BILL ANALYSIS Ó AB 838 Page 1 Date of Hearing: January 9, 2012 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Steven Bradford, Chair AB 838 (Hill) - As Amended: January 4, 2011 SUBJECT : Public Utilities Commission: public safety SUMMARY : Creates an Assistant Director of Public Safety at the California Public Utilities Commission (PUC). This individual would be in charge of coordinating safety information across the PUC's many divisions to make sure that safety is a consideration in all PUC decisions, including ratemaking. EXISTING LAW : 1)States the PUC has regulatory authority over public utilities. The Public Utilities Act requires the PUC to investigate the cause of all accidents occurring upon the property of any public utility or directly or indirectly arising from or connected with it maintenance or operation, resulting in loss of life or injury to person or property and requiring, in the judgment of the PUC, investigation by it, and authorizes the PUC to make any order or recommendation with respect to the investigation that it determines to be just and reasonable. 2)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 specific public utilities, including electrical and gas corporations. 3)Designates the Consumer Protection and Safety Division of the PUC as being responsible for inspection, surveillance, and investigation of the rights-of-way, facilities, equipment, and operations of railroads and public mass transit guideways, and for enforcing state and federal laws, regulations, orders, and directives relating to transportation of persons or commodities, or both, and directives of any nature or description, by rail. FISCAL EFFECT : Unknown. COMMENTS : According to the author, "as safety is the first priority of the PUC, the agency needs an executive-level AB 838 Page 2 administrator for whom safety is the focus. This bill creates an Assistant Executive Director for Public Safety who will bridge the silos between divisions so that staff throughout the organization can integrate safety considerations into the everyday business of the PUC. This individual would also span the current chasm between the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the PUC to ensure that state and federal efforts build on each other and are not duplicative". 1)Background : The mission statement of the PUC states that it serves the public interest by "protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates." 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. These incidents have uncovered major flaws in the manner California regulates natural gas utilities. The report from the National Transportation Safety Board's (NTSB) investigation of the San Bruno explosion cited there was poor communication between the PUC and the federal pipeline safety regulator, PHMSA. Additionally, the Independent Review Panel (IRP) formed by the PUC in response to the San Bruno explosion pointed to deficiencies in the PUC's oversight as contributing to the ineffective safety programs at Pacific Gas and Electric Company. The IRP called for better coordination between the various divisions within the PUC, stating that "the silos between the various disciplines must be dismantled." For instance, the IRP report called for the safety staff to take a more proactive role in rate cases. 2)Safety first : This bill creates an executive level administrator at the PUC whose primary focus is safety. Currently the PUC is lacking a top level administrator who would be responsible for integrating safety considerations into all of the proceedings held by the PUC. It is equally important for this administrator to advise each AB 838 Page 3 commissioner and division director on all matters that may impact public safety. This position should not remove the responsibility from the five voting PUC Commissioners appointed by the Governor to ultimately serve the public interest by protecting consumers and ensuring provision of safe, reliable utility service and infrastructure at reasonable rates. REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition None on file. Analysis Prepared by : DaVina Flemings / U. & C. / (916) 319-2083