BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2559
                                                                  Page  1

          Date of Hearing:   April 9, 2012

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                   AB 2559 (Buchanan) - As Amended:  April 9, 2012
           
          SUBJECT  :   Natural gas pipelines: pipeline integrity management

           SUMMARY  :   This bill would require California cities and 
          counties to expedite permitting for pipeline integrity 
          management projects.  Specifically,  this bill  :  

          1)Requires the Public Utilities Commission (PUC) to ensure that 
            a city, county, or city and county is provided notice by a gas 
            corporation whenever pipeline inspection, remediation, or 
            replacement work within the city, county, or city and county, 
            and the work is likely to require action by the city, county, 
            or city and county to approve or facilitate the work. 

          2)Requires that the city, county, or city and county provided 
            with notice will expedite any permitting or other actions 
            necessary to complete any pipeline inspection, remediation, or 
            replacement work within the city, county, or city and county.

           EXISTING LAW 

          1)Exempts pipeline projects from the requirements of the 
            California Environmental Policy Act if:

             a)   they are: "?less than one mile in length within a public 
               street or highway or any other public right-of-way for the 
               installation of a new pipeline or the maintenance, repair, 
               restoration, reconditioning, relocation, replacement, 
               removal, or demolition of an existing pipeline." For 
               purposes of this section, "pipeline" includes subsurface 
               facilities but does not include any surface facility 
               related to the operation of the underground facility. 

             b)   They involve "?the operation, repair, maintenance, 
               permitting, leasing, licensing, or minor alteration of 
               ÝExisting facilities of both investor and publicly-owned 
               utilities used to provide ? natural gas?], involving 
               negligible or no expansion of use beyond that existing at 
               the time of the lead agency's determination?. consist of 
               replacement or reconstruction of existing utility systems 








                                                                  AB 2559
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               and/or facilities involving negligible or no expansion of 
               capacity where the new structure will be located on the 
               same site as the structure replaced and will have 
               substantially the same purpose and capacity as the 
               structure replaced."

          1)Prohibits a local agency from charging permit and similar fees 
            in excess of the estimated reasonable costs of providing the 
            services rendered unless the amounts of the fees are approved 
            by the electorate.


           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

          1)The author states that "AB 2559 provides the state's gas 
            utilities expedited local permitting for pipeline inspection, 
            remediation and replacement work undertaken pursuant to 
            pipeline integrity management. This bill results from a 
            recommendation by the Independent Review Panel established by 
            the CPUC in the wake of the San Bruno tragedy. One of the 
            Panel's recommendations encourages the Legislature to enact 
            legislation that would provide the state's gas utilities with 
            the right to expedited permitting by counties and 
            municipalities for pipeline inspection, remediation and 
            replacement that results from a utility's pipeline integrity 
            management plan. These pipeline integrity management plans are 
            currently required of operators of gas transmission pipelines 
            in order for the utilities to asses and address potential 
            problems with their pipelines. The state's main gas operators 
            have submitted Pipeline Safety Enhancement Plans that propose 
            a combined 815 miles of pressure testing and 391 miles of pipe 
            replacement for 2012-2014 alone. It is vital that the state's 
            gas operators have all the tools available to them so that the 
            safety work can be completed expeditiously and on schedule. AB 
            2559 will help facilitate this by providing gas utilities with 
            expedited permitting by counties and municipalities for the 
            operators' pipeline inspection, remediation and replacement 
            work. Codifying this requirement of expedited permitting for 
            pipeline integrity management work will help speed up critical 
            safety work, better ensure public safety across California and 
            put the public at ease that all needed maintenance has been 
            completed."









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          2)The PUC formed its own review panel based on authority it 
            cited in its resolution to"do all things, whether specifically 
            designated in ... Ýthe Public Utilities Code] or in addition 
            thereto, which are necessary and convenient" to our regulation 
            of public utilities, including, though not limited to, 
            adopting necessary rules and requirements in furtherance of 
            our constitutional and statutory duties to regulate and 
            oversee public utilities operating in California." The 
            Independent Review Panel recommended that the PUC "Request the 
            California General Assembly enact legislation that would 
            provide the state's gas utilities with the right to expedited 
            permitting by counties and municipalities for pipeline 
            inspection, remediation and replacement work undertaken 
            pursuant to pipeline integrity management."

          3)Gas corporations have experienced permitting requirements by 
            local governments that appear to go beyond work related to 
            pipeline integrity management. Examples include unusually high 
            permitting fees or additional requirements, such as 
            resurfacing roads well beyond the area where the work is to be 
            performed.

          4)Ratepayers pay to make repairs and maintain utility 
            infrastructure. Additional costs caused by permitting delays, 
            and unusually high fees, impact the rates that utility 
            customers pay.

          5)Local building and planning departments vary widely in 
            resources to review, issue, make a determination, and inspect 
            construction projects. In larger communities, there may be 
            multiple plan checkers and inspectors while in others there 
            may be a single person who works as both plan checker and 
            inspector.  The author may wish to consider adding language 
            that defines expedited permitting to mean within 10 business 
            days and that  if a local agency determines that it cannot 
            grant the permit in ten business days, it shall provide an 
            explanation to the utility in writing along with the timeline 
            for processing the permit.  

          6)To the extent that a local government may ask for work that is 
            additional to but unrelated to pipeline repairs,  the author 
            may wish to consider an amendment to require that local 
            governments may not require work to be performed as part of a 
            permit, that is outside of the scope of the proposed pipeline 
            project, unless it specifically related to public health and 








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            safety.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Public Utilities Commission (CPUC) (Sponsor)
          Sierra Club California

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Susan Kateley / U. & C. / (916) 
          319-2083