BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 578
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 578 (Hill)
          As Amended  January 12, 2012
          Majority vote 

           UTILITIES & COMMERCE           11-2                 
          APPROPRIATIONS      12-5        
           
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          |Ayes:|Bradford, Fletcher,       |Ayes:|Fuentes, Blumenfield.     |
          |     |Buchanan, Fong, Fuentes,  |     |Bradford, Charles         |
          |     |Perea, Wieckowski, Ma,    |     |Calderon, Campos,         |
          |     |Nestande, Skinner,        |     |Chesbro, Gatto, Hall,     |
          |     |Swanson                   |     |Hill, Ammiano, Mitchell,  |
          |     |                          |     |Solorio                   |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Beth Gaines, Knight       |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
           ----------------------------------------------------------------- 

           SUMMARY  :   Requires the California Public Utilities Commission 
          (PUC) to implement those recommendations of the National 
          Transportation Safety Board (NTSB) regarding natural gas 
          pipeline safety that the PUC 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 PUC's annual report to the Legislature 








                                                                  AB 578
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            and to authorize recovery in rates for utilities' costs 
            related to implementation of recommendations.

           FISCAL EFFECT  :   According to the Assembly Appropriations 
          Committee, annual special fund costs of up to $130,000 to PUC 
          for two half-time positions (administrative law judge and 
          regulatory 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  :  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."

          NTSB safety recommendations:  In response to the San Bruno 
          explosion, last year NTSB 
          issued recommendations to the U.S. Secretary of Transportation, 
          the U.S. Department of Transportation Pipeline and Hazardous 
          Materials Safety Administration (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.  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, PUC 
          has taken action to reform its own regulatory oversight 
          function.  For example, 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 PUC.  








                                                                  AB 578
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          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 
          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. 


           Analysis Prepared by  :    DaVina Flemings / U. & C. / (916) 
          319-2083


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