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ARCHIVED – Administrative Monetary Penalty – Enbridge Pipelines Inc. – AMP-002-2015

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Administrative Monetary Penalty – Enbridge Pipelines Inc. – AMP-002-2015 [PDF 54 KB]

NOTICE OF VIOLATION

REFERENCE NUMBER: AMP-002-2015

Information for Pipeline Company / Third Party / Individual:

Information for Pipeline Company / Third Party / Individual
Name: Enbridge Pipelines Inc.
Contact: Guy Jarvis
Title: President
Address: 425 - 1st Street SW
City: Calgary
Province / State: Alberta
Telephone: Information not available
Fax: Information not available
E-mail: Information not available

TOTAL PENALTY AMOUNT:
16,000

Date of Notice:
6 February 2015

Regulatory Instrument #:
XO-E101-006-2014

On 10 October 2014 Enbridge Pipelines Inc. was observed to be in violation of a NEB regulatory requirement. This violation is subject to an administrative monetary penalty, as outlined below.

1. VIOLATION DETAILS

Date of Violation:
from: 10 October 2014 to: 10 October 2014
Total Number of Days: 1

Has compliance been achieved?

 X Yes

  No

If no, a subsequent NoV may be issued.

Location of Violation:

e.g. Facility/plant/head office or nearest geographical point
Edmonton to Hardisty Pipeline Project, Alberta

Short Form Description of Violation
(Refer to Schedule 1 of the AMP Regulations)

Provision and Short-form Description


  
Contravention of an Order or Decision made under the Act (ss. 2(2) of the AMP Regulations)
 X 

Failure to comply with a term or condition of any certificate, licence, permit, leave or exemption granted under the Act (ss. 2(3) of the AMP Regulations)

Condition 2 of XO-E101-006-2014

2. RELEVANT FACTS

Briefly describe reasonable grounds to believe a violation has occurred

1. On 16 April 2014, the National Energy Board (NEB or Board) issued Certificate OC-062 (Certificate) (A3V9D6) for the Enbridge Pipelines Inc. Edmonton to Hardisty Pipeline Project (Project). Condition 2 of the Certificate states: "Enbridge shall cause the approved Section 52 Facility to be designed, located, constructed and operated in accordance with the specifications, standards, and other information referred to in its Application, and as otherwise agreed to during questioning or in its related submissions."

2. From 6-10 October 2014, NEB inspectors conducted an inspection (Inspection) of Enbridge's Edmonton to Hardisty Spread 1 and Spread 2. NEB inspectors identified non-compliances to the NEB OPR sections 4(2), 15 and 54. Inspectors found the pipe specifications of the pipe being installed on mainline construction did not match Schedule A of certificate OC-062 (A3V9D6). The minimum wall thickness in the certificate is stated as 11.8 mm, however inspectors noted the pipe being installed had only a 10.9 mm wall thickness. These changes were implemented without Enbridge requesting approval from the Board. Enbridge had not requested a variance at the time of the Inspection. In response to the non-compliances, Enbridge committed to submitting a Request for Variance to the Board.

3. As a result of the Inspection, NEB inspectors issued a Notice of Non-Compliance (NNC) to Enbridge for failure to comply with the OPR and Schedule A of the Certificate in ensuring the pipeline was designed and constructed as approved by the Board (828378).

4. On 17 October 2014, Enbridge submitted an application vary Certificate OC-062 requesting modifications to certain Project specifications, including those in respect of pipeline wall thickness (A63599). In its variance application, Enbridge acknowledged its non-compliance with Conditions 1 and 2 of the Certificate regarding wall thickness changes. In accounting for these changes, Enbridge cited refinements to design parameters made in the initial engineering phase of the Project, resulting in modification to the pipe specifications provided in the Project Application.

5. From 24 October to 5 December 2014, NEB engineers requested a series of informal Information Requests with Enbridge in order to clarify the requested variances to the original pipeline specifications contained in the Certificate (834091).

6. On 23 January 2015, the Board approved the requested variance of the Certificate and issued Amending Order AO-001-OC-062. The Board advised Enbridge Governor in Council approval would be required to finalize the variance. The Board noted in its letter that timing of the request for variance raised compliance concerns and informed Enbridge the matter would be referred to the Board's Senior Enforcement Officer for separate review.

3. PENALTY CALCULATION

(a) BASELINE PENALTY (Gravity Value = 0)

(a) BASELINE PENALTY (Gravity Value = 0)
Category Individual Any Other Person
(Type A)    $1,365    $5,025
(Type B)    $10,000  X  $40,000

[Refer to AMP Regulations, Subsection 4(1)]

(b) APPLICABLE GRAVITY VALUE

[Refer to AMP Regulations, Subsection 4(2)]

Mitigating Aggravating
-2 -1 0 +1 +2 +3
   Other violations in previous seven (7) years -- --          --
 
   Any competitive or economic benefit from violation -- --          --
 
   Reasonable efforts to mitigate / reverse violation’s effect                --
 
   Negligence on part of person who committed violation -- --          --

 

 X  Reasonable assistance to Board with respect to violation     X           --

When Enbridge was notified by NEB inspectors of the non-compliance, Enbridge agreed to submit a request for variance to the Certificate and responded to various information requests from the Board in order to clarify the considerations that went into making the design changes.

 X  Promptly reported violation to Board           X     --

Enbridge failed to report changes to project specifications around wall thickness to the NEB. NEB inspectors noted the non-compliance while conducting a field inspection on 6-10 October 2014.

 X  Steps taken to prevent reoccurrence of violation  X              --

Enbridge management has provided an explanation of the events that led to the non-compliance and has committed to developing new procedures to in order to prevent a similar reoccurrence. Enbridge has also indicated that a more fulsome review of its compliance tracking process is already underway, which could result in additional process improvements.

   Violation was primarily reporting / record-keeping failure          -- -- --
 
   Any aggravating factors in relation to risk of harm to people or environment -- --            
 
(c) TOTAL GRAVITY VALUE
-2

(d) DAILY PENALTY
(The baseline penalty, adjusted for the final gravity level)

$ 16,000

(e) NUMBER OF DAYS OF VIOLATION
(If more than one day, then the justification must be provided.)

1

Notes to explain decision to apply multiple daily penalties, or "Not Applicable"

Not Applicable

4. TOTAL PENALTY AMOUNT

$ 16,000

Note: The total penalty amount shown is based on the period described in Step 1 above. If compliance has not been achieved, a subsequent Notice of Violation may be issued.

5. DUE DATE

(30 days from receipt of Notice of Violation)
8 March 2015

Notes

You have the right to make a request for a review of the amount of the penalty or the facts of the violation, or both, within 30 days after the Notice of Violation was received.

If you do not pay the penalty nor request a review within the prescribed period, you are considered to have committed the violation and you are liable for the penalty set out in the Notice of Violation. The penalty is due on the date indicated above.

The unpaid penalty amount is a debt due to the Crown and may be recovered by collection procedures stipulated in the Financial Administration Act.

The information regarding the violation may be posted on the NEB website:

  1. 30 days from the date this Notice of Violation was received or;
  2. upon issuing a decision following a Request for Review.

To Make Payment:

You may remit your fee payment by Electronic Funds Transfer (EFT) or by cheque payable to the order of Receiver General for Canada.

EFT payments can be arranged by contacting the Director of Financial Services, Monday to Friday, from 09:00 to 16:00 Mountain Time:

Telephone: 403-606-0779 / 800-899-1265
Fax: 403-292-5503 / 877-288-8803

Cheques should be made out to the "Receiver General for Canada" and mailed to:

National Energy Board
Attention: Finance
Centre 10, 517 – 10th Avenue SW
Calgary, Alberta
T2R 0A8

Your completed Payment form should be enclosed with your payment.

To Request a Review

Pursuant to the NEB Act, Section 144, you may file a request for a review of this Notice of Violation by the Board.

The date of filing is the date on which the document is received, as indicated by the date on an e-mail submission or the stamped on the document by a NEB employee.

If you elect to make a request for a review, complete and submit the attached Request for Review form to:

Administrative Monetary Penalty - Reviews
National Energy Board Centre 10, 517 – 10th Avenue SW
Calgary, Alberta
T2R 0A8

For more information on reviews, please see the Administrative Monetary Penalties Process Guide available on the NEB's website.

Sincerely,

Robert Steedman

Designated Officer
Administrative Monetary Penalties

Date modified: