BILL ANALYSIS Ó AB 578 Page 1 Date of Hearing: January 19, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 578 (Hill) - As Amended: January 12, 2012 Policy Committee: UtilitiesVote:11-2 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires the Public Utilities Commission (PUC) to implement those recommendations of the National Transportation Safety Board (NTSB) regarding natural gas pipeline safety that the commission determines are appropriate. Specifically, this bill: 1)Requires the PUC, beginning January 1, 2012, to determine if implementation of NTSB recommendations issued in a pipeline accident report and regarding natural gas pipeline safety are appropriate or whether less costly and equally effective alternatives exist. 2)Requires the PUC, if it determines either that a recommendation is not appropriate or that there is no feasible alternative, to state its reasons in writing on the record of a proceeding. 3)Requires the PUC, if it determines a recommendation is appropriate, to issue orders and adopt rules for implementation as soon as practicable. 4)Requires the PUC to detail actions taken regarding NTSB recommendations in the commission's annual report to the Legislature and to authorize recovery in rates for utilities' costs related to implementation of recommendations. FISCAL EFFECT Annual special fund costs of up to $130,000 to the PUC for two half-time positions (administrative law judge and regulatory AB 578 Page 2 analyst) to coordinate evaluation of NTSB recommendations and feasible alternatives. According to information provided by the author's office, relevant NTSB accident reports issued over the past 11 years included 64 recommendations, with 32 recommendations coming from the board's report on the San Bruno pipeline explosion. COMMENTS 1)Background . The Pipeline and Hazardous Materials Safety Administration (PHMSA) is the federal regulatory agency within the Department of Transportation (DOT) with jurisdiction over pipeline safety. PHMSA has certified the PUC to regulate intrastate natural gas facilities within California. The DOT may not prescribe or enforce safety standards for intrastate pipelines for facilities regulated by a certified entity such as the PUC. The NTSB is an independent body charged by Congress to investigate major aviation, highway, railway, marine, and pipeline accidents. Apart from limited standing to bring civil suits related to aviation accidents, the NTSB has no enforcement authority. 2)Purpose . In light of recent natural gas pipeline accidents in California-most prominently the September 2010 explosion in San Bruno that killed eight people-the author believes that the PUC should take steps to implement NTSB safety recommendations, and to state its reasons in writing if the commission determines not to implement any recommendation. The author notes that PHMSA is required by federal law to respond to the NTSB within 90 days of receiving recommendation. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081