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 Page 2 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." AB 2559 Page 3 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 AB 2559 Page 4 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