STATE OF INDIANA

INDIANA UTILITY REGULATORY COMMISSION

IN THE MATTER OF THE UNDERGROUND ) PIPELINE PROTECTION ADVISORY ) CAUSE NO. 45004 NOV 2 1 2017 COMMITTEE CASE NO. 15299 AND NOTICE ) OF THE COMMISSION'S INTENT TO ) RESCIND ITS SEPTEMBER 27, 2017 ORDER ) APPROVED: CONCERNING CASE NO. 15299 )

ORDER OF THE COMMISSION

Presiding Officers: James D. Atterholt, Chairman Loraine L. Seyfried, Chief Administrative Law Judge

Based upon a letter received from the General Counsel of the Indiana Utility Regulatory Commission ("Commission") and pursuant to Ind. Code § 8-1-2-72, the Commission commences this Cause and notifies Alt Construction, Inc. ("Alt Construction") of its intent to rescind its September 27, 2017 Order in Case No. 15299 upholding the finding of violation by the Commission's Pipeline Safety Division ("Division") and approving the recommendation of the Underground Pipeline Protection Advisory Committee ("Advisory Committee").

1. Commission Jurisdiction. Under Ind. Code § 8-l-26-23(k) and 170 IAC 5-5-3, the Commission has jurisdiction to uphold or reverse a finding of violation of Ind. Code ch. 8-1-26 by the Division and to approve or disapprove the penalty recommended by the Advisory Committee. The Commission also has general authority to rescind, alter, or amend any of its orders upon notice and after an opportunity to be heard. Ind. Code § 8-1-2-72. Therefore, the Commission has jurisdiction over Alt Construction and the subject matter of this proceeding.

2. Background and Procedural History. On September 27, 2017, the Commission issued an Order upholding the finding of the Division that Alt Construction violated Ind. Code § 8-l-26-20(a). The Order also approved the Advisory Committee's recommendation to require Alt Construction to provide training or pay a $5,000 penalty if training was not completed.

Ind. Code § 8-l-26-23(g) requires the Division to investigate alleged violations of Chapter 26. Since issuance of the Commission's September 27, 2017 Order, the Commission has learned that Alt Construction provided additional information to counsel for the Advisory Committee that was not conveyed to the Advisory Committee. The information is material to the recommendation ultimately made by the Advisory Committee. Letter from Beth E. Heline, General Counsel, Commission, to Loraine Seyfried, Chief Administrative Law Judge, Commission (November 1, 2017) (attached).

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3. Notice of Rescission. Based upon the information submitted by the Commission's General Counsel, the Commission notifies the Division, the Advisory Committee, and Alt Construction that it intends to rescind its September 27, 2017 Order concerning Advisory Committee Case No. 15299 and to reopen the case for the purpose of allowing the Advisory Committee to reconsider its penalty recommendation. If the Division, the Advisory Committee, or Alt Construction has any objection to the proposed rescission, a request for hearing shall be filed under this Cause within 20 days from the date of this Order.

IT IS THEREFORE ORDERED BY THE INDIANA UTILITY REGULATORY COMMISSION that:

1. Based upon information from the Commission's General Counsel, the Commission intends to rescind its September 27, 2017 Order concerning Advisory Committee Case No. 15299.

2. Any objection by the Division, the Advisory Committee, or Alt Construction to the Commission's rescission of its September 27, 2017 Order concerning Advisory Committee Case No. 15299 shall be filed within 20 days from the date of this Order.

3. This Order shall be effective on and after the date of its approval.

ATTERHOLT, FREEMAN, HUSTON, WEBER, AND ZIEGNER CONCUR:

APPROVED: NOV 21 2017

I hereby certify that the above is a true and correct copy of the Order as approved.

Mary M. cerra ,, Secretary of the Commission

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STATE o/ INDIANA

INDIANA UTILITY REGULATORY COMMISSION 101 WEST WASHINGTON STREET, SUITE 1500 EAST

INDIANAPOLIS, INDIANA 46204-3419

November 1, 2017

Loraine Seyfried, Chief Administrative Law Judge Indiana Utility Regulatory Commission 101 W. Washington Street, Suite 1500 E Indianapolis, Indiana 46204-3407

www.in.gov/iurc Office: (317) 232-2701

Facsimile: (317) 232-6758

Re: Request to Rescind Order Regarding Underground Plant Protection Advisory Committee Case No. 15299, Order issued September 27, 2017

Dear Judge Seyfried:

As General Counsel of the Indiana Utility Regulatory Commission ("Commission"), I respectfully request that the Commission rescind its order regarding Case No. 15299 in the Order issued September 27, 2017, which upheld a finding of violation by the Commission's Pipeline Safety Division ("Division") and approved the recommendation of the Underground Plant Protection Advisory Committee ("UPP AC").

Ind. Code § 8-1-2-72 permits the Commission "at any time" to "rescind, alter, or amend any order fixing any rate or rates, tolls, charges, or schedules, or any other order made by the commission" after notice and opportunity to be heard. The UPP AC recently discovered a material change of fact that differed from the information known to the UPP AC at the time of the matter. Specifically, the UPP AC discovered that the respondent, Alt Construction, Inc. ("Alt Construction") did not have any prior violations at the time ofreview ofthis case. Generally, the UPP AC will recommend a warning letter for a first violation. In this matter, the UPP AC recommended penalty of training, based off a mistaken assumption that this was Alt Construction's second violation. The UPP AC wants to rescind this recommendation and recommend a penalty of warning letter, consistent with its Penalty Schedule (see Attachment A). The UPP AC recommends rescinding the Order (see Attachment B) so the UPP AC may modify its penalty recommendation.

Judge Seyfried Page2 November 1, 2017

Please see the timeline below for additional information:

10/23/16 Damage occurs.

7 /25/17 UPP AC recommends a penalty of training.

Post-7 /25/17 Alt Construction contacts UPP AC' s legal counsel to question the appropriateness of the penalty. Legal counsel agrees to discuss the matter with the UPPAC, but is unable to do so at the UPP AC' s next two meetings.

9/27 /17 IURC issues the Order approving the UPP AC' s recommended penalty of training.

10/4/17 Alt Construction follows up with UPPAC's legal counsel regarding the penalty.

10/24/16 UPP AC votes at its monthly meeting to request the case be reopened to recommend the proper penalty.

The bottom line is that it appears Alt Construction reasonably relied on UPP AC legal counsel to bring the penalty recommendation error to the attention of the UPP AC. Unfortunately, legal counsel did not bring this to the attention of the UPP AC prior to the case being approved by the IURC.

The Commission has the authority to reopen this matter, and it is my recommendation that the Commission open an investigation pursuant to Ind. Code 8-1-2.

Please contact me if you have any questions or if you need any additional information.

Sincerely, i /'.'.:

~~~ ~E.Heline

General Counsel Indiana Utility Regulatory Commission

Indiana Underground Plant Protection Advisory Committee

Penalty Schedule for violations of IC 8-1-26

Approved December 8, 2015 Effective January 1, 2016

Amended July 26, 2016 to remove a penalty escalation (see pg. 4)

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Purpose of this Document This is a guidance document to assist the Indiana Underground Plant Protection Advisory Committee ("Committee") in determining penalties under Indiana code chapter 8-1-26. It provides general principles for determining penalties. However, it is not meant to hinder case-by-case decision-making by the Committee based on specific facts of a case.

Guiding Principles for Penalty Schedule • The objective of this schedule is to ensure public safety.

• The focus will be to educate parties and encourage compliance, rather than being punitive.

• Penalties should be imposed in steps, with each step more severe.

• Each step should have a set penalty, with the Committee having the ability to consider a variety of factors that could increase or decrease the penalty. The Committee should have the ability to reduce penalties ifthe contractor or operator shows a strong commitment to compliance.

• The applicable step (in the penalty schedule) should be based on a certain timeframe in order to credit the firm for going a certain period without violations.

• The 12-month period used in the schedule is based on when the violation occurred, not when it was reported or when matter was referred to Committee.

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If a violation occurs at least 12 months after the previous violation, the schedule drops back to the third violation level unless there was only one prior violation; if so, the schedule drops back to the second violation. The schedule is structured so that there is a 30-day window of time after training is completed before additional penalties will accrue. The rationale is to give violators time to learn from the training before assessing additional penalties. Abuses of this should be minimal because where there is evidence of recklessness or concealment, there will be escalating $500 fines.

An entity with multiple locations and staff will be considered one entity for purposes of the penalty schedule. Entities will only be treated as separate if they can provide discreet federal ID numbers. Any entity that is currently treated as separate entities will be recombined and will continue at one step above the lowest penalty level the entity currently has or at the fourth violation level, whichever is lower.

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Homeowners and Tenants Pursuant to IC 8-l-26-16(g) [notice], IC 8-1-26-16(h) [white lining], and IC 8-l-26-20(b) [two (2) foot clearance], the maximum civil penalty is $10,000.

For all violations occurring prior to January 1, 2012 Warning letter Initial violations where date of damage is January 1, 2012 or later Warning letter3

Second and subsequent violation within 12 months of the previous $100, escalating by $100 for damage date each occurrence, considering

mitigating and aggravating circumstances

If a violation occurs at least 12 months after the previous violation, the schedule starts over (i.e. that violation is considered an initial violation).

Factors to consider that might warrant lesser penalties: • Level of culpability • Shows good faith effort to comply after notice of violation • Amount of damage or threat caused by noncompliance • Ability to pay • Other factors the Advisory Committee deems appropriate

Factors to consider that might warrant stronger penalties: • Recklessness • Physical injury • Property damage of over $10,000 • Failure to pay previous civil penalties or take required corrective action • Other factors the Advisory Committee deems appropriate

Per IC 8-l-26-23G), first time homeowner violators cannot be assessed a penalty of monetary penalties or a corrective action plan unless the violation "result[ ed] in physical harm to a person."

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Factors to consider that might warrant stronger penalties: • Recklessness • Physical injury • Property damage of over $10,000 • Failure to pay previous civil penalties or take required corrective action • Other factors the Advisory Committee deems appropriate

Operators Who Fail to Join the Association A warning letter shall be sent by the Committee to operators who have been identified as those who are required to but have not yet joined the Association, as required by IC 8-1-26-15. The letter will give the operator a window of approximately ninety (90) days to join the Association.

Pursuant to IC 8-1-26-15(d) [failure to join association], the maximum civil penalty is $100 per violation (one violation per day).

Failure to join within three (3) months of the due date in the warning letter $500 Failure to join within six ( 6) months of the due date in the warning letter $5,000 Failure to join within nine (9) months of the due date in the warning letter $10,000 Failure to join within twelve (12) months of the due date in the warning letter $21,000 Failure to join within fifteen (15) months of the due date in the warning letter, and $100 for every for each additional three (3) month period add'l day of

noncompliance

Other

Facility Locate Markings: Removal, Damage, or Alteration Pursuant to IC 8-1-26-18(h) [altering facility markings], the maximum civil penalty is $10,000.

Initial violation Warning letter4

Second violation within 12 months of the previous damage date $2,500 civil penalty Third violation within 12 months of the previous damage date $5,000 civil penalty Fourth and subsequent violations within 12 months of the previous damage $10,000 civil penalty date

If a violation occurs at least 12 months after the previous violation, the matrix starts over (i.e. that violation is considered an initial violation).

Note, per IC 8-l-26-23G), a first time violator who is a homeowner or tenant performing work on their own residential property outside an operator's easement or right of way cannot be issued a fine or corrective action plan unless the violation resulted in physical harm to a person, as defined in IC 8-1-26.

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Corrective Action Plan A corrective action plan is one that is developed to avoid future violations of IC 8-1-26. The plan should at minimum include the following:

• A listing of possible violations under IC 8-1-26.

• For each of the company's violations, steps that the company will take moving forward to avoid these violations. This should include but is not limited to written procedures, review of existing procedures, and employee discipline and/or training.

Each plan will be assigned to one member of the Committee for review and presentation to the entire Committee for approval. Should be developed and provided to the Committee for approval within 2 months. The plan should be fully implemented 4 months after that.

Long Term Plan At a minimum, the Committee will consider the following on an annual basis:

• Should the Committee consider the number or percentage of digs for excavators or locates for operators when applying the penalties (ex. Company A has 10 violations in 2012, and they did 10 digs. Company B has 10 violations in 2012, and they did 1,000 digs. Should they be treated the same?)

• Are the monetary penalties set at an appropriate level?

• Generally, do the penalties set out appear appropriate?

• Is there evidence that this schedule changed behavior in a positive way?

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STATE OF INDIANA

INDIANA UTILITY REGULATORY COMMISSION

IN THE MATTER OF AN ORDER ) APPROVING ADVISORY COMMITTEE ) APPROVED: SEP 2 7 2017 RECOMMENDATIONS PURSUANT TO ) INDIANA CODE CHAPTER 8-1-26. )

ORDER OF THE COMMISSION

Indiana Code chapter 8-1-26 provides the procedure for the Indiana Utility Regulatory Commission's Pipeline Safety Division ("Division") to find violations of said chapter. Upon review of those findings, the Indiana Underground Plant Protection Advisory Committee ("Advisory Committee") reviews those recommendations and recommends civil penalties ii1 the Case.

The Cases received pursuant to Indiana Code chapter 8-1-26 and ripe for Commission action are attached hereto and collectively refen-ed to as the Advisory Committee Recommendations.

Pursuant to statute, the Advisory Committee has submitted their recommendations to the Commission. The Commission hereby UPHOLDS the findings of violations by the Pipeline Safety Division and APPROVES the recommendations of the Advisory Committee as listed on the attached pages. The Assistant General Counsel to the Division is hereby directed to prepare and send notice to the parties advising them of the determination.

IT IS SO ORDERED.

ATTERHOLT, FREEMAN, HUSTON, WEBER, AND ZIEGNER CONCUR

APPROVED: SEP 2 7 2017

I hereby certify that the above is a true and correct copy of the Order as approved.

Indiana Underground Plant Protection Advisory Committee Recommendation to IURC

Respondent: Other Party: Case Number: Date of Advisory Meeting: Date of Damage:

Alt Construction, Inc Vectren Energy Delivery 15299 7/25/2017 10/23/2016

The IURC Pipeline Safety Division finds the following violation(s): IC 8-l-26-20(a)(2)

The Advisory Committee recommends the following penalty:

D Warning letter (Special instructions:)

D Clearance Zone

D Damaging Lines

D Dig Tickets

D Demolitions

D Failure to Plan

D Potholing

D Probing

D Self-Repair

D Using Stakes or Post Hole Diggers

D White Lining

~ Training or $5,000 civil penalty if fail to complete training

D Civil penalty of $1,000

D Civil penalty of $1,500, can mitigate $1,500 by completing training and corrective action plan

D Civil penalty of$ ____________________ _

D ·Other -------------------------~

Abstentions:

APPROVED: Ben Warren Chairman