Amended in Assembly March 25, 2014

Amended in Assembly March 12, 2014

Amended in Assembly August 7, 2013

Amended in Assembly June 19, 2013

Amended in Senate May 8, 2013

Amended in Senate April 4, 2013

Senate BillNo. 699


Introduced by Senator Hill

February 22, 2013


An act tobegin delete add Sections 761.4 and 761.6 toend deletebegin insert amend Section 364 ofend insert the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

SB 699, as amended, Hill. Public utilities: electrical and gas corporations.

begin insert

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law requires the commission to adopt inspection, maintenance, repair, and replacement standards for the distribution systems of electrical corporations in order to provide high-quality, safe, and reliable service. Existing law requires the commission to conduct a review to determine whether the standards have been met and to perform the review after every major outage.

end insert
begin insert

This bill would require the commission to adopt rules to address security threats to the distribution systems of electrical corporations, to be adopted by the commission with inspection, maintenance, repair, and replacement standards no later than July 1, 2015.

end insert
begin delete

The Public Utilities Act requires the Public Utilities Commission to implement and enforce standards for the maintenance and operation of facilities for the generation of electricity owned by an electrical corporation or located in the state to ensure their reliable operation.

end delete
begin delete

This bill would require an electrical corporation, by July 1, 2015, to submit to the commission a security plan to enhance the robustness and resilience of its electrical distribution facilities. The bill would require the commission, in consultation with the electrical corporation and applicable local, state, and federal agencies to determine the appropriate level of public access to the security plan. The bill would require the commission to consider the cost of constructing distribution infrastructure necessary to implement the security plan as a part of the next general rate case for the electrical corporation.

end delete
begin delete

This bill would require an electrical or gas corporation to develop an official memorandum of understanding with state and local law enforcement officials describing each party’s responsibilities before, during, and immediately following the deliberate destruction of that corporation’s equipment that leads to a disruption of electric or gas service. The bill would require an electrical or gas corporation, after consultation with, and approval from, the Department of the California Highway Patrol, to train and designate relevant employees as first responders to manage infrastructure hazards and restore essential electric or gas service in the event of an accident, natural disaster, or security breach.

end delete

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 the provisions of this bill are within the actbegin insert and require action by the commission to implement its requirementsend insert, a violation of these provisions would impose a state-mandated local program bybegin delete creating a newend deletebegin insert expanding the definition of aend insert 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:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertThe Legislature finds and declares all of the
2following:end insert

begin insert

3(a) Physical or electronic threats to the electrical distribution
4system could threaten public health and safety and disrupt
5economic activity in California.

end insert
begin insert

6(b) Ensuring appropriate actions are taken to protect and secure
7vulnerable electrical distribution system assets from physical or
8electronic threats that could disrupt safe and reliable electric
9service, or disrupt essential public services, including safe drinking
10water supplies, are in the public interest.

end insert
begin insert

11(c) Proper planning, in coordination with the appropriate
12federal and state regulatory and law enforcement authorities, will
13help prepare for attacks on the electrical distribution system and
14thereby help reduce the potential consequences of such attacks.

end insert
15begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 364 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is amended
16to read:end insert

17

364.  

(a) The commission shall adopt inspection, maintenance,
18repair, and replacement standardsbegin insert, and adopt rules to address
19security threats,end insert
for the distribution systems ofbegin delete investor-owned
20electric utilities no later than March 31, 1997end delete
begin insert electrical
21corporations by no later than July 1, 2015end insert
. The standards, which
22shall be performance or prescriptive standards, or both,begin insert and may
23be based on risk management,end insert
as appropriate, for each substantial
24type of distribution equipment or facility, shall provide forbegin delete high
25quality, safeend delete
begin insert high-quality, safe,end insert and reliable service.

26(b) In setting its standards, the commission shall consider: cost,
27local geography and weather, applicable codes,begin insert potential security
28threats,end insert
national electric industry practices, sound engineering
29judgment, and experience. The commission shall also adopt
30standards for operation, reliability, and safety during periods of
31emergency and disaster. The commission shall require eachbegin delete utilityend delete
32begin insert electrical corporationend insert to report annually on its compliance with
33the standards. That report shall be made available to the public.

34(c) The commission shall conduct a review to determine whether
35the standards prescribed in this section have been met. If the
36commission finds that the standards have not been met, the
37commission may order appropriate sanctions, including penalties
38in the form of rate reductions or monetary fines. The review shall
P4    1be performed after every major outage. Any money collected
2pursuant to this subdivision shall be used to offset funding for the
3California Alternative Rates for Energy Program.

begin delete
4

SECTION 1.  

Section 761.4 is added to the Public Utilities
5Code
, to read:

6

761.4.  

(a) On or before July 1, 2015, an electrical corporation
7shall submit to the commission a security plan to enhance the
8robustness and resilience of its electrical distribution facilities that
9identifies improvements to achieve all of the following:

10(1) Make the electric power delivery system less vulnerable to
11security threats, whether physical, cyber, or personnel-related,
12which may include the hardening of key substations and control
13centers, increased physical surveillance, and increased air gapping
14of electronic communication and control systems.

15(2) Reduce the consequence of successful security breaches,
16which may include more robust substation and grid design,
17 infrastructure modernization, and selective demandside
18management.

19(3) Improve the speed of electric power restoration in the event
20of a successful security breach, which may include enhanced
21training of relevant personnel, improved blackstart capability, and
22acquisition of convenient locations for critical spare parts.

23(4) Make critical services less vulnerable while the delivery of
24conventional electric power has been disrupted, which may include
25the avoidance of cross dependencies and the collocation of
26generation or storage with critical loads such as pumps for water
27supply.

28(b) In developing the security plan, an electrical corporation
29shall consider improvements that can be incorporated
30cost-effectively and consistently with reductions or increases in
31local generation capacity needs, safety and reliability needs,
32planned efforts to promote distributed resources, demandside
33management, smart grid, and other security efforts undertaken at
34the regional and national level.

35(c) The commission, in consultation with the electrical
36corporation and applicable local, state, and federal agencies, shall
37determine an appropriate level of public access to the security plan
38submitted by the electrical corporation that is consistent with
39Section 583 and existing commission policies. A determination
40that the commission makes regarding public access to security
P5    1plans shall not create barriers to essential information sharing
2among local, state, and federal law enforcement and emergency
3response agencies. The commission shall make this determination
4before accepting the security plan from an electrical corporation.

5(d) The commission shall review each security plan and approve,
6or modify and approve, the plan for that electrical corporation.

7(e) The commission shall consider the costs of constructing
8distribution infrastructure necessary to implement the security plan
9as a part of the next general rate case for the electrical corporation
10unless the commission determines otherwise. The commission
11may adopt criteria, benchmarks, and accountability mechanisms
12to evaluate the success of any investment authorized pursuant to
13the security plan.

14

SEC. 2.  

Section 761.6 is added to the Public Utilities Code, to
15read:

16

761.6.  

(a) An electrical or gas corporation shall develop an
17official memorandum of understanding with state and local law
18enforcement officials that describes each party’s responsibilities
19before, during, and immediately following the deliberate
20destruction of the electrical or gas corporation’s equipment that
21leads to a disruption of electric or gas service. The memorandum
22of understanding shall provide a clear understanding of who is in
23charge and explain how decisions will be reached in dealing with
24potential tensions between crime scene investigation and timely
25restoration of service, as well as with unanticipated contingencies.

26(b) An electrical or gas corporation, after consultation with, and
27approval from, the Department of the California Highway Patrol,
28shall train and designate relevant employees as first responders to
29manage infrastructure hazards and restore essential electric and
30gas service in the event of an accident, natural disaster, or security
31breach. The Department of the California Highway Patrol may
32impose any requirements necessary to ensure that the designation
33of relevant electrical or gas corporation employees promotes public
34health, safety, and security.

end delete
35

SEC. 3.  

No reimbursement is required by this act pursuant to
36Section 6 of Article XIII B of the California Constitution because
37the only costs that may be incurred by a local agency or school
38district will be incurred because this act creates a new crime or
39infraction, eliminates a crime or infraction, or changes the penalty
40for a crime or infraction, within the meaning of Section 17556 of
P6    1the Government Code, or changes the definition of a crime within
2the meaning of Section 6 of Article XIII B of the California
3Constitution.



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