 time for subsequent re-qualification, he/she is then 192.743

3 years GS 1750.210, GS 1750.810,

654-10, 654-8, K/S K/s re- qualfled on task M-4 which contains all of the

192.749 GS 1752.010, GS 1754.010, 654-10, 724-9,

sub parts using module, GDS 6.18 ldentif,'ing 192.619 GS 1756.010, GS 1762.010,

724-U. Equipment and Practice Basic to Gas Regulation

192.621

Systems 192.623

Adjusting Pressure at Regulator Stations & Operating a By-Pass

192.739 GS 1750.010, GS 1750.020,

*M4a Training and initial qualification utilizing module, 192.619

3 years GS 1750.040, GS 1750.050 , 654-3 1 6 54-4,

654-10, K/S K/S GDS 5.2 Adjusting Pressure at Regulator St ations &

192.62 1 GS 1752.0 10, GS 1754.010,

Operating a By-Pass. Or GDS 6.4 Performing Basic 192.623 GS 1756.010

Maintenance Operation on Self-Operated Regulator Installations

192.743 Reading and Changing Charts 192.619 GS 1750.010, GS 1750.020,

654-3, 654-4, *M4b 192.621. 3 year

GS 1750.040, GS 1750.050, 654-10, K/S K/s

Training and initial qualification utilizing module, 192.741 GS 1752.010, GS 1754.010,

GDS 6.7 Reading MuftiplyRange Recording Chart 192.739 GS 175 6.010

39



KIS= Knowledge & Skill Qualification

Method DOT Legacy PiP Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent

Operating & Maintaining Self-Operated Pressure Regulators

Training and initial qualification utilizing module, 192.619

GOS 6.10 Operating & Maintaining Self-Operated 192.749 GS 1750.010, GS 1750.020, 654-3, 654-4,

Pressure Regulators 192.621

3 years GS 1750.040, GS 1750.050, 654-5, 654-6,

KfS K/S *M4c 192.739 GS 1754.010, GS 1754.810, 654-8, 654-10,

To work on Self-Operated regulators the employee 192.741 GS 1750.210, GS 6400.090, 724-9, 724-11 192.743 GS 6400.110

must first complete modules GDS6.7 (M-4b) & GDS6.4 Performing Basic Maintenance Operation On Self-Operated Regulator Installations.

Operating & Maintaining Pilot-Operated Pressure Regulators

Training and initial qualification utilizing module, 192.743 192.619 GS 1750.010, GS 1750.040, 654-3, 654-4,

*M4d GDS 6.11 Identifying Operating Characteristics of

192.749 GS 1750.050, GS 1754.010, 654-5, 654-6, Pilot-Operated Pressure Regulators 192.621

3 years GS 1754.810, G5 1750.210(XX) 654-8, 654-10

K/S K/S

To work on Pilot Operated regulators the employee 192.739 GS 6400.090, G5 6400.110 724-9, 724-11 192.741

must complete modules GDS6.4 Performing Basic Maintenance Operation On Self-Operated Regulator Installations, GD56.7 (M-4b), GDS6.10 (M-4c), and GDS6.11 (M-4d)

40


Exhthit A Columbia Gas Covered Task List Qualification methods: K = Knowledge only

S = Skill only K/S= Knowledge & Skill

Qualification Method

DOT Legacy PIP Sub- Task Description References Interval Gas Standard (GS) references Initial sequent

Operating & Maintaining Instrument Controllers

Training and initial qualification utilizing module. 192.743

GDS 6.26 Identifring Fundamental Principle5 and 192.619 GS 1750.010, GS 1754.010,

654-3,654-4,

*M4e Application of Instrument Controllers 192.749 3 years GS 1754.810, GS 1750.210(XX)

654-5, 654-6, K/s K/S 192.621

GS 6400.090, GS 6400.11.0 654-8, 554-10,

To work on Instrument Controllers the employee 192.739 724-9, 724-11 must complete modules GDS6.4 Performing Basic 192.741

Maintenance Operation On Self-Operated Regulator Installations, GDS6.7 (M-4b), GDS6.10 (M-4c), and GDS6.16 (M-4e)

Operating & Maintaining Transducers and Bristol Controllers

192.743 Training and initial quahfication utilizing moduie 192.619 654-3, 654-4, GDS 6.l7ldentifring Maintenance and Operation 192.749

GS 1750.010, GS 1754.010, 654-5, 654-6, *M4f Pro cedures for Transducers and Bristol Controllers 192.621

3 years GS 1754.810, GS 1750.210(XX) 654-8, 654-10, K/S K/S

192.739 GS 6400090, GS 6400.110 724-9, 724-11

To work on Transducers and Bristol Controllers the 192.741 employee must complete modules GDS6.4 Performing Basic Maintenance Operation On Self- Operated Regulator Installations, GDS6.7 (M-4b), GDS6.10 (M-4c), and GDS6.17 (M4f)

192.179

M5 Maintenance & Repair Line Valves and Critical 192.745 GS 1760.010, GS 2400.010, Valve Inspection 192.747

3 years GS 2400.020,

652-1, 652-2(32) K/S K/s

192.181 1

41


Exhibit A Qualification methods: K = Knowledge only Columbia Gas Covered Task List s = Skill only

KIS _KnowLedge & Skill Qualification

Method DOT Legacy PIP Sub-

Task Description References Interval Gas Standard (GS) references Initial sequent 192745

M5a Critical Valve Inspection 192.747

3 years GS 1760.010, GS 2400.010, 652-1, 640-2,

K/s K/s 192.325 GS 2400.020 652-2(32), 445-3 192.327

GS 1150.005, GS 1150.010,

192.615 GS 1150.020, GS 1150.030,

M7 Preventing & Responding to Potentially GS 1150.050, GS 1150.060, 511-2, 511-3, Hazardous Situations

192.751 3 years GS 1150.070, GS 1150.080, 640-11, 651-5

K K 192.614

GS 1150.090, GS 1150.100, GS_1150.200,_GS_1714.0 10,

192.614 M7a Preventing Accidental Ignition 192.615 3 years GS 1150.005, GS 1150.010, K K

192.751 192.307 192.309 192.311

GS 1100.050, GS 1420.410,

192.317 GS 1460.010, GS 1680.020,

192.319 GS 1680.040, GS 1680.050,

192.321 GS 1714.020, GS 1720.010, 535-4, 539-9,

Install I Replace! Repair Mains & Transmission 192.323 GS 1730.010, GS 3000.020, 614-4, 640-1,

M8 Lines 192.325 3 years

GS 3010.010, GS 3010.020, 640-2, 640-3, K/S K/S

192.327 GS 3010.030, GS 3010.040, 640-10, 651-6,

192.605 GS 3010.050, GS 3010.060, 65 1-10,

192.703 GS 30 10.070, GS 3010.080, 445-3

192.711 GS 30 10.090, GS 3010.100,

192.713 GS 3010.102, GS 3010. 104,

192.715 GS 3010.106,

192.717 192.275 GS 1460.010, GS 1714.020,

M9 Repair / Protect Cast Iron Pipe 192.753 3 years GS 1780.010, GS 1782.010, 642-1,, 651-5,

K/S K/s 192.755 G5 3020.030,

55110

42


Exhibit A Columbia Gas Covered Task List Qualification methods:K=Knowdge only

KJS = Knowledge & Skill Qualification

Method DOT LegacyP/P Sub-

Task Description References interval Gas Standard (GS) references Initial sequent

MiD Abandon Gas Piping I Discontinue Service GS 1740.010GS1742.010, GS

K/s K/s

MiOa Discontinue Gas Service 192.727

3 years GS 1740.010(xx)

725-8 K/S K/S 192379 GS 1742010, GS 3020.090,

43

Atlachrnent B Page 44 of 67

Exhibit B

Subsequent Qualification Intervals

Task Description Interval

Al Operating I Maintaining Propane Air Facilities Annual

Ala Operating Propane Air Facilities Annual

D18 Compressor Stations 6 month test (arc weld)

El Welding Pipelines 1. year test (all processes)

2 year test (all processes)

Ela Visualinspection of Welds 3rd calendar year

[2 Perform Nondestructive Testing on Steel Pipelines & Welds 3 calendar year

E3 Repair of Steel Pipelines by Grinding Annual

Fl Joining Plastic Pipe Manual & Hydraulic Annual

Fla Joining Plastic Pipe - Manual Only Annual

F2 Join Pipe with Mechanical Fittings Annual

F3 Joining and Repairing Polyvinyl Chloride (PVC) Pipe Annual

Gl Excavating and Backfilling 3rd calendar year

G2 Horizontal Directional Drilling 3rd calendar year

G3 Other Boring Methods 3rd calendar year

Hi Installing / Replacing! Repairing Meter and Regulator Sets 3rd calendar year

H2 Installing / Replacing / Repairing Gas Service Lines 3Id calendar year

1-12a Visual Inspection of Gas Lines 3rd calendar year

Ii Application and Maintenance of Corrosion Control Systems 3rd calendar year

ha Evaluation and Application of Corrosion Control 3id calendar year

lib Reading Test Stations & Evaluation and Application of Above

Ground Corrosion Control

rd 3 calendar year

lic Evaluation and Application of Above Ground Corrosion Control 3(d calendar year

Ild Monitor Corrosion Control Methods / Patrolling & Surveillance 3d calendar year

Li Tapping & Stopping Pipelines - all Sizes & Pressures 3rd calendar year

Lla Tapping & Stopping Pipelines —4" and smaller tap hole / 60 PSIG

and less 3rd calendar year

Llb Tapping & Stopping Pipelines - Self Punch Tees & Low Pressure 3rd calendar year

Lic Tapping & Stopping Pipelines - Self Punch Tees 3 calendar year

L2 Purging Pipelines — No Restrictions 3rdcalendaryear

L2a Purging Pipelines - Service Lines & Meter Sets 3' calendar year

L3 Operating / Maintaining Odorization Equipment 3rd calendar year

Operating / Maintaining! Monitoring Farm Tap Odorizers & L3a 3 calendar year

Odorant Levels

L3b Monitoring Odorant Levels 3 r, calendar year

Gas Control - Controlling and Monitoring Gas pressure and flows; 14

Annual Monitoring Odorization Levels; and AOC's

Ml Perform Leak Survey, Classification & Patrolling 3 calendar year

Mia Leak Classification & Patrolling 3rd calendar year

M2 Locate and Mark Underground Facilities 3id calendar year

M3 Pressure Testing Pipelines 3" calendar year

This Is a place holder only; at this time Columbia does not operate or maintain any compressor stations.

44


Exhibit B

M4 Inspect and Test Pressure Limit Stations, Relief Devices and Pressure

Regulating Stations rd 3 calendaryear

M4a Adjusting Pressure at Regulating Stations and Operating a By-Pass 31C calendar year

M4b Reading and Changing Charts 3rd calendar year

M4c Operating and Maintaining Self-Operated Pressure Regulators 3d calendar year

M4d Operating and Maintaining Pilot-Operated Pressure Regulators 3rd calendar year

M4e Operating and Maintaining Instrument Controllers 3Id calendar year

M4f Operating and Maintaining Transducers and Bristol Controllers 3Id calendar year

M5 Maintenance & Repair Line Valves and Critical Valve Inspection 3Idcalendaryear

MSa Critical Valve Inspection 3rd calendar year

M7 Prevention & Responding to Potentially Hazardous Situations 3i calendar year

M7a Preventing Accidental Ignition 3rd calendar year

M8 Install / Replace / Repair Mains & Transmission Lines 3rd calendar year

M9 Repair/ Protect Cast Iron Pipe 3rd calendar year

M1O Abandon Gas Piping / Discontinue Services 3" calendar year

MlOa Discontinue Gas Service 3' calendar year

45


ExhibftB Subsequent Qualification Interval Matrix

Assign a value (ranging from 1 to 5) to each of the three qualifying categories. Critical nature refers to

how serious the consequences would be if the task was done improperly (1 = minor, 5 = catastrophic).

Complexity refers to how complex a task is to perform. Complex tasks have a score of 5 and simple

tasks have a score of 1. Frequency refers to how often the task is performed. Frequently performed

tasks have a score of 1, while infrequently performed have a score of 5. The total of the three columns

will identify the requalification interval.

If the total Score (X) is <6=60 Fifth calendar year

2~ 6 but <10 = Third calendar year ,?10 but<16 =12 months

Re- Columbia Covered. CRITICAL

COMPLEXITY FREQUENCY TOTAL evaluation Task and Description NATURE Interval

Al Operating / Maintaining Statutory 192.11 NFPA 58 & 59 NA Annual

Propane Air Facilities

Ala Operating Propane Air Statutory 192.11 NFPA 58 & 59 NA Annual

Facilities 9

Dl Compressor Stations 6-month arc

test

lyear all El Welding Pipelines Statutory 192.227 API 1104 NA

processes

2 year all

processes

ElaVisuallnspectionof 1 1 3 5 5years

Welds

E2 Perform Nondestructive

Testing on Steel Pipelines & 1 5 1 7 3 years

Welds E3 Repair of Steel Pipelines

4 2 5 11 Annual by Grinding

Fl Joining Plastic Pipe— Statutory 192.285 NA NA Annual

Manual &Hydraulic

Fla Joining Plastic Pipe - Statutory 192.285 NA NA Annual

Manual Only

F2 Joining Pipe with Statutory 192.285 NA NA Annual

Mechanical Fittings

F3 Joining and Repairing Statutory 192.285 NA NA Annual

Polyvinyl Chloride (PVC) Pipe

Gi Excavating and Backfilling 3 3 1 7 3 years

G2 Horizontal Directional 3 2 8 3years

Drilling

G3 Other Boring Methods 3 2 3 8 3 years

Hi Installing I Replacing / RepaIring Meter and 3 3 1 7 3 years

Regulator Sets

This is a place holder only; at this lime Columbia does not operate or maintain any compressor stations.

46


Exhibit B Re-

Columbia Covered CRITICAL COMPLEXITY FREQUENCY TOTAL evaluaflon

Task and Description NATURE Interval H2 Installing / Replacing / 3 3 1 7 3years Repairing Gas Service lJnes

H2a Visual Inspection of Gas 1 1 1 3 Syears

Lines

Ii Application and

Maintenance of Corrosion 3 4 1 8 3 years

Control Systems

ha Evaluation and

Application of Corrosion 3 4 1 8 3years

Control

lib Road ing Test Stations & Evaluation and Application of

3 2 2 7 3years Above Ground Corrosion

Control

lic Evaluation and

Application of Above Ground 3 2 2 7 3years

Corrosion Control

lid Monitor Corrosion

Control Methods / Patrolling 2 2 2 6 3 years

& Surveillance

Lllapping& Stopping

Pipelines—Al] Sizes & 3 3 3 9 3 years

Pressure

ha Tapping & Stopping

Pipelines —4" and smaller tap 3 3 3 9 3 years

holes! 60 PSIG & less

Lib Tapping & Stopping

Pipelines - Self Punch Tees / 3 3 2 8 3 years

Low Pressure Bagging

Lic Tapping & Stopping 3 1 1 5 Syears

Pipelines - Self Punch Tees

12 Purging Pipelines - No 5 3 1 9 3years

Restrictions

L2a Purging Pipelines - Service Lines and& Meter 3 1 - 1 5 5 years

Sets

L3 Operating / Maintaining 3 3 1 7 3years

Odorization Equipment

Ba Operating! Maintaining

/ Monitoring Farm Tap 3 2 3 8 3 years

Odorizers & Odorant Levels

L3b Monitoring Odorant 1 1 1 3 5years

Levels

14 Gas Control - Controlling

and Monitoring Gas pressure

and flows; MoLlitoring Statutory 192631 N/A N/A Annual

Odorization Levels; and

AOC's

Ml Perform Leak Survey, 3 3 1 7 3years

Classification & Patrolling _________________

47

AttachmenL B Page 48 0167

Exhibit B

Columbia Covered CRITICAL COMPLEXITY FREQUENCY TOTAL

Re- evalUation

Task and Description NATURE Interval Mia Leak Classification &

5 3 1 9 3years Patrolling

M2 Locate and Mark 3 3 1 7 3years

Underground Facilities

M3 Pressure Testing 3 3 3 9 3 years

Pipelines

M4 Inspect and Test Pressure

Limit Stations, Relief Devices 3 5 1 9 3years

and Pressure Regulating

Stations

M4a Adjusting Pressure at

Regulating Stations and 3 3 3 9 3 years

Operating a By -Pass

M4bReadingandChariging 3 3 3 9 3years

Charts

M4c Operating and

MaintainingSelf-Operated 3 3 1 7 3years

Pressure Regulators

M4d Operating and

Maintaining Pilot-Operated 3 3 3 9 3 years

Pressure Regulators

M4e Operating and

Maintaining Instrunient 3 3 3 9 3 years

Controllers

M4f Operating and

Maintaining Transducers and 3 3 3 9 3 years

Bristol Controllers

M5 Maintenance & Repair

Line Valves & Critical Valve 3 3 3 9 3 years

inspection

MSa Critical Valve Inspection 3 2 3 8 3 years

M7 Preventing & Responding

to Potentially Hazardous 5 3 1 9 3 years

Situations

M7a PreventingAccidental 3 1 9 3 years

Ignition

M8 Install! Replace / Repair 3 1 7 3 years

Mains & Transmission Lines

M9 Repair / Protect Cast Iron 3 3 9 3 years

Pipe

M10 Abandon Gas Piping! 3 3 1 7 3 years

Discontinue Service

MlOa Discontinue Gas 1 1 1 3 5years

Service _________

48


Exhibit C

CONTRACTOR OPERATOR QUALIFICATION REQUIREMENTS

1. Contractor shall provide and maintain, as required by Columbia Gas, a written plan identifying

Contractor's DOT Operator Qualification program. This program must meet or exceed all

requirements as outlined in 49 CFR PART 192 SUBPART N and receive Columbia Gas approval for the

written plan and any subsequent modifications to the plan.

2. Contractor shall supply to Columbia Gas an electronic copy of its written Operator Qualification plan

and any modifications or changes thereto, as well as any required employee qualification records.

This information shall be used by Columbia Gas to verify Contractor compliance with 49 CFR 192

SUBPART N as may be required by federal and state audits, or other governmental authority

requests. If the Contractor's failure to comply results in a fine and or penalty, the Contractor will be

responsible for all associated monetary cost, including reimbursement to Columbia Gas of any fines

or penalties incurred by Columbia Gas as a result of or arising out of the Contractor's Operator

Qualification plan.

3. Contractor shall be allowed to utilize Individuals who are not qualified to perform a covered task as

long as a qualified individual directly observes the performance and is able to take immediate

corrective action when necessary as outlined in Section C of this plan. Columbia reserves the right to

limit the time a person can perform a covered task before receiving the necessary qualifications.

Columbia reserves the right to limit the ratio of nonqualified to qualified employees performing

covered task(s) on Columbia Gas facilities.

4. Contractor's employees shall have with them at all times wallet cards or other acceptable means of

providing a list of their personal qualifications while performing covered task(s) on Columbia Gas

facilities.

5. Contractor shall provide Columbia, immediately, any changes that are made regarding Contractor's

written plan, or changes in an employee's qualification status to perform covered task(s) on

Columbia Gas facUlties.

6. Contractor, upon request, shall provide any information requested by Columbia Gas regarding

Contractor's compliance with Operator Qualification requirements.

7. Contractor's method used to evaluate an employee's ability to perform a covered task(s) on

Columbia Gas facilities must receive Columbia Gas approval prior to Contractor performing any

services under any agreement (3rd party qualifying, Contractor evaluation program, or other).

Columbia Gas does not accept work performance history as an acceptable evaluation method by the

Contractor. Columbia Gas does not accept computer-based/video qualification testing as the sole

method of qualification. Columbia Gas will only accept qualification methods utilizing an Operator

approved validated curriculum, administered by individuals that have successfully completed an

Operator approved qualifier program. Contractor's employees must achieve a minimum score of

80% to be qualified for each Covered Task.

8. Contractor shall maintain adequate records, including an employee's qualification records, as

prescribed in 49 CFR 192.807 and Sec. J of this plan. Columbia Gas shall be granted access to

Contractor's records, including the written plan and employee records. This access shall be for as

long as Contractor's employee continues to perform covered tasks on Columbia Gas facilities, and

for a period of at least five (5) years after an employee no longer performs covered task(s) on

Columbia Gas facilities. Monthly submission of contractor employees OQ records is required.

9. Contractor's employee's qualification records shall include: Identification of the qualified individual;

Identification of the covered task(s) the individual is qualified to perform; Date(s) of current

49

Allachment B Page 50 of 67

Exhibit C qualification; Qualification method(s); and must identify to company, individual or

31(1 party that

performed the evaluation.

10. Qualification records supporting an individual's current qualification shall be maintained as

prescribed in section 192.807 - Record keeping (five years from the date an individual last

performed any identified covered task). Contractors will make monthly submission of qualification

records to Compliance Specialists specific to the state in which work is being performed.

11. Sub-Contractors - If a contractor requires the services of a sub-contractor to perform an identified

covered task(s) the contractor must first obtain approval from Columbia Gas's OQ Administrator, through communication with the state specific Compliance Specialist. The sub-contractor will be

required to meet or exceed all Federal, State and Columbia Gas OQ requirements prior to the

performance of any identified covered task(s) on Columbia's facilities. Non-qualified individuals

working for a sub-contractor will be allowed to perform identified covered task(s) under the direct

observation and responsibility of a qualified individual in accordance with Section C of this plan.

CONTRA CTOR EVALUATION REQUIREMENTS

> Contractors (including sub-contractors) performing work on Columbia Gas of Virginia, Inc. (CGV) facilities are required to have all OQ evaluations performed and/or proctored by an approved third

party OQ provider using only NiSource Gas Distribution materials. 10

> For Columbia Gas work outside of Virginia; qualifications can be administered by an approved third

party provider or the Contractor may administer qualifications. Self-administered qualifications are

valid only with prior approval from Columbia and only when using a NiSource approved

proctor/evaluator and OQ program. Self-administered qualification will not be valid for work on

CGV facilities.

Approved Third Party OQ Evaluation Providers

CDC has established the following companies as current approved OQ Providers for DOT 192 subpart N,

evaluations:

Avalanche and T, Inc. ARC Randolph Associates

Al Welker Donna Nedelk

276 Berry Hill Rd, 4017 Washington Road, Suite 175

Orange, VA 2216OPhone (540) 661-7308/ Fax McMurray, PA 15317 (540) 832-0077 Phone (412) 580-8668

Bluegrass Instructional Services Bowman Consulting (formerly CTS1)

Chris Sligh 9813 c5odwin Drive

3438 McClure Road Manassas, VA 20110

Winchester, KY 40391 Phone (703) 530-8093 ext. 3029 / Cell (703) 400-1360

Phone (859) 494-3173 / Fax (859) 744-9974 Professional Utility Resources (PUR) R. L. Wingate & Associates, Inc.

P.O. Box 31794 1112 North Cleveland RD.

independence) Ohio 44131 Lexington, Kentucky 40509

Phone (216) 870-2707 Phone (859) 543-0224

Utility Technologies International Corporation (UTI)

4700 Homer Ohio Lane. Groveport, Ohio 43125 Phone (614) 482-8080/ Fax (614) 482-8070

10 Exceptions to this option can be made in accordance to 'Approved Oct Programs and Material' section located below.

50


Exhibit C

Approved OQ Programs and Material

CDC has established the following Programs as current approved for DOT 192 subpart N, evaluations:

NiSource Gas Distribution, Midwest Energy Association (MEA), Industrial Training Services (ITS) and Northeast Gas Association (NGA). CGV will only accept qualifications performed and certified by

approved third party 00 providers utilizing NiSource Gas Distribution modules.

Exceptions to these options may be approved on a case-by-case basis and will require written

authorization by the NiSource OQAdministrator prior to any identified covered task(s) being performed

on Columbia Gas facilities including facilities in CGV. Examples under consideration for exception are,

but not limited to, underwater pipeline operations, specialized pipe lining operations, nondestructive

testing of steel welds and manufacturer training and evaluation.

51


ExhibIt C

Contractor OQ Review/Approval Process Prior to Contract Bid

1 Group letting contract determines the covered tasks that will be performed by

the contractor (rely on input from the 00 Administrator for input on covered

task(s) based on scope of work for the contract being bid.)

2 Exhibit C and additional 00 guidance material are packaged for distribution to

contractors for the pre-bid meeting

Prior to Contract Award

Contractor submits 00 plan for Company review and approval

u 00 Administrator reviews contractor's written 00 Plan language as

submitted

ci Columbia 00 Plan language applied to contractor's plan

ci Deficiencies identified and addressed

ci Contractor's Plan reviewed for potential restrictions placed on

Colu mbia.

ci Ensure contractor's plan addresses validation methods for Evaluators

and Evaluations

• Columbia's task list is identified within contractor's plan

• Protocol applied to ensure plan meets Columbia Gas needs and

regulatory requirements

2 Plan returned to the contractor with changes (if any)

3 00 Administrator addresses any contractor questions/concerns pertaining to

00 plan approval

Notification of Affected Parties

1 00 Administrator receives revised contractor OQ plan for final review/approval

and notifies contractor of acceptance

2 Responsible Columbia Gas group notified of acceptance of the contractor 00

plan

3 Contractor and responsible Columbia Gas group advised that the contractor's

evaluation materials, record keeping and field operations, will be audited to

ensure compliance.

52


Exhibit C

Contractor OQ Review/Approval Process

Prior to Contract Bid

Group letting contract determines the covered tasks that will be performed by the contractor (rely on input from the 00 Administrator for input on covered task(s) based on scope of work for the contract beinci bid.)

Prior to Contractor Award Description

1. Contractor submits 00 plan for Columbia Gas review and approval

D 00 Administrator reviews Contractor's written 00 Plan language as submitted.

U Columbia Gas 00 Plan language applied to contractor's plan.

U Deficiencies identified and addressed. u Contractor's Plan reviewed for potential restrictions

placed on Columbia Gas. U Ensure contractors plan addresses validation

methods for Evaluators and Evaluations. U Columbia Gas specific task list is identified within

contractor's plan. u Protocol applied to ensure plan meets Columbia's

needs. 2. Plan returned to the contractor with changes (if any). 3. 00 Administrator addresses any contractor question/concerns pertaining to OQ plan approval.

he Contractor

I. The contractor makes necessary changes to its 00 plan as identified by 00 Administrator.

2. The contractor will resubmit their 00 plan as many times as

necessary to obtain approval.

Notification of Affected Parties

1. OQ Administrator receives revised contractor 00 plan for final review/approval and notifies contractor of acceptance.

2. Responsible Company group notified of acceptance of the contractor 00 plan.

3. Contractor and responsible Company group advised that the contractor's evaluation materials, record keeping and field operations will be audited to ensure compliance.

53


Exhibit D

Protocol for Evaluating Operator/Contractor OQ Plan Written Plan —49 CFR 192, Subpart N

Name of Operator/Contractor: Date Submitted:

Representative responsible for the plan: Plan reviewed and accepted by S&C:

Name: Date:

Havethe following categories been addressed YES NO COMMENTS

WRITTEN PLAN Is there a written plan in place?

COVERED TASKS

Have they identified covered tasks using the

following criteria?

• Performed on a pipeline

• Operation or maintenance task

• Affects operation/integrity of the

pipeline

• Required under 49 CFR 192

EVALUATION PROCESS

Have they ensured, through evaluations, that

individuals performing the covered tasks are

qualified.

• Written exam

• Oralexam

• Observation of performance on the job

• On the job training

• Simulations

• Otherformsofassessnient

EVALUATION PROCESS

Have they established criteria around:

• Transitional qualification —(1) who

performed covered tasks on regular

basis prior to August 27, 1999 and (2)

who is qualified to perform those same

covered tasks according to the criteria

above prior to October 28, 2002.

• Initial qualification - Did not perform

covered tasks prior to August 27. 1999.

• Subsequent qualification —after

transitional or initial qualification and

after October 28, 2002.

54


Exhibit D Name of Operator/Contractor: Date Submitted:


Name: Date:

Have the following categories been addressed YES NO COMMENTS

NONQUALIFIED INDIVIDUAL Have they established criteria for non-qualified

individuals to perform a covered task? Does it

meet the minimum criteria of;

• Qualified individual assigned to direct & observe during the task

• Qualified individual is able to take

immediate corrective actions

• Qualified individual is responsible for

the performance of the task

• Qualified individual can communicate

effectively with the non- qualified

individual

• Ratio of non- qualified individuals is

kept to a safe minimum

PERFORMANCE CONTRiBUTING TO AN

INCIDENT

Have they established criteria around

performance contributing to an incident,

including;

• Provision to evaluate an individual if

Columbia (the Operator) has reason to

believe the individual's performance of

a covered task contributed to an

incident.

• Process to determine whether an

individual needs to be reevaluated.

REASONABLE CAUSE TO VERIFY

QUALIE ICAT1ONS

Are there provisions to evaluate an individual if there is reason to believe he/she is no longer

qualified to perform the covered task? Reasons could include but are not limited to;

• Absenteeism

• Loss of motor skills, vision, impairment,

etc.

• Statements from the individual

• Prolonged period of non-performance

• Unsatisfactory performance

• Upon request

55




Name: Date:


COMMUNICATE CHANGES

Are there provisions to communicate changes

that affect covered tasks to individual

performing the task? Changes could be but

are not limited to;

• Significant changes in policies or

procedures

• Changes in state or federal regulations

• Use of new equipment/technology that

affects the task.

• New information from equipment or

product manufacturers that significantly

affects the task.

The levels of communications should be based

on the severity of the changes, for instance;

• Limited impact - no communication

• Moderate impact—communication only

• Significant impact —communication & modification of the qualification process

SUBSEQUENT QUALIFICATION

INTERVALS

What method did they use to determine the

evaluation and qualification intervals for their

covered tasks?

RECORD KEEPING

Does the record system used maintain

information for the following data points and

retain that information for a minimum of five

(5) years?

• Identity of the covered tasks(s) and

related subsequent qualification

interval(s)

• Identification of the evaluator

• Evaluation method(s) used

• Identification of the individual being

qualified

• Date(s) on which the qualification was

completed

• Qualification method(s)

56




Name: Date:


TRAINING

Does their plan have provide provision around;

• Training required for new employees

• Training for employees taking on a new

task(s)

• Training for employees who fail an

evaluation(s)

• Training as required for new

technology, equipment, materials,

statutory requirements, etc.

57

Attachment B Pa9e 58 of 67

Exhibit D

Gap Analysis for Evaluating Operator/Contractor OQ Covered Tasks

OPERATOR/CONTRACTOR INFORMATION

Name of Operator/Contractor:

Operator/Contractor Representative's Name:

Phone:

E-mail:

OQ Program used (i.e. MEA, ITS, etc)

I Evaluator(s) qualified by (i.e., SGA Evaluator training, MEA, ITS, etc.):

Materials Validated: Yes or No Year:

Validation company name:

EVALUATORS:

Name:

Task(s)

1. 1.

2. 2.

3. 3.

4. 4.

S. 5.

6. -... 6.

58


Exhibit D

Task Description. Operator I Contractor Equivalent Task(s)

WPHR used

Qualification Method used

V N InitIal •Re-qual

Al Operating! Maintaining Propane Air Facilities

Ala Operating Propane Air Facilities

Dl Compressor Stations

El Welding Pipelines

Ela Visual Inspection of Welds

E2 Perform Nondestructive Testing on Steel

Pipelines & Welds

E3 Repair of Steel Pipelines by Grinding

El Joining Plastic Pipe - Manual & Hydraulic

Fla Joining Plastic Pipe - Manual Only

F2 Joining Pipe with Mechanical Fittings

F3 Joining and Repairing Polyvinyl Chloride (PVC)

Pipe

Gi Excavating and Backfilling

GZ Horizontal Directional Drilling

G3 Other Boring Methods

Hi installing / Replacing! Repairing Meter and

Regulator Sets

H2 Installing / Replacing / Repairing Gas Service

Lines

H2a Visual Inspection of Gas Lines

Il Application and Maintenance of Corrosion

Control Systems

Exceptions to this option can be made in accordance to Approved OQ Programs and MateilaL" section located below.

59


Exhibit D WPHR Qualification Method used used

V N. Initial Re-qual Task Description Operator! Contractor Equivalent Task(s)

a Evaluation and Application of Corrosion Control

Reading Test Stations & Evaluation and lib Application of Above Ground Corrosion

Control

Evaluation and Application of Above Ground lic

Corrosion Control

Monitor Corrosion Control Methods / lid Patrolling & Surveillance

Tapping & Stopping Pipelines —All Sizes & Li

Pressures

Lia Tapping & Stopping Pipelines —4" and smaller

tap hole; 60 PSIG and less

Lib Tapping & Stopping Pipelines - Self Punch Tees

& Low Pressure Bagging

Lic Tapping & Stopping Pipelines - Self Punch Tees

L2 Purging Pipelines - No Restrictions

ila Purging Pipelines - Service Lines and Meter

Sets

Operating / Maintaining Odorization

Equipment

Operating / Maintaining! Monitoring Farm L3a

Tap Odorizers & Odorant Levels

L3b Monitoring Odorant Levels

Gas Control - Controlling and Monitoring Gas

L4 pressure and flows; Monitoring Odorization

Levels; and AOC's

Mi Leak Survey, Classification & Patrolling

Mia Leak Classification & Patrolling


Exhibit D • WPHR Qualification Method

used used

V N tnitial. Re -qual Task Description Operator! Contractor Equivalent Task(s)

M2 Locate and Mark Underground Facilities

M3 Pressure Testing Pipelines

Inspect and Test Pressure Limit Stations, Relief M4

Devices and Pressure Regulating Stations

Adjusting Pressure at Regulating Stations and M4a

Operating a By-Pass

M4b Reading and Changing Charts

Operating and Maintaining Self-Operated M4c

Pressure Regulators

M4d Operating and Maintaining Pilot-Operated

Pressure Regulators

Operating and Maintaining Instrument M4e

Controllers

M4f Operating and Maintaining Transducers and

Bristol Controllers

Maintenance & Repair Line Valves & Critical M5

Valve Inspection

M5a Critical Valve Inspection

Preventing & Responding to Potentially M7

Hazardous Situations

M7a I Preventing Accidental Ignition

Install I Replace / Repair Mains & Transmission MS Lines

M9 Repair/ProtectCastlron Pipe

M1O Abandon Gas Piping / Discontinue Service

MlOa Discontinue Gas Service

61


Exhibit D

FOR INTERNAL USE ONLY

Date received: Date completed:

Materials Validated: Yes or No When: By whom:

Comments:

Gap Analysis reviewed and completed by S&C staff member:

Name: Date:

62

Allachment B Page 63 of 67

Exhibit E

Failure to Qualify

Human Resource Guidelines on Qualification of Emp!oyees

Columbia Gas has designed a program to assist the employee in successfully completing

requirements of its DOT Operator Qualification Program. The program includes a customized training plan designed to 1) meet the needs of Columbia Gas in carrying out its legal and

regulatory obligations, and 2) assisting and supporting the individual employee in obtaining legally-required qualifications. However, Columbia Gas does not guarantee the employee will

receive qualification to perform any Covered Task and is not obligated to ensure employee

success.

The local leadership team, HR and C&Twill support and review the plan and the individual

qualification process as necessary.

If an employee fails to qualify to perform a covered task that is an essential job

function, the following action shall be taken:

1. The individual will immediately be deemed non-qualified to perform that particular task.

2. If possible, an evaluator will provide immediate feedback to the individual on his/her

performance of the covered task and noted deficiencies.

3. Where it is permissible for non-qualified employees to perform Covered Tasks, and in

accordance with the requirements of Columbia Gas's Operator Qualification plan

(Section C), the individual may, at the option of Columbia Gas, be asked to perform the task he/she did not qualify. Columbia Gas will make this determination in accordance

with its operational demands, the obligations and responsibilities of the job

classification, and pursuant to all applicable requirements of its DOT Operator

Qualification (00) plan.

4. In the immediately following *30.day period, an evaluator will evaluate the individual's

qualification to perform the covered task as required by Columbia 00 Plan. During this *30..day time period, at Columbia Gas's option, the individual may continue to work

under the direct supervision of a qualified individual and in accordance with the

requirements of the 00 Plan.

5. If an individual fails to qualify on the second attempt, he/she will go through re-training

within *30 days. During this *30day time period, the individual may continue to work

under the direct supervision of a qualified individual.

6. Within the following *30..day time period, the completion of the written training plan

and the third attempt to qualify the individual shall be conducted. If the individual fails to successfully qualify on the third attempt, Human Resource and Local Leadership will

decide upon the appropriate action taken.

*The 30-day time period may be waived at management's discretion*.

63


Exhibit F CDOQNOC[GS standard]

[GS standard - title] Issued: [date]

NiSource Gas Distribution - Columbia Gas Companies Operator Qualification Plan

Notification of Change Form

The following Procedure(s) or Task(s) has been modified or changed

Procedures:

Tasks:

Indicate type of change: Modification to company policies or procedures Use of new equipment and/or technology Change in State or Federal regulations New information from equipment or product manufacturer Other, explain

WMS job number the meeting was charged to

The modification or change is described as follows.

This is a Level 2 Impact to the Company's OQ Cover Tasks. This Communication of Change is effective [date], with a target implementation date of [date]. This information is required to be communicated to all individuals (induding contractors) qualified for tasks [tasks]. The changes have a [impact] impact, and are [ex. for moderate: communication only and does not effect the skill and ability of performance].

The following document numbers or descriptions indicate revisions or modifications to written procedures. j

[standard no.], "[title]" [tasks affected] a. Narrative description of change.

64

Affachment B Page 65 of 67

Exhibit F

LMS Item: CDOIOCIGS standrdJ EGS standid- 111101

Is5ud: tda1

I hEmbyackrxWedgeMl TIaYe recekednoOkaDmorchange acwedbk pfredby4 CFR 192I05I) or n1Ucaftn tgWange ba oornpan titrdg. and1havereMweg Inechange aT knFatb U1lV(1L

I Linderibm that nnnaftaIlDmIalponclarrand pwceIIHenmabe reqit0d. asco0UhcnE waITarL id(ftaI undersLand CcereaTanthanQe anti agioa loal me iequlrnmenla cnolaeefleiali.

TWlUWMg rnodlnah flOf tharjga.

lkt1 -.riiI-

Nolirted by: Pane I of 2

65

Attachment B Page 66 o167

Exhibit F LMS Item: CDOQNQCLGS standardj

[G5 standard- IWeJ Issued: (date]

I e rsnoeiadgai1attase raceterI rocatIw oId1ana cia v xeed by4Y CrR 12tO5(I) a naWcatJan o(CIiin9e to company 9wandr, anrIsaVe meetoe dlange!or tiipt ionio& I undErdandlhtmoflcaflnna to palcies and pmooei1ire maybe rmd. ancoadillonawarrart alidirrati underelaliiltrie Ccierealaakcflangeaua agmen Ion! the mecpi1iemnena contained herein.

The ronamrg Ilean beEn riolillad ctthe abosrrrocrUcahon OF charge

— '

•f; i

Notified by: Page 1 of 2

66


Exhibit G

I OQ Plan Proposed Change Form

Date: Reason for Proposed Change

D Annual Review U Change in code LI Other

Type of change: LI Editorial U Technical LI Other

Brief Description of Change:

Existing text:

Proposed text:

I. Name . of Individual ProposingChange

Printed Name:

Signature:

67

Exhibit NJDK-3

lxhibit NJKD-3

Certification Regarding Base Rate Proceeding

I, Nancy J. D. Krajovie, pursuant to 66 Pa. C.S. § 1353(b)(4), hereby certify that Columbia Gas of Pennsylvania, Inc has filed a base iate pioceeding within five years ptior to January 2, 2013, which is the date of its inthal petition to establish a Distribution System Impiovernent Charge authorized by 66 Pa C S §1353 Specifically, columbia Gas of Pennsylvania, Inc.'s current base rates were established in Docket No. R-2o10-2215623, which was a base rate case filed on January 14, 2011.

Dated: Janaiy 2, 2013 qO Nancy J. A Krajovic Director, Rates and Regulatory Affairs Columbia Gas of Pennsylvania, Inc.

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