BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1694|
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CONSENT
Bill No: AB 1694
Author: Fuentes (D)
Amended: 4/25/12 in Assembly
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 13-0, 6/11/12
AYES: Padilla, Fuller, Berryhill, Corbett, De León,
DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Simitian,
Strickland, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/10/12 (Consent) - See last page
for vote
SUBJECT : Gas pipeline safety inspections
SOURCE : Public Utilities Commission
DIGEST : This bill permits the California Public
Utilities Commission (PUC) to inspect mobilehome parks
(MHPs) and propane suppliers at least once every seven
years utilizing a risk-based assessment schedule.
ANALYSIS : Existing law permits MHPs owners constructed
prior to 1997 to provide gas and electric service to MHP
tenants and requires, in this instance, that the MHP owner
(the master-meter) charge the same rate for gas and
electric service that would be applicable if the tenant
received service from an investor-owned utility (IOU).
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Existing law defines a propane distribution system as one
that serves ten or more customers, within a citywide area,
an apartment house, a condominium, a cluster of homes, a
shopping center, a combination of any of the above, a MHP
with two or more customers, or any system if a portion of
the system is located in a public place, which is connected
to a tank or tanks, for the purpose of distribution of
propane to the end customers.
Existing law charges the Department of Housing and
Community Development (HCD) with inspecting MHPs including
the inspection of gas and electric infrastructure.
Existing law requires the PUC to conduct an initial
inspection of the natural gas distribution infrastructure
in MHPs in which the distribution system is not owned by an
IOU and for propane distribution systems of propane
suppliers. If the MHP or propane supplier is in compliance
at the initial inspection, the PUC must inspect the MHP or
propane supplier every five years thereafter. Inspections
are required once every five years for propane distribution
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.
This bill permits the PUC to inspect MHPs and propane
suppliers at least once every seven years utilizing a
risk-based assessment schedule.
This bill requires that if the operator demonstrates
compliance with the initial inspection, additional
inspections be made at least once every seven years
pursuant to a risk-based inspection schedule adopted by the
commission.
Background
Mobilehome Parks . The state of California has
approximately 4,800 mobile home parks with over 340,000
residents. Approximately 88% of the state's 4,800 parks
are more than 40 years old and many are likely to have an
outdated gas and/or electrical infrastructure that is both
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a problem for tenants with modern appliances and a public
safety concern. Most parks are "master metered," meaning
that the MHP owner is the utility, receiving service
through a single meter. The electricity is then
distributed to tenants who are billed by the MHP owner
based on usage or the service costs are split
proportionately.
Propane Distribution Systems . The PUC assumed jurisdiction
over the safety of master-metered propane distribution
systems in January 1995. A propane system operator can be
a gas utility, a municipality, an individual or supplier
operating a propane system in a housing project, apartment
complex, condominium, mobile home park, shopping center,
etc. If there is no designated person responsible for
compliance, then the person making a sale of propane gas to
the customer is the propane system operator. The PUC's
Utilities Safety Branch administers the propane safety
program similar to its Mobilehome Park Safety Program,
scheduling each jurisdictional system for a safety audit at
least once every five years, to assure compliance with the
federal pipeline safety regulations.
Independent Review Panel . In the aftermath of the
explosion of a natural gas transmission pipeline in San
Bruno the PUC created an Independent Review Panel (IRP) of
experts to conduct a comprehensive study and investigation
of the September 9, 2010, explosion and fire. The PUC
directed the panel to make a technical assessment of the
events, determine the root causes, and offer
recommendations for action by the PUC to best ensure such
an accident is not repeated elsewhere. The PUC encouraged
the panel to make such recommendations as necessary. Such
recommendations could include changes to design,
construction, operation, maintenance, and replacement of
natural gas facilities, management practices at PG&E in the
areas of pipeline integrity and public safety, regulatory
changes by the PUC itself, and statutory changes to be
recommended by the PUC.
The IRP released its findings on June 8, 2011. The PUC
reported that relatively fewer of the PUC's scarce staff
resources were focused on the transmission pipeline systems
within the state relative to the small operator audits and
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that no such intervals are required for other types of
systems. Specifically:
Under California law, the PUC must inspect all 3,200+
MHP and propane gas distribution systems at least once
every five years, and in some cases more often. As a
result, the PUC commits substantial pipeline safety
inspection resources on these systems. In 2008, the
PUC spent 43% of its inspection days on these
facilities. Large private distribution systems took
up another 40% and only 17% of inspection days were
spent on transmission pipelines. In our interviews,
the PUC staff indicated it would prefer to spend more
time on integrity management and transmission lines,
but is hampered from doing so by California mobile
home park and propane requirements, which focus
limited resources elsewhere.
The panel recommended a risk-based inspection regime that
would provide the PUC with needed flexibility in how it
allocates inspection resources.
PUC Inspection Staff . The PUC reports that it has doubled
the size of its natural gas inspection staff since
September 2010 and created a dedicated Risk Assessment unit
in September 2011. The unit will provide the necessary
data and analysis to develop a risk-based inspection and
auditing schedule as called for in the IRP and does not
anticipate any additional costs associated with
implementation of a risk-based inspection schedule.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/26/12)
Public Utilities Commission (source)
California State Association of Electrical Workers
California State Pipe Trades Council
Coalition of California Utility Employees
Division of Ratepayer Advocates
Western Manufactured Housing Communities Association
Western Propane Gas Association
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ASSEMBLY FLOOR : 73-0, 5/10/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Pan, Perea,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Cook, Fletcher, Furutani, Jeffries,
Norby, Olsen, V. Manuel Pérez
RM:n 6/26/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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