4 Colo. Code Regs. § 723-11-11501

Current through Register Vol. 47, No. 17, September 10, 2024

Section 4 CCR 723-11-11501 - Violations - Civil Penalties

(a) This rule shall apply to violation(s) that would have otherwise been discovered by a prudent operator in the normal course of business. This is the lowest degree of culpability for which operators may be penalized and does not limit the Commission from penalizing operators for higher degrees of culpability.

(b) An operator who violates these rules or an order of the Commission issued under these rules may be subject to civil penalties as follows:

(I) civil penalties shall not exceed $200,000 per instance of violation;

(II) each day of a continuing violation constitutes a separate instance of violation; and

(III) in the case of a group or series of related violations, the aggregate amount of such penalties shall not exceed $2,000,000.

(c) Civil penalties - general. The PSP Chief may propose that the Commission assess civil penalties against an operator following a PSP inspection and/or investigation that has established specific pipeline safety rule violation(s) and a time-dependent or time-independent nature of the violations(s).

(d) Civil penalties - calculation. To provide consistency and specificity, civil penalties shall be calculated through the formulaic method as follows.

(I) Time-dependent/history based activity violations.

(A) Violations determined by an action or activity not performed or failure to be performed in accordance with rule or procedure:

(i) the penalty is assessed by individual action or activity required by rule or procedure;

(ii) the penalty amount is calculated by the equation:

B x t x F_ph x F_hh x F_i,

where:

B = Base penalty of $1 per day for the activity associated with the violation

t = Timeframe of non-compliance, in days

F_ph = Pertinent/related system history factor, as determined in the Time-Dependent Violation Impact Factor Table

F_hh = Hazardous history factor, as determined in the Time-Dependent Violation Impact Factor Table

F_i = Incident history factor, as determined in the Time-Dependent Violation Impact Factor Table

(B) Time-dependent violation impact factor table:

Time-Dependent Violation Impact Factor Table
FACTOR	THRESHOLD	Factor multiplier if threshold NOT met	Factor multiplier if threshold met
Fph	The violation was associated with other inspection findings that indicated related effects on pipeline system integrity (e.g., leaks, corrosion, PHMSA Advisory Bulletin, missing records, etc.)	1	5
Fhh	The violation was associated with other inspection findings that indicated related effects on public safety (e.g., hazardous leaks, safety-critical activity, safety-related condition, etc.)	1	10
Fi	The violation was associated with other inspection findings that indicated the violation contributed to an Incident	1	20

(II) Time-independent/outcome-based violations.

(A) Violations determined by a failure to follow or inadequate/missing operator procedures:

(i) the penalty is assessed by individual or group actions or activities required by rule or procedure;

(ii) the penalty amount is calculated by the equation:

B x F_impact, where

B = $5,000 base penalty per instance of violation

F_impact = Time-independent Impact Factor as determined in the Time-Independent Violation Impact Factor Table

(B) Violations determined by an unqualified worker performing operations, maintenance, or construction tasks:

(i) the penalty is assessed per worker and specific individual qualification required by rule or procedure; and

(ii) the penalty amount is calculated by the equation:

B x F_impact, where

B = $5,000 base penalty per instance of violation

F_impact = Time-independent Impact Factor as determined in the Time-Independent Violation Impact Factor Table

(C) Rule 11201 violations:

(i) the penalty is assessed per applicable paragraph of rule 11201;

(ii) the penalty amount is calculated by the equation:

B x F_impact, where:

B = $5,000 base penalty per instance of violation

F_impact = Time-independent Impact Factor as determined in the Time-Independent Violation Impact Factor Table

(D) Missing or incomplete records:

(i) the penalty is assessed by grouped action or activity required by rule or procedure;

(ii) the penalty is assessed by applicable inspection focus, i.e., district operating area, operating unit, or total operator system;

(iii) the penalty is calculated based on the estimated volume of missing or incomplete records:

(1) Gross Incompletion (Record incompletion/absence >= 10 percent for complete record absence for a required code segment) = $10,000/code/segment/calendar year;

(2) Major Incompletion (Record incompletion/absence >= 5 percent and < 10 percent for a required code segment) = $5,000/code/segment/calendar year; and

(3) Significant Incompletion (Record incompletion/absence >= 2 percent and < 5 percent for a required code segment) = $2,500/code/segment/calendar year.

(E) Time-independent violation impact factor table:

Time-Independent Violation Impact Factor Table
THRESHOLD	Factor multiplier if threshold met
The violation resulted in no immediate safety impact	1
The violation resulted in operator endangerment; operator property loss > $10,000; or emergency (versus precautionary) actions by the operator necessary to protect system integrity	5
The violation resulted in public endangerment; non-operator property loss > $10,000; or a loss of pipeline integrity	10
The violation resulted in an Incident	20

(e) Multiple calculated penalties will be summed to compute a final civil penalty.

(f) The PSP Chief may propose to the Commission the assessment of a revised final civil penalty lower than the summed calculated penalties based on the operator's documented and verifiable efforts to mitigate the violations(s) and improve overall system safety and integrity.

(g) The calculated and final civil penalty amounts shall be illustrated in the NPV to the operator.

(h) Nothing in this rule shall prohibit the Commission from the calculation and/or assessment of a new final civil penalty during a formal hearing process.

(i) The Commission may assess doubled or tripled civil penalties against any public utility, as provided by § 40-7-113.5(3), C.R.S., § 40-7-113.5(4), C.R.S., and this rule.

(I) The Commission may assess any public utility a civil penalty containing doubled penalties only if:

(A) the public utility has admitted liability by paying the proposed final civil penalty for, or has been adjudicated by the Commission in an administratively final written decision to be liable for, engaging in prior conduct that constituted an intentional violation of a statute in Articles 1 to 7 and 15 of Title 40, C.R.S., a Commission rule, or a Commission order;

(B) the conduct for which doubled civil penalties are sought violates the same statute, rule, or order as conduct for which the public utility has either admitted liability by paying the civil penalty assessment, or been adjudicated by the Commission in an administratively final written decision to be liable; and

(C) the conduct for which doubled civil penalties are sought occurred within one year after conduct for which the public utility has either admitted liability by paying the civil penalty assessment, or been adjudicated by the Commission in an administratively final written decision to be liable.

(II) The Commission may assess any public utility a civil penalty containing tripled penalties only if:

(A) the public utility has admitted liability by paying the proposed final civil penalty for, or has been adjudicated by the Commission in an administratively final written decision to be liable for, engaging in prior conduct that constituted two or more intentional violations of a statute in Articles 1 to 7 and 15 of Title 40, C.R.S., a Commission rule, or a Commission order;

(B) the conduct for which tripled civil penalties are sought violates the same statute, rule, or order as conduct for which the public utility has either admitted liability by paying the civil penalty assessment, or conduct for which the public utility has been adjudicated by the Commission in an administratively final written decision to be liable, in at least two prior instances; and

(C) the conduct for which tripled civil penalties are sought occurred within one year after the two most recent instances of conduct for which the public utility has either admitted liability by paying the civil penalty assessment, or been adjudicated by the Commission in an administratively final written decision to be liable.

4 CCR 723-11-11501

44 CR 04, February 25, 2021, effective 3/17/2021

47 CR 09, May 10, 2024, effective 5/30/2024