BILL NUMBER: SB 879	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 1, 2011
	AMENDED IN ASSEMBLY  JULY 12, 2011
	AMENDED IN SENATE  MAY 11, 2011

INTRODUCED BY   Senator Padilla
    (   Coauthor:   Assembly Member  
Hill   ) 

                        FEBRUARY 18, 2011

   An act to  add Chapter 4.5 (commencing with Section 950)
to Part 1 of Division 1 of   amend Section 2107 of, and
to add Section 969 to,  the Public Utilities Code, relating to
 public utilities   gas corporations  .


	LEGISLATIVE COUNSEL'S DIGEST


   SB 879, as amended, Padilla. Natural gas pipelines: safety.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including gas corporations, as
defined. The Public Utilities Act authorizes the commission to
establish a system of accounts to be kept by public utilities and to
prescribe the manner in which accounts are kept, the records and
memorandum to be kept, as well as the receipts and expenditures of
moneys, and any other forms, records, and memoranda that in the
judgment of the commission may be necessary to carry out any of the
provisions of the act. The act requires the commission to require a
public utility to establish and maintain a reserve account reflecting
any positive or negative balance whenever the commission authorizes
any change in rates reflecting and passing specific changes in costs
through to customers, and requires the commission to take any
positive or negative balance remaining into account by appropriate
adjustment or other action at the time of any subsequent rate
adjustment.
   This bill would require, in any ratemaking proceeding in which the
commission authorizes a gas corporation to recover expenses for the
gas corporation's transmission pipeline integrity management program
 established pursuant to specified federal pipeline safety law
 or  related  capital expenditures for maintenance and
repair of transmission pipelines, that the commission require the gas
corporation to establish and maintain a balancing account for the
recovery of those expenses. 
   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.
 
   Existing law provides that any public utility that violates any
provision of the California Constitution or the Public Utilities Act,
or that fails or neglects to comply with any order, decision,
decree, rule, direction, demand, or requirement of the commission,
where a penalty has not otherwise been provided, is subject to a
penalty of not less that $500 and not more than $20,000 for each
offense.  
   This bill would increase the maximum amount of the penalty to
$50,000. 
   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  certain of  the provisions of this bill are
within the act and require action by the commission to implement its
requirements, a violation of these provisions 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.    Section 969 is added to the  
Public Utilities Code  , to read:  
   969.  In any ratemaking proceeding in which the commission
authorizes a gas corporation to recover expenses for the gas
corporation's transmission pipeline integrity management program
established pursuant to Subpart O (commencing with Section 192.901)
of Part 192 of Title 49 of the United States Code or related capital
expenditures for the maintenance and repair of transmission
pipelines, the commission shall require the gas corporation to
establish and maintain a balancing account for the recovery of those
expenses. Any unspent moneys in the balancing account in the form of
an accumulated account balance at the end of each rate case cycle,
plus interest, shall be returned to ratepayers through a true-up
filing. Nothing in this section is intended to interfere with the
commission's discretion to establish a two-way balancing account.

   SEC. 2.    Section 2107 of the   Public
Utilities Code   is amended to read: 
   2107.  Any public utility which   that 
violates or fails to comply with any provision of the Constitution of
this state or of this part, or  which   that
 fails or neglects to comply with any part or provision of any
order, decision, decree, rule, direction, demand, or requirement of
the commission, in a case in which a penalty has not otherwise been
provided, is subject to a penalty of not less than five hundred
dollars ($500), nor more than  twenty thousand dollars
($20,000)   fifty thousand dollars ($50,000)  for
each offense.
   SEC. 2.    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.  
  SECTION 1.    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.  GAS PIPELINE 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 to the extent authorized in
the certification submitted by the commission and approved by the
United States Secretary of Transportation pursuant to Section 60105
of Title 49 of the United States Code, including each 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.
   (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.

      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.
   969.  In any ratemaking proceeding in which the commission
authorizes a gas corporation to recover expenses for the gas
corporation's transmission pipeline integrity management program
established pursuant to Subpart O (commencing with Section 192.901)
of Part 192 of Title 49 of the United States Code or capital
expenditures for the maintenance and repair of transmission
pipelines, the commission shall require the gas corporation to
establish and maintain a balancing account for the recovery of those
expenses. Any unspent moneys in the balancing account in the form of
an accumulated account balance at the end of each rate case cycle,
plus interest, shall be returned to ratepayers through a true-up
filing.  
  SEC. 2.    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.