SB 1371, as introduced, Leno. Natural gas: leakage abatement.
The California Constitution establishes the Public Utilities Commission with regulatory authority over public utilities, authorizes the commission to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process, and authorizes the commission to fix rates and establish rules for all public utilities, subject to control by the Legislature.
The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates 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.
This bill would require the commission to adopt rules and procedures governing the operation, maintenance, repair, and replacement of commission-regulated gas pipeline facilities to minimize leaks as a hazard to be mitigated pursuant to the Natural Gas Pipeline Safety Act of 2011 and to eliminate uncontrolled emissions of natural gas from commission-regulated gas pipeline facilities to the maximum extent feasible. The bill would require the commission to commence a proceeding by January 15, 2015, and to adopt rules and procedures not later than December 31, 2015. The bill would require that the rules and procedures provide for repair of leaks in commission-regulated gas pipeline facilities within a reasonable time after discovery, but require that leaks discovered in close proximity to residential and commercial buildings be repaired upon discovery so that the emission of leaking gas that can result in injury or loss of life will be substantially eliminated. The bill would additionally require that the rules and procedures establish best practices for leak surveys, patrols, leak survey technology, and metrics for evaluating and comparing leaks so that operators, the commission, and the public have accurate information about the number and severity of leaks and about the quantity of gas that is emitted to the atmosphere over time. The bill would require that the commission consider the costs of compliance with the rules and procedures and provide for cost recovery in rates charged to their customers by a gas corporation, consistent with the commission’s existing ratemaking procedures and authority to establish just and reasonable rates.
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 would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill 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:
The Legislature finds and declares all of the
2following:
3(a) The Legislature has established that safety of the natural gas
4pipeline infrastructure in California is a priority for the Public
5Utilities Commission and gas corporations.
P3 1(b) The incidence of natural gas leaks and their repair is
2considered by the industry and regulators to be a significant
3indicator of pipeline integrity and safety.
4(c) The Legislature has established a policy goal to significantly
5reduce emissions of greenhouse gases in California.
6(d) There is a growing awareness
of the potency of methane,
7the primary component of natural gas, as a greenhouse gas. The
8Intergovernmental Panel on Climate Change estimates that the
9global warming potential of methane is 84 times that of carbon
10dioxide over a 20-year time horizon.
11(e) Fugitive methane volumes from pipelines in California may
12exceed 35 billion cubic feet annually and may exceed 500 billion
13cubic feet nationwide.
14(f) Reducing these fugitive emissions by repairing pipeline leaks
15promptly and effectively advances both policy goals of natural gas
16pipeline safety and integrity and reducing emissions of greenhouse
17gases.
18(g) Reducing leaks and promoting pipeline integrity in California
19provides significant employment opportunities for California
20residents and for domestic fabricators of high quality pipeline
21materials.
22(h) Providing just and reasonable rate revenues for gas
23corporations to reduce leaks and repair them promptly when
24discovered, including employing an adequate workforce, is in the
25public interest, and promotes the interests of customers and the
26public.
Article 3 (commencing with Section 975) is added to
28Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
29read:
30
(a) For purposes of this chapter, “commission-regulated
34gas pipeline facility” has the same meaning as defined in Section
35950.
36(b) The commission shall adopt rules and procedures governing
37the operation, maintenance, repair, and replacement of
38commission-regulated gas pipeline facilities to achieve both of the
39following:
P4 1(1) Minimize leaks as a hazard to be mitigated pursuant to
2paragraph (1) of subdivision (d) of Section 961.
3(2) Eliminate uncontrolled emissions of natural gas from
4commission-regulated gas pipeline facilities to the maximum extent
5feasible, in order to advance the state’s goals in reducing emissions
6
of greenhouse gases pursuant to the California Global Warming
7Solutions Act of 2006 (Division 25.5 (commencing with Section
838500) of the Health and Safety Code).
9(c) Not later than January 15, 2015, the commission shall
10commence a proceeding to adopt rules and procedures for intrastate
11distribution lines and intrastate transmission lines, as respectively
12described in paragraphs (1) and (2) of subdivision (a) of Section
13950, to achieve the goals of subdivision (b). The commission shall
14adopt rules and procedures not later than December 31, 2015.
15(d) The rules and procedures shall provide for the repair of leaks
16in commission-regulated gas pipeline facilities within a reasonable
17time after discovery, consistent with eliminating hazards and
18reducing emissions to achieve the goals in subdivision (b). Leaks
19discovered in close proximity to residential and commercial
20buildings shall be
repaired upon discovery so that the emission of
21leaking gas that can result in injury or loss of life will be
22substantially eliminated.
23(e) The rules and procedures shall establish best practices for
24leak surveys, patrols, leak survey technology, and metrics for
25evaluating and comparing leaks so that operators, the commission,
26and the public have accurate information about the number and
27severity of leaks and about the quantity of natural gas that is
28emitted to the atmosphere over time. Best practices shall include
29evaluation of the quality of materials and equipment from various
30sources, including foreign and domestic third-party suppliers.
31(f) The rules and procedures, including best practices and repair
32standards, shall be incorporated into the safety plans required by
33Section 961.
34(g) Consistent with subdivision
(e) of Section 961, the
35commission shall facilitate robust ongoing participation of the
36workforce of gas corporations in all aspects of the proceeding.
As an element of the proceeding required by Section 975,
38the commission shall consider the costs of compliance with the
39rules and procedures and shall provide for cost recovery in rates
40charged to their customers by a gas corporation, consistent with
P5 1the commission’s existing ratemaking procedures and authority
2to establish just and reasonable rates. Cost considerations shall
3include all of the following:
4(a) Providing an adequate workforce to achieve the objectives
5of reducing hazards and emissions from leaks, including prompt
6leak repair and elimination.
7(b) Directing the revenues from any allowance for lost or
8unaccounted for natural gas to leak repair and elimination.
9(c) Providing guidance for treatment of expenditures as being
10either an item of expense or a capital investment.
No reimbursement is required by this act pursuant to
12Section 6 of Article XIII B of the California Constitution because
13the only costs that may be incurred by a local agency or school
14district will be incurred because this act creates a new crime or
15infraction, eliminates a crime or infraction, or changes the penalty
16for a crime or infraction, within the meaning of Section 17556 of
17the Government Code, or changes the definition of a crime within
18the meaning of Section 6 of Article XIII B of the California
19Constitution.
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