BILL NUMBER: AB 56 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 29, 2011
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MAY 18, 2011
AMENDED IN ASSEMBLY MARCH 16, 2011
AMENDED IN ASSEMBLY FEBRUARY 23, 2011
INTRODUCED BY Assembly Member Hill
DECEMBER 6, 2010
An act to add Sections 746, 770.5, and 770.6 to
Section 770.6 to, and to add Chapter 4.5 (commencing with
Section 950) to Part 1 of Division 1 of, the Public Utilities
Code, relating to gas corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 56, as amended, Hill. Gas corporations: rate recovery and
expenditure: intrastate pipeline safety.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities. Existing law authorizes
the commission to fix the rates and charges for every public utility,
and requires that those rates and charges be just and reasonable.
This bill would prohibit a gas corporation from recovering any
fine or penalty in any rate approved by the commission. The bill
would require a gas corporation to file semiannual reports
with the commission and the Division of Ratepayer Advocates
describing how the utility is spending moneys that the commission has
authorized to be collected from ratepayers to reimburse the utility
for public safety activities. The bill would require the commission,
in consultation with the commission's Division of Ratepayer
Advocates, to work to align ratemaking policies, practices, and
incentives to better reflect safety concerns and ensure ongoing
commitments to public safety gas transmission and
storage safety reports with the c ommission's consumer
protection safety division that include certain matter and require
that if the division determines that there is a deficiency in a gas
corporation's prioritization or administration of the storage or
pipeline capital projects or operation and maintenance activities, to
bring the deficiency to the commission's immediate attention .
If the commission authorizes a gas corporation to recover expenses
incurred for public safety, the bill would require the commission to
require the gas corporation to establish and maintain a balancing
account to record the difference between the approved revenue
requirements for public safety and the actual expenditures made by
the utility. The bill would require a gas corporation to return
moneys approved for expenditure for public safety by the commission
to the balancing account, if those funds are not expended within a
reasonable period of time after the commission grants approval of the
public safety expenditure, as determined by the commission. The bill
would require the commission to consider the safety record of a gas
corporation in determining what constitutes a reasonable rate of
return for the utility.
(2) The Public Utilities Act authorizes the commission to
ascertain and fix just and reasonable standards, classifications,
regulations, practices, measurements, or service to be furnished,
imposed, observed, and followed by specified public utilities,
including gas corporations, as defined.
Existing federal law requires the United States Department of
Transportation Pipeline and Hazardous Materials Safety Administration
(PHMSA) to adopt minimum safety standards for pipeline
transportation and for pipeline facilities, including an interstate
gas pipeline facility and intrastate gas pipeline facility, as
defined. Existing law authorizes the Secretary of Transportation to
prescribe or enforce safety standards and practices for an intrastate
pipeline facility or intrastate pipeline transportation to the
extent that the safety standards and practices are regulated by a
state authority that submits to the secretary annually a
certification for the facilities and transportation or alternatively
authorizes the secretary to make an agreement with a state authority
authorizing it to take necessary action to meet certain pipeline
safety requirements. Existing law prohibits a state authority from
adopting or continuing in force safety standards for interstate
pipeline facilities or interstate pipeline transportation. Existing
law authorizes a state authority that has submitted a current
certification to adopt additional or more stringent safety standards
for intrastate pipeline facilities and intrastate pipeline
transportation only if those standards are compatible with the
minimum standards prescribed by PHMSA.
This bill would designate the commission as the state authority
responsible for development, submission, and administration of a
state pipeline safety program certification for natural gas
pipelines. The bill would require the commission to adopt
and enforce compatible safety standards, as defined, for
commission-regulated gas pipeline facilities, as defined, to
accomplish specified results. The bill would require the commission
to track proposed safety, reliability, and facility integrity-related
projects and activities for which a gas corporation requested
compensation in any rate request that was granted by the commission
in order to determine if the project or activity was undertaken and
completed and to require any gas corporation that fails to undertake
or complete safety, reliability, and facility integrity-related
projects and activities for which the commission granted recovery in
rates to promptly make a public filing as to the justification for
failing to undertake or complete the proposed project or activity
, in consultation with a specified independent review
panel, to develop minimum criteria and standards for the installation
of sectionalized block valves and automated and remote shutoff
valves and to establish a timeline by which the owner or operator of
a commission-regulated gas pipeline facility, as defined, is
required to meet the minimum criteria and standards. The bill
would require each gas corporation to prepare and submit to the
commission a proposed comprehensive pressure testing implementation
plan that includes specified elements and require that, at the
conclusion of an implementation period, all intrastate
transmission line segments meet specified requirements .
The bill would require the commission, by July 1, 2012, to open an
appropriate proceeding or expand the scope of an existing proceeding
to establish compatible emergency response standards, as defined,
that owners or operators of certain commission-regulated gas pipeline
facilities , as defined, would be required to
follow. The standards would require owners or operators of intrastate
transmission and distribution lines to implement emergency response
plans, with specified requirements, that are compatible with PHMSA's
regulations concerning emergency plans. The bill would require the
owners of intrastate transmission lines to provide the State Fire
Marshal and the chief fire official of the applicable local
government with instructions on how to access and utilize the
National Pipeline Mapping System developed by PHMSA to improve local
response capabilities for pipeline emergencies. The bill would
require the commission to report to the Legislature on the status of
establishing the compatible emergency response standards on or before
January 1, 2013.
(3) Under existing law, a violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
(4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 746 is added to the Public
Utilities Code, to read:
746. (a) A gas corporation shall not recover any fine or penalty
in any rate approved by the commission.
(b) A gas corporation shall file semiannual reports with the
commission and the Division of Ratepayer Advocates describing how the
utility is spending moneys that the commission has authorized to be
collected from ratepayers to reimburse the utility for public safety
activities.
(c) The commission, in consultation with the Division of Ratepayer
Advocates, shall work to align ratemaking policies, practices, and
incentives to better reflect safety concerns and ensure ongoing
commitments to public safety.
(d) If the commission authorizes a gas corporation to recover
expenses incurred for public safety, the commission shall require the
gas corporation to establish and maintain a balancing account to
record the difference between the approved revenue requirements for
public safety and the actual expenditures made by the utility. A gas
corporation shall return moneys approved for expenditure for public
safety by the commission, to the balancing account, if those funds
are not expended within a reasonable period of time after the
commission grants approval of the public safety expenditure, as
determined by the commission.
(e) In determining what constitutes a reasonable rate of return,
the commission shall consider the safety record of the gas
corporation.
SEC. 2. Section 770.5 is added to the Public
Utilities Code, to read:
770.5. (a) For purposes of this section the following terms have
the following meanings:
(1) "Class 1 location," "class 2 location," "class 3 location,"
and "class 4 location" have those meanings as defined in the
regulations adopted by the United States Department of Transportation
pursuant to Chapter 601 (commencing with Section 60101) of Subtitle
VIII of Title 49 of the United States Code (49 C.F.R. 192.5, as
adopted January 1, 2011, or a successor regulation).
(2) "Commission-regulated gas pipeline facility" means an
intrastate gas pipeline facility, as defined in Section 60101 of
Title 49 of the United States Code and in the regulations adopted by
the Department of Transportation (49 C.F.R. 192.3, as adopted October
1, 2010, or a successor regulation), that transports natural gas and
is subject to the regulatory authority of the commission, including
a pipeline that the commission, pursuant to subsection (c) of Section
717 of Title 15 of the United States Code, has certified to the
Federal Energy Regulatory Commission as being subject to the
regulatory jurisdiction of the commission over rates and service.
"Commission-regulated gas pipeline facility" does not include those
pipelines that are excluded from regulation by the Federal Energy
Regulatory Commission pursuant to subsection (b) of Section 717 of
Title 15 of the United States Code because they are facilities used
for the distribution of natural gas.
(3) "Compatible safety standards" means additional or more
stringent safety standards for commission-regulated gas pipeline
facilities that are compatible with the minimum safety standards
adopted by the Department of Transportation pursuant to Chapter 601
(commencing with Section 60101) of Subtitle VIII of Title 49 of the
United States Code and which the commission is authorized to adopt
pursuant to subsection (c) of Section 60104 of that chapter.
(4) "High consequence area" has the same meaning as defined in the
regulations adopted by the United States Department of
Transportation pursuant to Chapter 601 (commencing with Section
60101) of Subtitle VIII of Title 49 of the United States Code (49
C.F.R. 192.903, as adopted January 1, 2011, or a successor
regulation).
(b) The commission shall be the state authority responsible for
the development, submission, and administration of a state pipeline
safety program certification for natural gas pipelines pursuant to
Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title
49 of the United States Code.
(c) The commission shall adopt and enforce compatible safety
standards for commission-regulated gas pipeline facilities to
accomplish all of the following:
(1) Require the owner or operator to make an annual performance
measure report to the commission concerning the condition of
commission-regulated gas pipeline facilities. The performance measure
report shall include the total number of anomalies identified as a
result of safety assessments, the total number of conditions
repaired, and the actual anomalies needing repair that are identified
by the pipeline owner or operator during the inspections, the
conditions requiring repair, and any other information the commission
determines is necessary to evaluate the safety and performance of
the pipeline facilities. The annual performance measure reports shall
be made publicly available on the Internet to the extent that doing
so does not create a public safety risk. The commission shall consult
with the federal Department of Homeland Security in determining what
information may be made available without creating a public safety
risk.
(2) Require the owner or operator to evaluate the integrity of all
commission-regulated gas pipeline facilities outside high
consequence areas and to include this evaluation as part of their
safety assessment reports.
(3) Require the owner or operator of commission-regulated gas
pipeline facilities to conduct outreach and public education relative
to excavation dangers and the availability of the one-call
notification program in order to reduce dangerous incidences caused
by third-party excavations.
(4) Require the owner or operator of commission-regulated gas
pipeline facilities to prioritize those facilities that, because of
their proximity to an earthquake fault zone delineated by the State
Geologist pursuant to the Alquist-Priolo Earthquake Fault Zoning Act
(Chapter 7.5 (commencing with Section 2621) of Division 2 of the
Public Resources Code), should be subject to heightened safety
oversight. The commission shall develop protocol to ensure the safety
of those pipelines that are located in an earthquake fault zone and
in a high consequence area.
(5) The commission, in consultation with the independent review
panel appointed to investigate the San Bruno natural gas pipeline
explosion of 2010, shall develop minimum criteria and standards for
the installation of sectionalized block valves and automated and
remote shutoff valves, taking into consideration weather-related and
outside faces, operating pressure, the rate of potential release of
natural gas, the potential for ignition of the gas, and
accessibility. The commission shall establish a timeline by which the
owner or operator of a commission-regulated gas pipeline facility
shall meet the minimum criteria and standards established by the
commission, unless technically unfeasible, for each of the following:
(A) Each commission-regulated gas pipeline facility that is first
placed in service or replaced.
(B) Each commission-regulated gas pipeline facility that traverses
an earthquake fault zone designated by the State Geologist pursuant
to the Alquist-Priolo Earthquake Fault Zoning Act (Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code).
(C) Each commission-regulated gas pipeline facility that is in a
class 3 location, class 4 location, or high consequence area.
(6) Require the owner or operator of all commission-regulated gas
pipeline facilities that are in a class 3 location, class 4 location,
or high consequence area to establish a maximum allowable operating
pressure for the facility. The maximum allowable operating pressure
shall be established by conducting a hydrostatic pressure test,
unless the commission determines that the owner or operator has
adequately established a maximum allowable operating pressure using
either of the following:
(A) Prior hydrostatic testing.
(B) Thorough documentation, including as-built drawings, alignment
sheets and specifications, design, construction, testing, and
maintenance records, demonstrating that the maximum allowable
operating pressure has been accurately established based on the
weakest pipeline section or facility component.
(7) Require owners and operators of commission-regulated gas
pipeline facilities to complete, by January 1, 2022, a modernization
program to upgrade key facilities located in high consequence areas.
The commission shall consult with owners and operators and interested
stakeholders in developing the program requirements and schedule.
The program shall contain criteria for prioritizing critical gas
pipeline facilities and ensure that all upgraded facilities can
accommodate state-of-the-art inspections, including internal
corrosion inspection methods. It is the intent of the Legislature
that state agencies expedite any necessary permit work or approval
that is necessary for any demolition, construction, repair,
replacement, inspection, or testing activity that may be required
pursuant to this paragraph.
(d) The commission shall adopt and enforce a one-call notification
program for the state consistent with the requirements adopted by
the Department of Transportation pursuant to Chapter 601 (commencing
with Section 60101) of Subtitle VIII of Title 49 of the United States
Code.
(e) The commission shall track proposed safety, reliability, and
facility integrity-related projects and activities for which a gas
corporation requested compensation in any rate request that was
granted by the commission in order to determine if the project or
activity was undertaken and completed. The commission shall require
any gas corporation that fails to undertake or complete safety,
reliability, and facility integrity-related projects and activities
for which the commission granted recovery in rates to promptly make a
public filing as to the justification for failing to undertake or
complete the proposed project or activity.
(f) In its general rate case, a gas corporation shall demonstrate,
to the satisfaction of the commission, each of the following:
(1) That its proposed rates will be sufficient to enable the gas
corporation to fund those projects and activities necessary to
maintain safe and reliable service and to meet federal and state
safety requirements in a cost-effective manner.
(2) If rate recovery was previously approved by the commission for
safety-related projects or activities, and the gas corporation seeks
to reprioritize use of the moneys for other safety-related projects
or activities, that the reprioritization is based on sound risk
management principles.
(3) If rate recovery is sought for safety-related projects or
activities, that an adequate safety assessment has been undertaken on
the gas pipeline facilities on which the projects or activities are
to be undertaken so that the projects and activities can be
undertaken in a thorough, yet cost-effective, manner without
incurring cost overruns.
(4) That any settlement agreement filed in the case that
encompasses safety-related projects or activities identifies those
projects and activities with specificity and allocates funding for
those projects and activities on a project-by-project, or
activity-by-activity basis.
SEC. 3. SECTION 1. Section 770.6 is
added to the Public Utilities Code, to read:
770.6. (a) For purposes of this section, the following terms have
the following meanings:
(1) "Commission-regulated gas pipeline facility" has the same
meaning as defined in Section 770.5 950
.
(2) "Compatible emergency response standards" means emergency
response standards that are applicable to intrastate transmission and
distribution lines that are in addition to, or more stringent than,
the minimum safety standards adopted by the United States Department
of Transportation pursuant to Chapter 601 (commencing with Section
60101) of Subtitle VIII of Title 49 of the United States Code and
that the commission is authorized to adopt pursuant to Section 60104
(c) of that chapter.
(b) On or before July 1, 2012, the commission shall open an
appropriate proceeding or expand the scope of an existing proceeding
to establish compatible emergency response standards that owners or
operators of commission-regulated gas pipeline facilities shall be
required to follow for intrastate transmission and distribution
lines. The commission shall establish the standards to ensure that
intrastate transmission and distribution lines have emergency
response plans that adequately prepare them for a natural disaster or
malfunction that could cause injury to human life or property, with
the purpose of minimizing the occurrence of both.
(c) The commission shall establish the compatible emergency
response standards in consultation with the California Emergency
Management Agency and members of California's first responder
community, including, but not limited to, members of the California
Fire Chiefs Association.
(d) The compatible emergency response standards shall require
owners or operators of intrastate transmission and distribution lines
to implement emergency response plans that are compatible with the
United States Department of Transportation Pipeline and Hazardous
Materials Safety Administration's regulations concerning emergency
plans contained in Section 192.615 of Title 49 of the Code of Federal
Regulations, and those plans shall include, but not be limited to,
all of the following requirements:
(1) Emergency shutdown and pressure reduction shall be utilized
whenever deemed necessary and appropriate by the owners or operators
to minimize hazards to life or property. An owner or operator shall
notify appropriate first responders of emergency shutdown and
pressure reduction.
(2) During an emergency response effort, the incident commander
may direct coordination between first responders and owners or
operators to ensure timely and ongoing communication on decisions for
emergency shutdown and pressure reduction.
(3) Owners or operators of intrastate transmission and
distribution lines shall establish and maintain liaison with
appropriate fire, police, and other public officials to do all of the
following:
(A) Learn the responsibility and resources of each government
organization that may respond to a gas pipeline emergency, including,
but not limited to, the role of the incident commander in an
emergency.
(B) Acquaint the officials with the owner's or operator's ability
in responding to a gas pipeline emergency.
(C) Identify the types of gas pipeline emergencies of which the
owner or operator notifies the officials.
(D) Plan how the owner or operator and officials can engage in
mutual assistance to minimize hazards to life or property, or both.
(E) Identify and update information on individual personnel
responsible for the liaison with the appropriate first responder
organizations.
(4) Owners and operators of intrastate transmission lines shall
provide the State Fire Marshal and the chief fire official of the
applicable city, county, city and county, or fire protection district
with instructions on how to access and utilize the National Pipeline
Mapping System developed by the United States Department of
Transportation, Pipeline and Hazardous Materials Safety
Administration, utilizing data submitted pursuant to Section 60132 of
Title 49 of the United States Code, to improve local response
capabilities for pipeline emergencies.
(e) (1) The commission shall report to the Legislature on the
status of establishing the compatible emergency response standards on
or before January 1, 2013.
(2) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 2. Chapter 4.5 (commencing with Section 950)
is added to Part 1 of Division 1 of the Public Utilities
Code , to read:
CHAPTER 4.5. GAS PIPELINE SAFETY
Article 1. General
950. For purposes of this chapter, the following terms have the
following meanings:
(a) "Class 1 location," "class 2 location," "class 3 location,"
and "class 4 location" have the same meanings as defined in the
regulations adopted by the United States Department of Transportation
pursuant to Chapter 601 (commencing with Section 60101) of Subtitle
VIII of Title 49 of the United States Code (49 C.F.R. 192.5, as
adopted January 1, 2011, or a successor regulation).
(b) "Commission-regulated gas pipeline facility" means an
intrastate gas pipeline facility as defined in Section 60101 of Title
49 of the United States Code, that is subject to the safety
regulatory authority of the commission to the extent authorized
between the commission and the United States Secretary of
Transportation, including each of the following pipelines:
(1) An intrastate distribution line, which is a pipeline that is
not subject to the jurisdiction of the Federal Energy Regulatory
Commission pursuant to Section 717(b) of Title 15 of the United
States Code because it is used for the local distribution of natural
gas.
(2) An intrastate transmission line, which is a transmission
pipeline that the commission, pursuant to Section 717(c) of Title 15
of the United States Code, has certified to the Federal Energy
Regulatory Commission as being subject to the regulatory jurisdiction
of the commission over rates and service. For these purposes, a
transmission pipeline means a pipeline other than a gathering line
that: (A) transports gas from a gathering line or storage facility to
a distribution center, storage facility, or large volume customer
that is not downstream from a distribution center, (B) operates at a
hoop stress of 20 percent or more of specified maximum yield
strength, or (C) transports gas within a storage field.
(3) An intrastate gathering line, which is a pipeline that
transports gas from a current production facility to a transmission
line or main.
(4) A mobilehome park master-metered natural gas distribution
system that is subject to the commission's safety inspection and
enforcement program pursuant to Chapter 4 (commencing with Section
4351) of Division 2.
(5) A propane distribution system that is subject to the
commission's safety inspection and enforcement program pursuant to
Chapter 4.1 (commencing with Section 4451) of Division 2.
(c) "High consequence area" has the same meaning as defined in the
regulations adopted by the United States Department of
Transportation pursuant to Chapter 601 (commencing with Section
60101) of Subtitle VIII of Title 49 of the United States Code (49
C.F.R. 192.903, as adopted January 1, 2011, or a successor
regulation).
Article 2. Natural Gas Pipeline Safety Act of 2011
955. (a) This article shall be known and may be cited as the
Natural Gas Pipeline Safety Act of 2011.
(b) The commission is the state authority responsible for
regulating and enforcing intrastate gas pipeline transportation and
pipeline facilities pursuant to Chapter 601 (commencing with Section
60101) of Subtitle VIII of Title 49 of the United States Code,
including the development, submission, and administration of a state
pipeline safety program certification for natural gas pipelines
pursuant to Section 60105 of that chapter.
957. The commission, in consultation with the independent review
panel appointed to investigate the San Bruno natural gas pipeline
explosion of 2010, shall develop minimum criteria and standards for
the installation of sectionalized block valves and automated and
remote shutoff valves, taking into consideration weather-related and
outside faces, operating pressure, the rate of potential release of
natural gas, the potential for ignition of the gas, and
accessibility. The commission shall establish a timeline by which the
owner or operator of a commission-regulated gas pipeline facility
shall meet the minimum criteria and standards established by the
commission, unless technically unfeasible, for each of the following:
(a) Each commission-regulated gas pipeline facility that is first
placed in service or replaced.
(b) Each commission-regulated gas pipeline facility that traverses
an earthquake fault zone designated by the State Geologist pursuant
to the Alquist-Priolo Earthquake Fault Zoning Act (Chapter 7.5
(commencing with Section 2621) of Division 2 of the Public Resources
Code).
(c) Each commission-regulated gas pipeline facility that is in a
class 3 location, class 4 location, or high consequence area.
958. (a) Each gas corporation shall prepare and submit to the
commission a proposed comprehensive pressure testing implementation
plan for all intrastate transmission lines to either pressure test
those lines or to replace all segments of intrastate transmission
lines that were not pressure tested or that lack sufficient details
related to performance of pressure testing. The comprehensive
pressure testing implementation plan shall provide for testing or
replacing all intrastate transmission lines as soon as practicable.
The comprehensive pressure testing implementation plan shall set
forth criteria on which pipeline segments were identified for
replacement instead of pressure testing.
(b) The comprehensive pressure testing implementation plan shall
include a timeline for completion that is as soon as practicable, and
includes interim safety enhancement measures, including increased
patrols and leak surveys, pressure reductions, prioritization of
pressure testing for critical pipelines that must run at or near
maximum allowable operating pressure values that result in hoop
stress levels at or above 30 percent of specified minimum yield
stress, and any other measure that the commission determines will
enhance public safety during the implementation period.
Engineering-based assumptions may be used to determine maximum
allowable operating pressure in the absence of complete records, but
only as an interim measure until such time as all the lines have been
tested or replaced, in order to allow the gas system to continue to
operate.
(c) At the completion of the implementation period, all California
natural gas intrastate transmission line segments shall meet all of
the following:
(1) Have been pressure tested.
(2) Have traceable, verifiable, and complete records readily
available.
(3) Where warranted, be capable of accommodating in-line
inspection devices.
959. (a) Each gas corporation shall, twice a year, file with the
commission's consumer protection safety division a gas transmission
and storage safety report. The consumer protection safety division
shall review the reports to monitor each gas corporation's storage
and pipeline-related activities to assess whether the projects that
have been identified as high risk are being carried out, and to track
whether the gas corporation is spending its allocated funds on these
storage and pipeline-related safety, reliability, and integrity
activities for which they have received approval from the commission.
(b) The gas transmission and storage safety report shall include a
thorough description and explanation of the strategic planning and
decisionmaking approach used to determine and rank the gas storage
projects, intrastate transmission line safety, integrity, and
reliability, operation and maintenance activities, and inspections of
its intrastate transmission lines. If there has been no change in
the gas corporation's approach for determining and ranking which
projects and activities are prioritized since the previous gas
transmission and storage safety report, the subsequent report may
reference the immediately preceding report.
(c) If the commission's consumer protection safety division
determines that there is a deficiency in a gas corporation's
prioritization or administration of the storage or pipeline capital
projects or operation and maintenance activities, the division
shall bring the problems to the
commission's immediate attention.
968. (a) A gas corporation shall not recover any fine or penalty
in any rate approved by the commission.
(b) Each gas corporation shall demonstrate to the satisfaction of
the commission, in its general rate case, that its proposed rates
will be sufficient to enable the gas corporation to fund those
projects and activities necessary to maintain safe and reliable
service and to meet federal and state safety requirements applicable
to its gas plant, in a cost-effective manner.
(c) In determining what constitutes a reasonable rate of return,
the commission shall consider the safety record of the gas
corporation.
(d) If the commission authorizes a gas corporation to recover
expenses incurred for public safety, the commission shall require the
gas corporation to establish and maintain a balancing account to
record the difference between the approved revenue requirements for
public safety and the actual expenditures made by the utility. A gas
corporation shall return moneys approved for expenditure for public
safety by the commission, to the balancing account, if those funds
are not expended within a reasonable period of time after the
commission grants approval of the public safety expenditure, as
determined by the commission.
SEC. 4. SEC. 3. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.