BILL ANALYSIS Ó
SB 291
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Date of Hearing: June 17, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 291 (Hill) - As Introduced: February 14, 2013
SENATE VOTE : 36-0
SUBJECT : Safety enforcement: gas and electrical corporations
SUMMARY : This bill requires the California Public Utilities
Commission (PUC) to develop and implement procedures for
issuance of citations by PUC staff to gas corporations and
electrical corporations for correction and punishment of safety
violations. Specifically, this bill :
a)Requires the PUC to develop and implement procedures for
issuing citations to gas and electric corporations for
correction and punishment of safety violations.
b)Requires the PUC to development and implement an appeals
process regarding issuances and appeal of citations.
EXISTING LAW :
1)Permits powers and duties of public officers of the PUC to be
delegated to deputies of the officers or authorized personnel
unless expressly prohibited by law. (Public Utilities Code,
PUC §7)
2)Declares that any public utility that violates or fails to
comply with any part or provision of any order, decision,
decree, rule, direction, demand, or requirement of the PUC is
subject to a penalty between $500 and $50,000 for each
offense. (PUC §2107)
3)PUC administrative rules, adopted by Resolutions of the PUC
allow PUC staff to issue citations for violations of PUC and
federal regulations:
Gas corporation safety compliance. (Resolution ALJ-274)
Water and sewer utilities. (Resolution W-4799)
Electricity resource adequacy (E-4195)
Renewables Portfolio Standard filing requirements
(E-4257)
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Propane (USRB-001)
Transportation entities: household goods carriers,
charter party carriers, and passenger stage corporations
(ROSB-002 and ALJ-187)
Telecommunication (UEB-002)
Mobilehome parks (SU-24)
1) Specifies that fines imposed shall be deposited to the
General Fund (PUC §§ 2000, 2104, 2104.5)
2) Authorizes the California Energy Commission (CEC), after
one or more hearings, to amend the conditions of, or revoke
the certification for, any power plant facility application
it has certified for any of the following reasons: a
material false statement set forth in the application; any
significant failure to comply with the terms or conditions
of approval of the application, a violation of any
regulation or order issued by the commission. Further
authorizes the CEC to issue a complaint for which a civil
penalty is proposed and hold a hearing within 60 days of
serving the compliant. Penalties assessed are to take into
account In setting the penalty the CEC is required to take
into consideration the nature, circumstance, extent, and
gravity of the violation or violations, whether the
violation is susceptible to removal or resolution, the cost
to the state in pursuing the enforcement action, and with
respect to the violator, the ability to pay, the effect on
ability to continue in business, any voluntary removal or
resolution efforts undertaken, any prior history of
violations, the degree of culpability, economic savings, if
any, resulting from the violation, and such other matters
as justice may require. Any money recovered by the CEC is
to be deposited in the General Fund.
(Public Resources Code 25534, 25534.1, 25534.2)
FISCAL EFFECT : Unknown.
COMMENTS :
1)Author's Statement . "SB 291 requires the PUC to develop
procedures to delegate citation authority to staff for
electric safety violations.
"Both the National Transportation Safety Board and the PUC's
own Independent Review Panel found the PUC's enforcement
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posture to have been weak before the San Bruno explosion.
Both bodies made the same specific recommendation: allow staff
to have the direct authority to fine for pipeline safety
violations.
"The reason for this is that the PUC's traditional enforcement
mechanism-opening a formal investigation-is administratively
burdensome. Formal investigations can take over a year and
are usually only done in the case of accidents that involve
multiple fatalities or extensive property damage, as in the
Southern California wildfires or the San Bruno explosion.
"Smaller violations that may nonetheless indicate serious
problems had been largely ignored at the PUC. After the San
Bruno reports came out, the PUC promptly followed their
recommendations for gas safety, but it has not yet done so for
electric safety, even though there have averaged 11 fatalities
per year from 2008 to 2011 on the facilities CPUC-
jurisdiction electric facilities.
"The PUC has delegated authority to staff to fine for
violations of gas safety, rail safety, water and sewer public
health, electric resource adequacy, RPS filing requirements,
and others.
"Electric safety is of paramount concern to the health and
wellbeing of Californians, and this bill will make sure the
PUC to recognize it as such."
2)Authority to issue Citations Currently Exists but Procedures
Vary . The author points out that the PUC has already delegated
authority to staff to fine for violations of gas safety, rail
safety, water and sewer public health, electric resource
adequacy, RPS filing requirements, and others.
Resolution ALJ-274 authorizes PUC staff to issue a written
citation to any gas corporation, stating the specific
violation, the amount of the fine, and information about how
to appeal the citation. Each citation will assess the maximum
penalty amount provided for by § 2107. Each day of an ongoing
violation may be penalized as an additional offense.
According to Resolution ALJ-274, before issuing a citation,
staff will generally consult with the Director or Deputy
Director of CPSD. The Respondent may either pay the penalty
or submit a Notice of Appeal. The procedures for issuing
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citations and for submitting a Notice of Appeal are set forth
Resolution ALJ-274. Specific to Resolution ALJ-274, local
authorities are to be notified.
Resolution W-4799 allows citations to be issued only after
written notice of non-compliance or violation has been given
to the water or sewer utility and the water or sewer utility
has failed to correct the non-compliance or violation in a
timely manner. A water or sewer utility that has been issued a
citation may accept the fine imposed or contest it through a
process of appeal. The procedures for appealing a citation are
set forth in Resolution W-4799.
Resolution UEB-001 authorizes staff to provide written notice
that a citation will be used and at least 15 calendar days for
the telecommunications provider to respond (plus an additional
15 calendar days upon request).
3)Citations Issued.
According to the PUC, in 2008 the PUC was issuing
approximately 6 citations per year for Resource Adequacy
Violations.
In 2009 the PUC adopted a citation program for RPS compliance
because several Load Serving Entities had failed to provide
complete or requested documentation.
According to the PUC website, PUC staff last issued $1,000
citations for slamming ("slamming" refers to switching a
consumer's telephone service from one carrier to another
without obtaining the consumer's consent) in 2010.
In February 2011, CPSD issued a report on numerous safety
violations found at several locations within the San Francisco
Metropolitan Transit Authority. No citation was issued. The
PUC opened an Order Instituting Investigation (OII) and
reached a settlement in March 2012 which required the Transit
Authority to take corrective actions. No fine was assessed for
the violations.
In December 2011, PG&E self-reported that it has failed to
perform gas pipeline leak surveys required every 5 years
within one of PG&E's regional divisions. According to CPSD no
injury or damage occurred and PG&E initiated corrective
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actions. CPSD cited PG&E $16.8 million for failure to conduct
pipeline leak surveys. PG&E appealed the method used by CPSD
staff to count the number of violations. The PUC upheld the
fine in March 2012.
In November 2012, CPSD issued $20,000 citations to Uber,
Sidecar, and Lyft, for violating safety rules applicable to
transportation carriers. In November the PUC opened in
investigation into ridesharing services. In early 2013 the PUC
entered into operating agreements with several of ridesharing
service companies.
In March 2013, PUC staff cited Live Oak Springs in the amount
of $67,500 for selling trucked water to Straub Construction.
In April 2013, the PUC announced citations given to numerous
moving, limousine, shuttle, and bus companies.
4)No Citation Authority for Electric System Safety? The author
points out that the PUC has not yet adopted a citation program
for safety of the electricity system. The author provided the
following information on electric system safety:
A newspaper article highlighting the large number of
underground electric fires in the Bay area, over 78 since
2005.
CPUC reports on 61 fatalities on the three electric
investor-owned utility facilities and 180 injuries since
2007, out of a total of 717 reported incidents.
The PUC has opened very few enforcement proceedings and
levied very few fines for electric safety. From 1999 to
October, 2010, the CPUC levied fines for electric safety
violations on five separate occasions.
CPUC Rulemaking 08-11-005 (R. 08-11-005) is revising rules for
General Orders (GOs) 95, 128, and 165, which concern overhead
electric line construction, construction of underground
electric supply and communication systems, and inspection
cycles for electric distribution facilities, respectively.
The rulemaking was opened in the wake of the series of the
2007 and 2008 wildfires in southern California that were
caused by electrical facilities. A PUC decision in January 12,
2012 adopted revised rules to reduce fire hazards, but did not
address the enforcement of violations to those rules, except
to modify some of the time periods a utility is allowed before
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correcting a non-conformance it discovers in surveys. Neither
the OIR nor the scoping memo for the current phase of the
proceeding mentions any proposed change in the enforcement of
these GOs.
1)Standard Procedures, Transparency, Staff Authority.
The PUC has adopted procedures for citations that, while
similar, provide different processes and procedures for
issuing a citation and ensuring corrective action. The PUC's
procedures are markedly different from the CEC's procedures in
that the CEC's procedures are specified in statute while the
PUC's procedures are specified in various resolutions.
The author may wish to clarify the bill to ensure that the PUC
implements a comprehensive safety enforcement program which
includes citations and penalties, establishes a process of
notification similar to the CEC's notification process,
authorizes staff to issue citations, and specifies that the
PUC must act on enforcement actions within a reasonable period
of time.
1702.5. (a) The commission, in an existing or new proceeding ,
shall develop and implement procedures for issuance of
citations by commission staff, under the direction of the
Executive Director, a safety enforcement program applicable to
gas corporations and electrical corporations, which includes
procedures for issuance of citations by commission or staff,
under the direction of the Executive Director. for correction
and punishment of safety violations . The safety enforcement
program shall be designed to improve gas and electric system
safety through the enforcement of any applicable or order or
rule of the commission related to safety and use a variety of
enforcement mechanisms, including the issuance of corrective
actions, orders, and citations by designated commission staff.
(1) When issuing citations and assessing penalties, the
commission or staff shall take into account, voluntary removal
or resolution efforts undertaken, any prior history of
violations, the gravity of the violation or violations, and
the degree of culpability.
(2) These procedures shall include, but are not limited to,
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providing notice of a violation and a reasonable period not to
exceed 30 calendar days for the respondent to correct the
violation, to allow one or more hearings within 60 days of
issuing a citation at the request of the respondent.
(3) The commission shall adopt an administrative limit on the
amount of any monetary penalty that may be set by commission
staff.
(b) The commission shall develop and implement an appeals
process to govern the issuance and appeal of citations or
resolution of corrective action orders issued by the
commission staff .
(c) The commission shall, within a reasonable time set by the
commission, conclude a safety enforcement action by
determining a finding of violation, by corrective action
order, citation, determination of no violation, or other
action. The Commission may always institute a formal
proceeding regarding alleged violations irrespective of any
enforcement action undertaken at the staff level.
(d) The commission shall implement the safety enforcement
program for gas safety by July 1, 2014 and the safety
enforcement program for electric safety no later than January
1, 2015.
REGISTERED SUPPORT / OPPOSITION :
Support
Division of Ratepayer Advocates (DRA)
The Utility Reform Network (TURN)
Opposition
None on File
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083