BILL ANALYSIS Ó
SB 705
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Date of Hearing: August 17, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 705 (Leno) - As Amended: August 15, 2011
Policy Committee:
UtilitiesVote:13-2
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires natural gas utilities to develop plans for
the safe operation of their pipeline facilities. Specifically,
this bill:
1)The bill requires every gas corporation regulated by the
Public Utilities Commission (PUC) to develop a plan, to
include specified elements, for the safe and reliable
operation of commission-regulated gas pipeline facilities, as
defined, that implements a policy stating that the PUC and the
gas corporations make safety of the public and of corporation
employees a top priority, and does so consistent with the
principle of just and reasonable cost-based rates.
2)Requires the PUC, by December 31, 2012 to act on the plans
developed per (1), which the utilities are required to
implement.
3)Requires the PUC to require gas corporations to periodically
update their plans, which the commission shall act on at
regular intervals.
4)Requires the PUC and the gas corporations to provide for
ongoing participation of gas corporation employees in the
development and implementation of the plans.
5)Stipulates the PUC is the state authority responsible for
regulating and enforcing gas pipeline facilities, including a
state pipeline safety program certification as required under
federal law.
SB 705
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FISCAL EFFECT
The PUC will incur additional costs to review the safety plans
and to facilitate ongoing input from employees in the
development and implementation of the plans. Given the brief
timeframe to act on the initial plans and the ongoing nature of
these tasks, the commission will require three engineer
positions for the first year at a cost of $350,000, and two
positions annually thereafter at a cost of about $240,000.
ÝPublic Utilities Reimbursement Account]
COMMENTS
1)Purpose . On September 9, 2010, a natural gas transmission
pipeline owned by PG&E exploded in San Bruno. The explosion
killed eight people, injured numerous others, and destroyed 38
homes. Following this tragedy, the author believes California
needs a statutory state policy placing safety first in
pipeline operations under PUC jurisdiction. To implement such
a policy, the bill requires the gas utilities to develop and
submit safety plans for PUC review and approval, and to update
these plans on a regular basis.
2)Related Legislation . The following bills are also on today's
committee agenda:
a) SB 44 (Corbett) requires the PUC to set emergency
response standards for gas pipeline and distribution
systems and requires that access to pipeline maps be made
accessible to the State Fire Marshal and the local fire
marshal.
b) SB 216 (Yee) requires the Public Utilities Commission
(PUC) to require the installation of valves on interstate
natural gas transmission lines in specified areas.
c) SB 879 (Padilla) requires the PUC to require more
transparency in how natural gas utilities account for
ratepayer funds designated for pipeline maintenance and
repair.
d) AB 56 (Hill), pending in Senate Appropriations, contains
almost identical provisions as SB 216, and in addition
requires gas utilities to pressure test interstate
transmission lines and to report biannually to the PUC on
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pipeline safety-related projects.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081