BILL NUMBER: AB 1456	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 17, 2012

INTRODUCED BY   Assembly Member Hill

                        JANUARY 9, 2012

   An act to add Section 960 to the Public Utilities Code, relating
to gas corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1456, as amended, Hill. Gas corporations: rate of return:
 safety.   safety performance standards. 
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations, as
defined. Existing law authorizes the commission to fix the rates and
charges for every public utility, and requires that those rates and
charges be just and reasonable. Existing law, the Natural Gas
Pipeline Safety Act of 2011, among other things, prohibits a gas
corporation from recovering any fine or penalty in any rate approved
by the commission.
   This bill would require the commission to consider the
safety performance of a gas corporation in determining what
constitutes a just and reasonable rate of return   , to
perform an   analysis of benchmark data and adopt safety
performance standards for pipeline safety and reliability  
and to evaluate a gas corporation's safety performance based on those
standards. The bill would authorize the commission to implement a
rate incentive program, as specified  .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares as follows:
   (a) On September 9, 2010, a 30-inch natural gas transmission
pipeline ruptured in San Bruno, California, killing eight people,
hospitalizing more than 50 people, and destroying 38 homes.
   (b) On September 23, 2010, the Public Utilities Commission created
an independent review panel of experts to investigate both the
practices of the pipeline operator and of the commission to ensure
that such an accident would not be repeated elsewhere in the state.
   (c) On June 9, 2011, the panel presented its findings and found
that the financial focus of the pipeline operator's management had
been detrimental to system safety.
   (d) The panel suggested that  , upon thorough analysis of
benchmark data,  rate incentives and penalties be applied to gas
corporations based on the achievement of specified levels of
performance.
  SEC. 2.  Section 960 is added to the Public Utilities Code, to
read: 
   960.  The commission shall consider the safety performance of a
gas corporation in determining what constitutes a just and reasonable
rate of return.  
   960.  (a) The commission shall perform an analysis of benchmark
data and adopt safety performance standards for pipeline safety and
reliability.
   (b) The commission shall evaluate a gas corporation's safety
performance based on the safety performance standards adopted
pursuant to subdivision (a) and may implement a rate incentive
program. The rate incentive program may contain penalties based on
its performance.