BILL NUMBER: SB 705 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 22, 2011
AMENDED IN SENATE MAY 5, 2011
AMENDED IN SENATE APRIL 13, 2011
INTRODUCED BY Senator Leno
FEBRUARY 18, 2011
An act to add Chapter 4.5 (commencing with Section 950) to, and to
repeal Chapter 2.2 (commencing with Section 328) of, Part 1 of
Division 1 of the Public Utilities Code, relating to public
utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 705, as amended, Leno. Natural gas: service and safety.
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. The Public Utilities Act authorizes
the commission to ascertain and fix just and reasonable standards,
classifications, regulations, practices, measurements, or services to
be furnished, imposed, observed, and followed by specified public
utilities, including gas corporations.
Existing federal law requires the United States Department of
Transportation Pipeline and Hazardous Materials Safety Administration
(PHMSA) to adopt minimum safety standards for pipeline
transportation and for pipeline facilities, including an interstate
gas pipeline facility and an intrastate gas pipeline facility, as
defined. Existing law authorizes the United States Secretary of
Transportation to prescribe or enforce safety standards and practices
for an intrastate pipeline facility or intrastate pipeline
transportation to the extent that the safety standards and practices
are regulated by a state authority that annually submits to the
secretary a certification for the facilities and transportation or,
alternatively, authorizes the secretary to make an agreement with a
state authority authorizing it to take necessary action to meet
certain pipeline safety requirements. Existing federal law prohibits
a state authority from adopting or continuing in force safety
standards for interstate pipeline facilities or interstate pipeline
transportation, but permits a state authority that has submitted a
specified certification to adopt additional or more stringent safety
standards for intrastate pipeline facilities and intrastate pipeline
transportation only if those standards are compatible with the
minimum standards prescribed by PHMSA.
This bill would designate the commission as the state authority
responsible for regulating and enforcing intrastate gas pipeline
transportation and pipeline facilities pursuant to federal law,
including the development, submission, and administration of a state
pipeline safety program certification for natural gas pipelines. The
bill would require each gas corporation to develop a service and
safety plan, as specified, for the safe and reliable operation of its
gas plants commission-regulated gas pipeline
facility , as defined , and . The bill
would require the commission to accept, modify, or reject the
plan for each gas corporation by December 31, 2012 ,
and to build into an approved plan sufficient flexibility to redirect
activities to respond to safety requirements . The bill would
require that the plan be periodically reviewed and updated.
The bill would also reorganize and revise existing provisions
relative to restructuring of the natural gas industry to declare that
it is the policy of the state to place safety of the public and gas
corporation employees as the top priority and require the commission
to require that the distribution rate of a gas corporation include
sufficient revenues and employee staffing to provide for prompt
provision of service to the public consistent with this policy.
The bill would require the commission to take all reasonable and
appropriate actions to carry out that policy, as specified.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 2.2 (commencing with Section 328) of Part 1 of
Division 1 of the Public Utilities Code is repealed.
SEC. 2. Chapter 4.5 (commencing with Section 950) is added to Part
1 of Division 1 of the Public Utilities Code, to read:
CHAPTER 4.5. NATURAL GAS SERVICE AND SAFETY
Article 1. General
950. For purposes of this chapter, the following terms have the
following meanings:
(a) "Commission-regulated gas pipeline facility" means an
intrastate gas pipeline facility as defined in Section 60101 of Title
49 of the United States Code, that is subject to the safety
regulatory authority of the commission, including each
including, but not limited to, all of the
following pipelines:
(1) An intrastate distribution line, which is a pipeline that is
not subject to the jurisdiction of the Federal Energy Regulatory
Commission pursuant to Section 717(b) of Title 15 of the United
States Code because it is used for the local distribution of natural
gas.
(2) An intrastate transmission line, which is a transmission
pipeline that the commission, pursuant to Section 717(c) of Title 15
of the United States Code, has certified to the Federal Energy
Regulatory Commission as being subject to the regulatory jurisdiction
of the commission over rates and service. For these purposes, a
transmission pipeline means a pipeline other than a gathering line
that: (A) transports gas from a gathering line or storage facility to
a distribution center, storage facility, or large volume customer
that is not downstream from a distribution center, (B) operates at a
hoop stress of 20 percent or more of specified maximum yield
strength, or (C) transports gas within a storage field.
(3) An intrastate gathering line, which is a pipeline that
transports gas from a current production facility to a transmission
line or main other than a proprietary nondedicated gas gathering
line regulated by either the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation or the Pipeline and
Hazardous Materials Safety Administration of the United States
Department of Transportation .
(4) A mobilehome park master-metered natural gas distribution
system that is subject to the commission's safety inspection and
enforcement program pursuant to Chapter 4 (commencing with Section
4351) of Division 2.
(5) A propane distribution system that is subject to the
commission's safety inspection and enforcement program pursuant to
Chapter 4.1 (commencing with Section 4451) of Division 2.
(b) "Intrastate distribution line," "intrastate gathering line,"
and "intrastate transmission line" includes all facilities used in
the receipt, transport, and delivery of gas to an end-use customer,
including, but not limited to, pipelines, compressor stations,
pressure regulating devices, valves, services, meters, and equipment
or devices used in the operation and maintenance of those facilities.
Article 2. Natural Gas Pipeline Safety Act of 2011
955. (a) This article shall be known and may be cited as the
Natural Gas Pipeline Safety Act of 2011.
(b) The commission is the state authority responsible for
regulating and enforcing intrastate gas pipeline transportation and
pipeline facilities pursuant to Chapter 601 (commencing with Section
60101) of Subtitle VIII of Title 49 of the United States Code,
including the development, submission, and administration of a state
pipeline safety program certification for natural gas pipelines
pursuant to Section 60105 of that chapter.
(c) The State Fire Marshal shall exercise exclusive safety
regulatory and enforcement authority over intrastate hazardous liquid
pipelines pursuant to the Elder California Pipeline Safety Act of
1981 (Chapter 5.5 (commencing with Section 51010) of Part 1 of
Division 1 of Title 5 of the Government Code) and Section 13107.5 of
the Health and Safety Code.
(d) Nothing in this article limits the obligation of a gas
corporation to provide adequate service and facilities for the
convenience of the public and its employees pursuant to Section 451
or the authority of the commission to enforce that obligation under
state law.
961. (a) (1) Each gas corporation shall develop a service and
safety plan for the safe and reliable operation of its gas
plants commission-regulated gas pipeline facility
that implements the policy of subdivision (c) of Section 966
, subject to approval, modification, and adequate funding by the
commission .
(2) By December 31, 2012, the commission shall review and accept,
modify, or reject the plan for each gas corporation as part of a
proceeding that includes a hearing. The commission shall build
into any approved plan sufficient flexibility to redirect activities
to respond to safety requirements.
(3) Each gas corporation shall implement its approved plan.
(4) The commission shall require each gas corporation to
periodically review and update the plan, and the commission shall
review and accept, modify, or reject an updated plan at regular
intervals thereafter. The commission shall ,
pursuant to Section 1701.1, shall determine whether a
proceeding on a proposed update to a plan requires a hearing,
consistent with subdivision (d).
(b) The service and safety plan developed and implemented pursuant
to subdivision (a) shall be consistent with best practices in the
gas industry and with federal pipeline safety statutes as set forth
in Chapter 601 (commencing with Section 60101) of Subtitle VIII of
Title 49 of the United States Code and the regulations adopted by the
United States Department of Transportation pursuant to those
statutes.
(c) The service and safety plan developed and implemented pursuant
to subdivision (a) shall set forth how the gas corporation will
implement the policy established in subdivision (c) of Section 966
and achieve each of the following:
(1) Identify and minimize hazards and systemic risks in order to
prevent accidents, explosions, fires, and dangerous conditions, and
protect the public and gas corporation employees.
(2) Identify the safety-related systems that will be deployed to
eliminate or minimize hazards, including adequate documentation of
gas plant history and capability.
(3) Provide adequate storage and transportation capacity to
reliably and safely deliver gas to all customers consistent with
rules authorized by the commission governing core and noncore
reliability and curtailment, including provisions for expansion,
replacement, preventive maintenance, and reactive maintenance and
repair of gas plants its commission-regulated
gas pipeline facility .
(4) Provide for effective patrol and inspection of the
gas plant commission-regulated gas pipeline facility
to detect leaks and other compromised facility conditions and
to effect timely repairs.
(5) Provide for appropriate and effective system controls, with
respect to both equipment and personnel procedures, to limit the
damage from accidents, explosions, fires, and dangerous conditions.
(6) Provide timely response to customer and employee reports of
leaks and other hazardous conditions and emergency events, including
disconnection, reconnection, and pilot-lighting procedures.
(7) Include appropriate protocols for determining maximum
allowable operating pressures on relevant pipeline segments,
including all necessary documentation affecting the calculation of
maximum allowable operating pressures.
(8) Prepare for, prevent, or minimize damage
from, and respond to, earthquakes and other major events.
(9) Exceed Meet or exceed the
minimum standards for safe design, construction, installation,
operation, and maintenance of gas transmission and distribution
facilities prescribed by regulations issued by the United States
Department of Transportation in Part 192 (commencing with Section
192.1) of Title 49 of the Code of Federal Regulations.
(10) Ensure an adequate number of properly trained gas corporation
employees to carry out the plan.
(10) Ensure an adequately sized, qualified, and properly trained
gas corporation workforce to carry out the plan.
(11) Any additional matter that the commission determines should
be included in the plan.
(d) The commission and gas corporation shall provide opportunities
for full meaningful, substantial, and
ongoing participation by gas corporation employees in the development
and implementation of the service and safety plan, with the
objective of developing an industrywide culture of safety that will
prevent accidents, explosions, fires, and dangerous conditions for
the protection of the public and gas corporation employees.
962. The commission shall take all reasonable and appropriate
actions necessary to carry out the safety priority policy of
subdivision (c) of Section 966 consistent with the principle of just
and reasonable cost-based rates.
Article 3. Natural Gas Service
965. For purposes of this article, the following terms have the
following meanings:
(a) "After-meter services" includes, but is not limited to, leak
investigation, inspecting customer piping and appliances, carbon
monoxide investigation, pilot relighting, and high bill
investigation.
(b) "Basic gas service" includes transmission, storage for
reliability of service, and distribution of natural gas, purchasing
natural gas on behalf of a customer, revenue cycle services, and
after-meter services.
(c) "Metering services" includes, but is not limited to, gas meter
installation, meter maintenance, meter testing, collecting and
processing consumption data, and all related services associated with
the meter.
(d) "Revenue cycle services" means metering services, billing the
customer, collection, and related customer services.
966. The Legislature finds and declares all of the following:
(a) In order to ensure that all core customers of a gas
corporation continue to receive safe basic gas service, each existing
gas corporation shall continue to provide this essential service.
(b) A customer shall not be required to pay separate fees for
utilizing services that protect public or customer safety.
(c) It is the policy of the state that the commission and each gas
corporation place safety of the public and gas corporation employees
as the top priority.
967. (a) The commission shall require each gas corporation to
provide bundled basic gas service to all core customers in its
service territory unless the customer chooses or contracts to have
natural gas purchased and supplied by another entity.
(b) A public utility gas corporation shall continue to be the
exclusive provider of revenue cycle services to all customers in its
service territory, except that an entity purchasing and supplying
natural gas under the commission's existing core aggregation program
may perform billing and collection services for its customers under
the same terms as currently authorized by the commission, and except
that a supplier of natural gas to noncore customers may perform
billing and collection for natural gas supply for its customers.
(c) The gas corporation shall continue to calculate its charges
for services provided by that corporation. If the commission
establishes credits to be provided by the gas corporation to core
aggregation or noncore customers who obtain billing or collection
services from entities other than the gas corporation, the credit
shall be equal to the billing and collection services costs actually
avoided by the gas corporation.
(d) The commission shall require the distribution rate to continue
to include after-meter services and shall authorize sufficient
revenues and employee staffing to provide for prompt provision of
these services to the public, consistent with the policy developed
and implemented by the gas corporation and approved by the commission
pursuant to Section 961.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.