SB 1371, as amended, 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.
The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt regulations to require the reporting and verification of emissions of greenhouse gases and to monitor and enforce compliance with the reporting and verification program, and requires the state board to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990, to be achieved by 2020.
This bill would require the commission to adopt rules and procedures governingbegin delete the operation, maintenance, repair, and replacement ofend deletebegin insert natural gas leakage abatement forend insert those commission-regulated gas pipeline facilities that are intrastate transmission and distribution lines tobegin delete minimize leaks as a hazard to be mitigated pursuant to the Natural Gas Pipeline Safety Act of 2011 and toend delete
reduce emissions of natural gasbegin delete from those facilities to the maximum extent feasible in order to advance the state’s goals in reducing emissions of greenhouse gasesend delete pursuant to the California Global Warming Solutions Act of 2006. The bill would require the commission to commence a proceeding by January 15,begin delete 2015, and to adopt rules and procedures not later than December 31,end delete 2015. The bill would require the commission to consult with the state boardbegin insert, the gas corporation’s workforce,end insert and those other state and federal entities that the commission determines have regulatory roles ofbegin delete relevance to the rules and procedures under consideration.end deletebegin insert
relevance.end insert The bill would require that the rules and procedures provide for the maximum technologically feasible and cost-effective avoidance, reduction, and repair of leaksbegin insert and leaking componentsend insert in those commission-regulated gas pipeline facilities that are intrastate transmission and distribution lines within a reasonable time after discovery. The bill would require the rules and procedures to provide for the rankingbegin delete, by volume, of leaks recorded by each commission-regulated gas pipeline facility that is an intrastate transmission or distribution line
and require the implementation of programs that provide for the ongoing repair of leaks that are in the top 20% of gas volumes leaked on an annual basis.end deletebegin insert of recorded leaks and leaking components by volume or energy content.end insert The bill would require that the rules and procedures evaluate thebegin delete operations, maintenance, and repair practices ofend deletebegin insert natural gas leakage abatement practices forend insert those facilities to determine whether existing practices are effective at achieving the goals of the bill and to determine whether alternative practices may be more effective at achieving the goals of the bill. The bill would require that the rules and procedures establish and require the use of best practices for leak surveys,
patrols, leak survey technology, leak prevention, and leak reduction.begin delete The bill would require the rules and procedures to establish protocols and procedures for the development and use of metrics to
quantify the volume of emissions from leaking components, and for evaluating and tracking leaks, both geographically and over time, 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 rules and procedures, to the extent feasible, require the owner of each commission-regulated gas pipeline facility that is an intrastate transmission or distribution line to calculate and report to the commission a baseline systemwide leak rate, to periodically update that systemwide leak rate calculation, and to annually report measures that will be taken in the following year to reduce the systemwide leak rate to achieve the goals of the bill. The bill would require that the commission consider
specified topics in a manner consistent with the commission’s existing ratemaking procedures and authority to establish just and reasonable rates.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 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:
begin insertThe Legislature finds and declares all of the
2following:end insert
3(a) The Legislature has established that safety of the natural
4gas pipeline infrastructure in California is a priority for the Public
5Utilities Commission and gas corporations, and nothing in this
P4 1article shall compromise or deprioritize safety as a top
2consideration.
3(b) It is undisputed that natural gas pipelines and infrastructure
4in California leak natural gas. The incidence of natural gas leaks
5and their repair is considered by the industry and regulators to
6be a significant indicator of pipeline integrity and safety.
7(c) The Legislature has established a policy goal to significantly
8reduce emissions of greenhouse gases in California.
9(d) There is a growing awareness of the potency of methane,
10the primary component of natural gas, as a greenhouse gas. The
11Intergovernmental Panel on Climate Change estimates that the
12global warming potential of methane is 28 times that of
carbon
13dioxide over a 100-year time horizon and 84 times that of carbon
14dioxide over a 20-year time horizon. There is also a growing
15awareness that climate change impacts impose high social costs,
16including impacts upon the public health and economy.
17(e) Reducing methane emissions by promptly and effectively
18repairing or replacing the pipes and associated infrastructure that
19 is responsible for these leaks advances both policy goals of natural
20gas pipeline safety and integrity and reducing emissions of
21greenhouse gases.
22(f) Existing federal and state rules and regulations pertaining
23to the natural gas transmission and distribution system and
24associated infrastructure
were not developed for the purpose of
25preventing the climate change impacts from leaks of natural gas.
26(g) Examining the methods used by gas corporations under
27existing federal and state rules to conduct and schedule leak repair
28and prevention based on the implications of these practices with
29respect to emissions of greenhouse gases will enable a more
30thorough evaluation of whether existing practices are
31commensurate with California’s goals for reducing emissions of
32greenhouse gases.
33(h) Reducing leaks and repairing pipelines and associated
34infrastructure in California provides significant employment
35opportunities for California residents and for domestic fabricators
36
of high quality pipeline materials and other equipment associated
37with finding and fixing leaks.
38(i) Providing just and reasonable rate revenues for gas
39corporations to find, categorize, and repair leaks promptly when
40discovered, including employing an adequate workforce, is in the
P5 1public interest, and promotes the interests of customers and the
2public.
Article 3 (commencing with Section 975) is added to
5Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
6read:
7
The Legislature finds and declares all of the following:
11(a) The Legislature has established that safety of the natural gas
12pipeline infrastructure in California is a priority for the Public
13Utilities Commission and gas corporations, and nothing in this
14article shall compromise or deprioritize safety as a top
15consideration.
16(b) It is undisputed that natural gas pipelines and infrastructure
17in California leak natural gas. The incidence of natural gas leaks
18and their repair is considered by the industry and regulators to be
19a significant indicator of pipeline integrity and safety.
20(c) The Legislature has established a policy goal to significantly
21reduce emissions of greenhouse gases in California.
22(d) There is a growing awareness of the potency of methane,
23
the primary component of natural gas, as a greenhouse gas. The
24Intergovernmental Panel on Climate Change estimates that the
25global warming potential of methane is 28 times that of carbon
26dioxide over a 100-year time horizon and 84 times that of carbon
27dioxide over a 20-year time horizon. There is also a growing
28awareness that climate change impacts impose high social costs,
29including impacts upon the public health and economy.
30(e) Reducing methane emissions by promptly and effectively
31repairing or replacing the pipes and associated infrastructure that
32is responsible for these leaks advances both policy goals of natural
33gas pipeline safety and integrity and reducing emissions of
34greenhouse gases.
35(f) Existing federal and state rules and regulations pertaining to
36the natural gas transmission and distribution system and associated
37infrastructure were not developed for the purpose of preventing
38the climate change impacts from leaks of natural gas.
39(g) Examining the methods used by gas corporations under
40existing federal and state rules to conduct and schedule leak repair
P6 1and prevention based on the implications of these practices with
2respect to emissions of greenhouse gases will enable a more
3thorough evaluation of whether existing practices are
4commensurate with California’s goals for reducing emissions of
5greenhouse gases.
6(h) Reducing leaks and repairing pipelines and associated
7infrastructure
in California provides significant employment
8opportunities for California residents and for domestic fabricators
9of high quality pipeline materials and other equipment associated
10with finding and fixing leaks.
11(i) Providing just and reasonable rate revenues for gas
12corporations to find, categorize, and repair leaks promptly when
13discovered, including employing an adequate workforce, is in the
14public interest, and promotes the interests of customers and the
15public.
(a) For purposes of this chapter, “commission-regulated
18gas pipeline facility” has the same meaning as defined in Section
19950.
20(b) The commission shall adopt rules and procedures governing
21begin delete the operation, maintenance, repair, and replacement ofend deletebegin insert natural gas
22leakage abatement forend insert those commission-regulated gas pipeline
23
facilities that are intrastate transmission and distribution lines, as
24described in paragraphs (1) and (2) of subdivision (a) of Section
25950, tobegin delete achieve both of the following:end deletebegin insert reduce emissions of natural
26gas pursuant to the California Global Warming Solutions Act of
272006 (Division 25.5 (commencing with Section 38500) of the
28Health and Safety Code). end insert
29(1) Minimize leaks as a hazard to be mitigated pursuant to
30paragraph (1) of subdivision (d) of Section 961.
31(2) While giving due consideration to the cost considerations
32of Section 977, reduce emissions of natural gas from those
33commission-regulated gas pipeline facilities that are intrastate
34transmission and distribution lines to the maximum extent feasible
35in order to advance the state’s goals in reducing emissions of
36greenhouse gases pursuant to the California Global Warming
37Solutions Act of 2006 (Division 25.5 (commencing with Section
3838500) of the Health and Safety Code).
39(c) Not later than January 15, 2015, the commission shall
40commence a proceeding to adopt rules and procedures for
those
P7 1commission-regulated pipeline facilities that are intrastate
2transmission and distribution lines, as respectively described in
3paragraphs (1) and (2) of subdivision (a) of Section 950, to achieve
4the goals of subdivision (b).begin delete The commission shall consult with
5the State Air Resources Board and those other state and federal
6entities that the commission determines have regulatory roles of
7relevance to the rules and procedures under consideration. The
8commission shall adopt rules and procedures not later than
9December 31, 2015.end delete
10(d) In developing the rules and procedures pursuant to
11subdivision (c), the commission shall consult with the State Air
12
Resources Board, the gas corporation’s workforce, and those other
13state and federal entities that the commission determines have
14regulatory roles of relevance.
15(d)
end delete
16begin insert(e)end insert The rules and procedures adopted pursuant to subdivision
17(c) shall accomplish all of the following:
18(1) Provide for the maximum technologically feasible and
19
cost-effective avoidance, reduction, and repair of leaksbegin insert and leaking
20componentsend insert in those commission-regulated gas pipeline facilities
21that are intrastate transmission and distribution lines within a
22reasonable time after discovery, consistent with the California
23Global Warming Solutions Act of 2006 (Division 25.5
24(commencing with Section 38500) of the Health and Safety Code)
25to achieve the goals in subdivision (b).
26(2) Provide for the repair of leaks as soon as reasonably possible
27after discovery, consistent with the goals of reducing air pollution
28and the climate change impacts of methane emissions.
29(3) Commensurate with a goal of reducing systemwide emissions
30of methane, provide for a ranking, by volume, of leaks recorded
31by each commission-regulated gas pipeline facility that is an
32intrastate transmission or distribution line and require the
33implementation of programs that, at a minimum, provide for the
34ongoing repair of leaks that are in the top 20 percent of gas volumes
35leaked on an annual basis.
36(2) Provide for the ranking of recorded leaks and leaking
37components by volume or energy content.
38(4)
end delete
39begin insert(3)end insert Evaluate thebegin delete operations, maintenance,
and repair practices
40ofend delete
P8 1commission-regulated gas pipeline facilities that are intrastate
2transmission and distribution lines to determine whether existing
3practices are effective at achieving the goals of subdivision (b)
4and determine whether alternative practices may be more effective
5at achieving the goals of subdivision (b).
6(5)
end delete
7begin insert(4)end insert Establish and require the use of best practices for leak
8surveys, patrols, leak survey technology, leak
prevention, and leak
9reduction.begin delete Best practices shall include evaluation of the quality of begin insert The Commission shall consider
10materials and equipment from various sources, including foreign
11and domestic third-party suppliers.end delete
12in the development of best practices the quality of materials and
13equipment from various sources, including foreign and domestic
14third-party suppliers.end insert
15(6) Establish protocols and procedures for the development and
16use of metrics to quantify the volume of emissions from leaking
17components, and for evaluating and tracking leaks, both
18geographically and over time, so that operators, the commission,
19and the public have accurate information about the number and
20severity of leaks and about the quantity of natural gas that is
21emitted into the atmosphere over time.
22(7) To the extent feasible, require the owner of each
23commission-regulated gas pipeline
facility that is an intrastate
24transmission or distribution line to calculate and report to the
25commission a baseline systemwide leak rate, along with any data
26and computer models used in making that calculation, to
27periodically update that systemwide leak rate calculation, and to
28annually report on measures that will be taken in the following
29year to reduce the systemwide leak rate to achieve the goals of
30subdivision (b).
31(e) The rules and procedures, including best practices and repair
32standards, shall be incorporated into the safety plans required by
33Section 961.
34(f) Consistent with subdivision (e) of Section 961, the
35commission shall facilitate robust ongoing
participation of the
36workforce of gas corporations and those state and federal entities
37that have regulatory roles of relevance in all aspects of the
38proceeding.
Nothing in this section affects the commission’s
39authority to determine eligibility for intervenor compensation.
Consistent with the commission’s existing ratemaking
2procedures and authority to establish just and reasonable
rates, the
3commission shall consider all of the following:
4(a) Providing an adequate workforce to achieve the objectives
5of reducing hazards and emissions from leaks, including leak
6
avoidance, reduction, and repair.
7(b) Directing the revenues from any allowance for lost or
8unaccounted for natural gas to leak avoidance, reduction, and
9repair.
10(c) Providing guidance for treatment of expenditures as being
11either an item of expense or a capital investment.
12(d) The impact on affordability of gas service for vulnerable
13customers as a result of the incremental costs of compliance with
14the adopted rules and procedures.
15(e) The social and public costs associated with climate change
16and air pollution, including peer-reviewed estimates of the social
17costs of emissions of
greenhouse gases.
No reimbursement is required by this act pursuant to
20Section 6 of Article XIII B of the California Constitution because
21the only costs that may be incurred by a local agency or school
22district will be incurred because this act creates a new crime or
23infraction, eliminates a crime or infraction, or changes the penalty
24for a crime or infraction, within the meaning of Section 17556 of
25the Government Code, or changes the definition of a crime within
26the meaning of Section 6 of Article XIII B of the California
27Constitution.
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