BILL ANALYSIS Ó
AB 578
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Date of Hearing: January 9, 2012
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 578 (Hill) - As Amended: January 4, 2012
SUBJECT : Natural gas pipelines: safety
SUMMARY : Requires the California Public Utilities Commission
(PUC) to adopt gas pipeline safety recommendations of the
National Transportation Safety Board (NTSB). Specifically,
this bill :
1)States the PUC shall hold a rulemaking or other appropriate
proceeding, regarding any general natural gas pipeline safety
recommendation and shall implement the general recommendation
no later than 18 months after the recommendation has been made
public by the NTSB.
2)States the PUC shall implement, as soon as practicable, any
natural gas pipeline safety recommendation by the NTSB as to a
specific utility.
3)Specifies that if the PUC determines that implementation of a
safety recommendation is not appropriate, the reason or
reasons shall be detailed in writing as part of the PUC's
record of the proceedings.
EXISTING LAW :
1)States PUC has regulatory authority over public utilities.
The Public Utilities Act authorizes the PUC to ascertain and
fix just and reasonable standards, classifications,
regulations, practices, measurements, or services to be
furnished, imposed observed, and followed by specified public
utilities, including gas corporations.
2)States the Natural Gas Pipeline Safety Act of 2011 designates
the PUC as the state authority responsible for regulating and
enforcing intrastate gas pipeline transportation and pipeline
facilities pursuant to federal law, including the development,
submission, and administration of a state pipeline safety
program certification for natural gas pipelines.
FISCAL EFFECT : Unknown.
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COMMENTS : According to the author, "recent natural gas pipeline
accidents in California have received attention throughout the
country." The most visible was that in San Bruno in late 2010,
but natural gas accidents in Cupertino and Roseville at the end
of last year highlight exactly how pervasive our problems are.
These problems, however, are not new, have been documented, and
could have been mitigated for more than a decade had our state
regulatory paid closer attention to them and required utilities
to follow the prescribed solutions."
1)Background : United States Code (USC) Title 49 Section
60104(c) states that a state authority certified by the
Department of Transportation (DOT) may adopt "additional or
more stringent safety standards for intrastate pipeline
facilities if those standards are compatible with the minimum
federal safety standards. USC Section 60104(a) states that
the Secretary of Transportation may not prescribe or enforce
safety standards for intrastate pipeline facilities to the
extent that the facilities are already regulated by a
Department of Transportation-certified state (or municipal)
authority.
The Pipeline and Hazardous Materials Safety Administration
(PHMSA) is the federal regulatory agency within DOT with
jurisdiction over pipeline safety. The Research and Special
Programs Administration (RSPA) within DOT had been the
regulatory agency in charge of pipeline safety until 2004, when
it was abolished and pipeline safety responsibility was
transferred to the newly-created PHMSA.
PHMSA has certified the State Fire Marshal to regulate
California's intrastate hazardous liquid pipelines and has
certified the PUC to regulate intrastate natural gas facilities.
NTSB is an independent body, chartered by Congress (USC Title
49, Chapter 11), whose 5 members are appointed for 5-year terms
by the president and confirmed by the Senate. Their charge is
to investigate major aviation, highway, railway, marine, and
pipeline accidents. Apart from limited standing to bring forth
civil suits related to aviation accidents, (Sections 1151-1155),
the NTSB has no enforcement authority.
USC Section 1135(a-b) requires the Secretary of Transportation
give a formal response to all NTSB recommendations submitted
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within 90 days. Acceptable responses detail whether or not the
agency will adopt part or all of the recommendation and propose
a timetable for doing so or the reasons for not doing do.
2)Pipeline accidents in California : Recent natural gas pipeline
accidents in California have received attention throughout the
county. In particular, the San Bruno explosion in September
2010 was most visible as it claimed 8 lives, left many
injured, and destroyed dozens of homes. In 2011, there was an
explosion of a Cupertino condominium and a 7-hour fire in a
Roseville intersection both caused by types of plastic pipes
previously identified to be at risk of failure.
3)NTSB safety recommendations : This bill would require the PUC
to adopt rules to implement pipeline safety recommendations of
NTSB within a prescribed period of time. The bill not only
compels the PUC to consider NTSB recommendations post the San
Bruno gas explosion, but it also requires the PUC to consider
NTSB recommendations that may arise from future pipeline
incidents across the United States.
In response to the San Bruno explosion, last year the NTSB
issued recommendations to the U.S. Secretary of Transportation,
PHMSA, the Governor of the State of California, PUC, Pacific Gas
& Electric Company (PG&E), and the American Gas Association and
the Interstate Natural Gas Association of America.
PUC actions to date have been consistent with the preliminary
and final recommendations of NTSB. The PUC instituted
Rulemaking 11-02-019 to examine regulatory changes and other
actions that PUC regulated gas transmission operators PG&E,
Southern California Gas Company (SoCalGas), San Diego Gas &
Electric Company (SDG&E), and Southwest Gas Corporation (SWGC)
needed to take to improve the safety of their systems. In
addition, the PUC has taken action to reform its own regulatory
oversight function. For example, the PUC has appointed an
Independent Review Panel to look at both PG&E and PUC actions
leading up to San Bruno. The Independent Panel's report was
critical of both PG&E and the PUC.
According to a recent press release, PG&E reports their progress
on fulfilling NTSB recommendations - some of which have already
been completed. These include: verification of maximum
allowable operation pressure on 1,600 miles of pipelines;
updated their emergency response plans; implemented a data
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management system to ensure that PG&E records are traceable,
verifiable and complete; notifications provided to customers
living within 2,000 feet of a transmission pipeline;
installation of automated valves; and the filing of their
Pipeline Safety Enhancement Plan which details planned
improvements over the next few years.
4)Timeline : This bill requires the PUC to implement NTSB
recommendations within 18 months of those recommendations
being made public. Depending on the nature and complexity, it
may be a challenge for the PUC to implement general
recommendations within this prescribed period of time.
Therefore, the author and this committee may wish to remove
the language relating to the timeframe and give the PUC
sufficient time to vet the recommendation and seek advice from
industry and technical experts and implement as soon as
practicable.
5)Technical amendments : Subparagraph (a) and (c) conflict with
each other. The PUC should first determine whether to adopt
the recommendation or not before issuing orders to implement
the recommendation. Additionally, the author and this
committee may wish to amend the bill to add a provision that
allows the utilities reasonable and just cost recovery for
implementation of the new measures .
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
California Public Utilities Commission (CPUC) (Unless amended)
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083