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
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          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 








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          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