BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair SB 705 (Leno) Hearing Date: 05/26/2011 Amended: 05/05/2011 Consultant: Brendan McCarthy Policy Vote: EU&C 9-0 _________________________________________________________________ ____ BILL SUMMARY: SB 705 requires natural gas corporations to develop and implement natural gas safety plans, with specified elements. The safety plans are subject to review and approval by the Public Utilities Commission. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Review and oversight of $240 Special * safety plans * Public Utilities Commission Utilities Reimbursement Account. _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Federal law and general orders of the Public Utilities Commission require the Commission to regulate natural gas transmission, distribution, and other pipelines. Operators of natural gas pipelines are required to develop emergency response plans. Federal law also requires pipeline operators to provide information to the federal Department of Transportation on the location of gas pipelines. While federal law and Commission orders generally give the Commission oversight responsibility for natural gas pipelines, the scope of this oversight is ambiguous. SB 705 requires natural gas corporations to develop, adopt, and implement service and safety plans. The bill specifies certain safety issues that must be addressed in the plans. For example, the plans must address maximum operating pressures for natural gas transmission lines and seismic safety issues. SB 705 (Leno) Page 1 The Public Utilities Commission is required to review and accept, modify, or reject the plans. Natural gas corporations are required to periodically review and update the plans, and the Commission is required to review any updates to the plans. The bill also reorganizes existing Public Utilities Code provisions governing the provision of natural gas service. Staff estimates that the Public Utilities Commission will require two additional positions to review proposed new safety plans. SB 44 (Corbett) requires the Public Utilities Commission to develop emergency response standards for natural gas transmission systems. That bill is on this committee's Suspense File. SB 216 (Yee) requires natural gas corporations to install automatic shut off valves or remote controlled valves on natural gas transmission lines in areas of high population density. That bill is on this committee's Suspense File. SB 879 (Padilla) requires the Public Utilities Commission to require natural gas utilities to account for ratepayer funds designated for pipeline maintenance and repair in a more transparent way. That bill will be heard in this committee.