BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 578
Author: Hill (D)
Amended: 5/30/12 in Senate
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 10-0, 5/15/12
AYES: Padilla, Fuller, Berryhill, Corbett, DeSaulnier,
Emmerson, Kehoe, Pavley, Simitian, Wright
NO VOTE RECORDED: De León, Rubio, Strickland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/16/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 57-19, 1/30/12 - See last page for vote
SUBJECT : Public utilities: natural gas pipeline:
safety
SOURCE : Author
DIGEST : This bill requires the Public Utilities
Commission (PUC) to formally respond to certain safety
recommendations concerning gas pipeline safety made by the
federal National Transportation Safety Board (NTSB) and
federal Pipeline and Hazardous Materials Safety
Administration (PHMSA).
ANALYSIS : Existing law requires the PUC to regulate gas
transmission, distribution and gathering pipeline
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facilities which include gas corporations, master-metered
mobile home parks, and propane operators.
Existing federal law and general orders of the PUC
establish safety requirements pertaining to the design,
construction, testing, operation, and maintenance of
utility gas gathering, transmission, and distribution
piping systems, and for the safe operation of such lines
and equipment.
Existing federal law requires the Secretary of the United
States Department of Transportation (DOT) to respond to
safety recommendations of the NTSB within 90 days of
receipt and indicate the Secretary's intended actions as a
result of the recommendations.
Existing law grants the PUC the power and obligation to
determine not only that any rate or increase in a rate is
just and reasonable, but also the authority to supervise
and regulate every public utility in the state and
determine whether costs incurred are reasonable and
prudent.
This bill requires the PUC, within 90 days, to provide the
NTSB, when the federal NTSB submits a safety recommendation
letter concerning gas pipeline safety to the PUC, with a
formal written response to each recommendation stating (1)
the PUC's intent to implement the recommendations in full,
with a proposed timetable for implementation of the
recommendations, (2) the PUC's intent to implement part of
the recommendations, with a proposed timetable for
implementation of those recommendations, and detailed
reasons for the PUC's refusal to implement those
recommendations that the PUC does not intend to implement,
or (3) the PUC's refusal to implement the recommendations,
with detailed reasons for the PUC's refusal to implement
the recommendations. When the NTSB issues a safety
recommendation letter concerning any PUC-regulated gas
pipeline facility to the United States Department of
Transportation, the federal PHMSA, a gas corporation, or to
the PUC, or the PHMSA issues an advisory bulletin
concerning any commission-regulated gas pipeline facility;
requires the PUC to determine if implementation of the
recommendation or advisory is appropriate and further
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requires that the basis for the PUC's determination be
detailed in writing and be approved by a majority vote of
the PUC. If the PUC determines that a safety
recommendation made by the NTSB is appropriate or that
action concerning an advisory bulletin by the PHMSA is
necessary, requires that the PUC issue orders or adopt
rules to implement the safety recommendations or advisory
as soon as practical and to consider whether a more
effective, or equally effective and less costly,
alternative exists to address the safety issue that the
recommendation or advisory addresses; and requires the PUC
to include a detailed description of any action taken on an
NTSB safety recommendation, or to implement an advisory
bulletin, in a specified annual report the PUC is required
to make to the Legislature.
Background
The PHMSA, acting through the Office of Pipeline Safety
(OPS), administers the national regulatory program to
assure safe transportation of natural gas, petroleum, and
other hazardous materials by pipeline. The statutes under
which OPS operates provide for state assumption of all or
part of the intrastate regulatory and enforcement
responsibility through annual certifications and
agreements. This cooperative, collaborative relationship
between the federal and state government - the
Federal/State Partnership - forms the cornerstone of the
pipeline safety program for which the PUC has assumed most
of the responsibility. The PUC does not exercise
jurisdiction over municipal operators which are under the
direct authority of the OPS. State pipeline safety
programs adopt the federal regulations and may issue more
stringent regulations for intrastate pipeline operators
under state law.
San Bruno Tragedy . On the evening of September 9, 2010, a
30-inch natural gas transmission line ruptured in a
residential neighborhood in the City of San Bruno. The
rupture caused an explosion and fire which took the lives
of eight people and injured dozens more; destroyed 37 homes
and damaged 70. Gas service was also disrupted for 300
customers.
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The NTSB, which has primary jurisdiction for investigating
pipeline accidents in which there is a fatality,
substantial property damage, or significant environmental
impacts, issued its Pipeline Accident Report on the San
Bruno tragedy in August, 2011 and determined that:
1. The probable cause of the accident was PG&E's (a)
inadequate quality assurance and quality control in 1956
during its Line 132 relocation project, which allowed
the installation of a substandard and poorly welded pipe
section with a visible seam weld flaw that, over time
grew to a critical size, causing the pipeline to rupture
during a pressure increase stemming from poorly planned
electrical work at the Milpitas Terminal; and (b)
inadequate pipeline integrity management program, which
failed to detect and repair or remove the defective pipe
section;
2. Contributing to the accident were the PUC's and the
DOT's exemptions of existing pipelines from the
regulatory requirement for pressure testing, which
likely would have detected the installation defects.
Also contributing to the accident was the PUC's failure
to detect the inadequacies of PG&E's pipeline integrity
management program; and
3. Contributing to the severity of the accident were the
lack of either automatic shutoff valves or remote
control valves on the line and PG&E's flawed emergency
response procedures and delay in isolating the rupture
to stop the flow of gas.
NTSB Safety Recommendations . In an accident investigation,
the NTSB will often make recommendations to the parties
involved in the accident, such as the gas utility operator,
local first responders, and regulatory agencies such as the
PHMSA and the PHMSA-certified state entity responsible for
enforcement such as the PUC. Recommendations usually
identify a specific problem uncovered during an
investigation and specify how to correct the situation.
Letters containing the recommendations are directed to the
organization best able to act on the problem, whether it is
public or private. The NTSB does not, however, make
recommendations to pipeline safety regulators in other
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states. Regulators in other states are therefore only
compelled to consider NTSB recommendations if they result
in a PHMSA rulemaking or a change in the certification
process. More than 13,000 recommendations have been issued
by the NTSB since 1967. In response to San Bruno, in 2010
and 2011 the NTSB issued 39 safety recommendations in 11
letters directed to the DOT, PHMSA, PG&E, PUC, Governor
Brown and the American Gas Association.
Comments
The author asserts that this bill 578 addresses a
deficiency in the regulatory oversight of natural gas
pipeline operations in California wherein the PUC
frequently ignores and fails to act upon pipeline safety
recommendations issued by the NTSB. This bill requires the
PUC to determine, upon the adoption of a natural gas
pipeline safety recommendation by NTSB, whether that
recommendation is appropriate for California. If so, the
PUC must implement that recommendation in a cost-effective
manner. If not, the PUC must detail in writing the reason
for not doing so.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, on-going
costs of $130,000 annually from the Public Utilities
Commission Utilities Reimbursement Account, beginning in
2013-14 for staff to respond to NTSB safety recommendations
and PHMSA advisory bulletins.
SUPPORT : (Verified 8/16/12)
California Professional Firefighters
San Mateo County Board of Supervisors
ASSEMBLY FLOOR : 57-19, 1/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto,
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Gordon, Hall, Hayashi, Roger Hernández, Hill, Huber,
Hueso, Huffman, Jeffries, Bonnie Lowenthal, Ma, Mendoza,
Mitchell, Monning, Nestande, Olsen, Pan, Perea,
Portantino, Skinner, Solorio, Swanson, Torres, Valadao,
Wieckowski, Williams, Yamada, John A. Pérez
NOES: Conway, Donnelly, Beth Gaines, Garrick, Grove,
Hagman, Halderman, Harkey, Jones, Knight, Logue, Mansoor,
Miller, Morrell, Nielsen, Norby, Silva, Smyth, Wagner
NO VOTE RECORDED: Cook, Gorell, Lara, V. Manuel Pérez
RM:m 8/17/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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