BILL ANALYSIS Ó
AB 1694
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Date of Hearing: April 9, 2012
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1694 (Fuentes) - As Amended: March 21, 2012
SUBJECT : Gas pipeline safety inspections.
SUMMARY : Allows the California Public Utilities Commission
(PUC) to employ a risk-based approach in determining the
frequency of inspections for master-metered natural gas and
propane systems. Specifically, this bill :
1)A risk-based inspection schedule adopted by the PUC requires
that if the natural gas or propane operator demonstrates
compliance with the initial inspection, additional inspections
would be made pursuant to at least once every 10 years.
EXISTING LAW:
1)Requires the PUC to undertake a gas safety inspection and
enforcement program for mobile home parks with distribution
systems to ensure compliance with the federal pipeline
standards, as defined, by propane operators within the state.
It also requires that the PUC conduct an initial inspection,
and, if the operator demonstrates compliance, to inspect the
system every 5 years.
2)Requires the PUC to undertake a propane safety inspection and
enforcement program for propane distribution systems to ensure
compliance with the federal pipeline standards, as defined, by
propane operators within the state. It also requires the PUC
to conduct an initial inspection, and if the operator
demonstrates compliance, inspect the system as specified by
law.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, AB 1694 provides the PUC
with resource flexibility so that it can better respond to
public safety needs.
1)Background : Approximately 3,476 mobile home master-metered
natural gas systems and 618 propane systems across the state.
The PUC must physically inspect mobile home park
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master-metered natural gas distribution systems at least once
every five years. There is a more stringent inspection
frequency for propane systems. The PUC must inspect propane
distribution systems once every five years for systems with
less than 100 customers, once every three years for systems
with 100 or more but less than 200 customers, and once every
two years for systems with 200 or more customers.
On September 24, 2010, the PUC formed its own The Independent
Review Panel (Panel) to investigate the September 9, 2010
explosion of a Pacific Gas and Electric Company (PG&E)
pipeline in San Bruno. In June 2011, the Panel issued its
report with recommendations for PG&E and the PUC. The Panel
recommended that the PUC pursue legislation to replace the
mandatory minimum audit requirements with a risk-based regime
that would provide the PUC's Consumer Protection and Safety
Division (CPSD) with the flexibility in how it allocates
inspection resources.
1)Risk-based inspection program : The PUC's currently conducts
audits of master-metered natural gas and propane mobile home
park systems. Audits consist of reviewing operation and
maintenance records, evaluating emergency procedures, and
performing field inspections of the gas distribution
facilities. If violations are found, the operator is given an
inspection form requesting that corrective measures be taken
within a specified time. If the operator complies and reports
the corrective actions to the inspector, the inspection is
closed. If the operator fails to comply, a citation and fine
may result.
2)This bill would allow the PUC to employ a risk-based approach
in determining the frequency of inspections for master-metered
natural gas and propane systems. According to the PUC,
substituting a risk-based inspection schedule would enable the
PUC to allocate its inspection resources more effectively to
focus on the mobile home parks and propane systems it
determines are at the highest priority for inspection.
CPSD's risk-based inspection process would be designed to
ensure that only operators who consistently demonstrate an
understanding of the regulations, cooperate with CPSD
inspections, and comply with the most important aspects of
regulations would be placed on a maximum 10-year inspection
interval. While the risk-based inspection plans would not be
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reviewed or approved by the US Department of Transportation
Pipeline and Hazardous Materials Safety Administration
(PHMSA), the PUC would receive PHMSA guidance on a risk-based
approached in developing and implementing this new regime.
CPSD would consider criteria such as recordkeeping of
operating plans, system maps used to prevent excavation
damage, responding to emergencies, hiring of qualified
personnel to perform job duties, and providing public
awareness literature to all customers served by the system.
CPSD performed an analysis, using data from previous
inspections, to determine how many operators would have
inspection frequencies extended, or decreased, compared to
current requirements. The analysis concluded that
approximately 50% of natural gas master-metered system
operators would be candidates for an extended cycle; of that
amount an estimated 51% would have inspection intervals
extended up to 10 years; approximately 43% would remain on
current inspection frequency, and 7% of operators would have
inspection frequencies increased to less than 5 years. For
propane system operators, approximately 66% operators would be
candidates for any extended cycle; of that amount an estimated
58% would have inspection interval extended to up to 10 years;
24% will remain on current inspection frequency, and 10% would
have inspection frequencies increased below current
requirements.
The author may wish to consider reducing the time between
inspections from 10 years to 7 years to ensure that operators
who have been candidates for extended cycle inspections are
maintaining safe operations.
REGISTERED SUPPORT / OPPOSITION :
Support
California Pipe Trades Council
California Public Utilities Commission (CPUC) (Sponsor)
California State Association of Electrical Workers
Coalition of California Utility Employees
Division of Ratepayer Advocates (DRA) (if amended)
Western Manufactured Housing Communities Association
Opposition
AB 1694
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None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083