BILL ANALYSIS Ó SB 879 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 879 (Padilla) - As Amended: July 12, 2011 Policy Committee: UtilitiesVote:13-0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill: 1)Requires the Public Utilities Commission (PUC)-in any ratemaking proceeding authorizing a gas corporation to recover expenses for (a) its federally-mandated transmission pipeline integrity management program or (b) capital expenditures for maintenance and repair of transmission pipelines-to require establishment of a balancing account for recovery of such expenses. 2)Requires that any unspent moneys in the balancing account at the end of each rate case cycle be returned to ratepayers. FISCAL EFFECT Any costs to the PUC would be minor and absorbable. COMMENTS 1)Purpose . Through the PUC's ratemaking process, a gas corporation's budget for a specified period (usually three or four years) is submitted, subject to public hearings, modified, and approved by the commission. With regard to funds budgeted for maintenance and repair, the gas corporations have been allowed to use this funding for repairs deemed most necessary over the funding cycle and have not been required to justify changes in spending or needed repairs to the PUC. According to the author, this bill is intended to increase the transparency of ratepayer funding for maintenance, repair and safety of gas transmission pipelines SB 879 Page 2 by requiring that funds authorized for these activities remain in a separate account specifically for this purpose. 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 PUC to require the installation of automatic shut-off valves or remote controlled valves on interstate natural gas transmission lines located in certain high-risk locations. c) SB 705 (Leno) requires natural gas utilities regulated by the PUC to develop service and safety plans. In addition, 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 pipeline safety-related projects. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081