1. South Dakota Gas Pipeline Safety Program 2011 Summary

2. State Program General Number of operators – 2011 year end total13 – # of additions since 2010 1 – # of deletions since 2010 1 – Comments Number of inspectors – 2011 year end total 1.1 – Change from year end 2010 0

3. Program Operational Overview 2 inspectors: Josh 85 %, Nathan 28 % inspector, 72 % Program Manager 85 inspection days per year required, 126 in 2011 Complete regulation review once every two years Year 1 (2011): corrosion, patrolling, leak surveys, OQ, TIMP Year 2 (2012): welding, fusion, drug and alcohol, DIMP, PA

4. Covered Operators (13) Municipals Crooks Municipal Gas Garretson Municipal Gas Humboldt Municipal Gas Watertown Municipal Gas Private Distribution Mid-American Energy Montana-Dakota Utilities Northern Natural Gas NorthWestern Energy Transmission Basin Groton CT Pipeline Basin Deer Creek Black Hills Power Montana-Dakota Utilities NorthWestern Energy South Dakota Intrastate Pipeline Sioux Falls Sanitary Landfill Gas Pipeline Xcel Angus Anson Pipeline

5. 2010 Year End Gas Statistics for South Dakota Gas transmission mileage 222 Gas distribution mileage 4,483 Number of gas services 202,990

6. SD Gas Distribution Federal Reportable Incident Summary 1998 – 2011 YearNumberFatalitiesInjuriesProperty Damage 2004100$110,266 2007200$696,630 2008100$150,000 20090000 20100000 20110000

7. Enforcement Statistics 2011 NPV & Warnings Cited215 NPV & Warnings Corrected67 NPV & Warnings Outstanding at Year End148 Number fines levied0* Amount of Fine0* *2 penalty dockets opened in 2011– fines assessed in 2012: $800 & $2,000

8. Declaratory Ruling - Pipeline Classification It is possible to have a transmission line under 20 % SMYS. A distribution center begins at the location of title transfer. A pipeline feeding a large volume customer is no longer distribution if it is < 20 % SMYS but must be downstream of a distribution center to be distribution. This could affect operators that may in the future have a large volume customer tapped into an interstate transmission line at a point other than a distribution center with a line operating at < 20 % SMYS. In such a case, this may now possibly be transmission rather than distribution.

9. Major Construction Activity None System expansion activity in distribution systems No new transmission lines

10. Special Permits Requested / Granted None in 2011

11. 2011 Highlights Completed TIMP Protocol A inspections on all transmission operators Completed 5 public awareness inspections with new form Completed 5 DIMP inspections Josh Williams completed majority of training for new inspectors Made recommendation to implement mandatory damage reporting Conducted 3 construction inspections Participated on federal/state DIMP implementation team Coordinated and led a joint multi state DIMP inspection

12. 2011 Highlights Continued Completed comprehensive OQ plan and field audits on all operators Inspected all operators in following areas: – Corrosion and cathodic protection – Line markers – Patrolling – Leakage surveys – Emergency valves – Excess flow valves – Pipe on structures

13. Pipeline Program Metrics 2010

14. 2012 Outlook Cast iron/bare steel replacement begins in Sioux Falls One Call Board decision on supporting mandatory damage prevention Records Inspections: – reporting requirements and emergency plans – test requirements – welding and fusion – damage prevention – MAOP, regulator and relief valves Drug and alcohol inspections – Plan and operator records – Provider site inspections

15. 2012 Outlook Continued New regulations – Finish DIMP inspections – Begin Control Room Management inspections – Finish Public Awareness inspections with new form – Training - Webinar on Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 Inspector Training: – Complete 3 remaining T & Q courses by pipeline staff – Inspector training outside of T&Q Courses (NACE certification, IMP, etc.) Operator Training: – Hold quarterly operator training webinars – Preparations to host 2013 Pipeline Safety Operator Training Seminar