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 natural gas leakage abatement forend deletebegin insert the operation, maintenance, repair, and replacement ofend insert those commission-regulated gas pipeline facilities that are intrastate transmission and distribution linesbegin insert to
minimize leaks as a hazard to be mitigated pursuant to the Natural Gas Pipeline Safety Act of 2011 andend insert to reduce emissions of natural gasbegin insert from those facilities to the maximum extent feasible in order to advance the state’s goals in reducing emissions of greenhouse gasesend insert 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.end deletebegin insert 2015, to adopt those rules and procedures.end insert The bill would require the commission to consult with the state board, the gas corporation’s workforce, and those other state and federal entities that the commission determines have regulatory roles of relevance. The bill would
require that the rules and procedures provide for the maximum technologically feasible and cost-effective avoidance, reduction, and repair of leaks and leaking components 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 insert and prioritizationend insert of recorded leaks and leaking components by volume or energy content. The bill would require that the rules and procedures evaluate thebegin delete natural gas leakage abatement practicesend deletebegin insert operations, maintenance, and repair practicesend insert for 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 insert 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 insert
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, and nothing in this
6article shall compromise or deprioritize safety as a top
7consideration.
8(b) It is undisputed that natural gas pipelines and infrastructure
9in California leak natural gas. The incidence of natural gas leaks
P4 1and their repair is considered by the industry and regulators to be
2a significant indicator of pipeline integrity and
safety.
3(c) The Legislature has established a policy goal to significantly
4reduce emissions of greenhouse gases in California.
5(d) There is a growing awareness of the potency of methane,
6the primary component of natural gas, as a greenhouse gas. The
7Intergovernmental Panel on Climate Change estimates that the
8global warming potential of methane is 28 times that of carbon
9dioxide over a 100-year time horizon and 84 times that of carbon
10dioxide over a 20-year time horizon. There is also a growing
11awareness that climate change impacts impose high social costs,
12including impacts upon the public health and economy.
13(e) Reducing methane emissions by promptly and effectively
14repairing or replacing the pipes and associated
infrastructure that
15is responsible for these leaks advances both policy goals of natural
16gas pipeline safety and integrity and reducing emissions of
17greenhouse gases.
18(f) Existing federal and state rules and regulations pertaining to
19the natural gas transmission and distribution system and associated
20infrastructure were not developed for the purpose of preventing
21the climate change impacts from leaks of natural gas.
22(g) Examining the methods used by gas corporations under
23existing federal and state rules to conduct and schedule leak repair
24and prevention based on the implications of these practices with
25respect to emissions of greenhouse gases will enable a more
26thorough evaluation of whether existing practices are
27commensurate with California’s goals for reducing emissions of
28greenhouse
gases.
29(h) Reducing leaks and repairing pipelines and associated
30infrastructure in California provides significant employment
31opportunities for California residents and for domestic fabricators
32
of high quality pipeline materials and other equipment associated
33with finding and fixing leaks.
34(i) Providing just and reasonable rate revenues for gas
35corporations to find, categorize, and repair leaks promptly when
36discovered, including employing an adequate workforce, is in the
37public interest, and promotes the interests of customers and the
38public.
Article 3 (commencing with Section 975) is added to
2Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
3read:
4
(a) For purposes of this chapter, “commission-regulated
8gas pipeline facility” has the same meaning as defined in Section
9950.
10(b) The commission shall adopt rules and procedures governing
11begin delete natural gas leakage abatement forend deletebegin insert the operation, maintenance,
12repair, and replacement ofend insert those commission-regulated gas pipeline
13
facilities that are intrastate transmission and distribution lines, as
14described in paragraphs (1) and (2) of subdivision (a) of Section
15950, to begin deletereduce emissions of natural gas pursuant to the California
16Global Warming Solutions Act of 2006 (Division 25.5
17(commencing with Section 38500) of the Health and Safety Code).end delete
18begin insert achieve both of the following:end insert
19(1) Minimize leaks as a hazard to be mitigated pursuant to
20paragraph (1) of subdivision (d) of Section 961.
21(2) While giving due consideration to the cost considerations
22of Section 977,
reduce emissions of natural gas from those
23commission-regulated gas pipeline facilities that are intrastate
24transmission and distribution lines to the maximum extent feasible
25in order to advance the state’s goals in reducing emissions of
26greenhouse gases pursuant to the California Global Warming
27Solutions Act of 2006 (Division 25.5 (commencing with Section
2838500) of the Health and Safety Code).
29(c) Not later than January 15, 2015, the commission shall
30commence a proceeding to adopt rules and procedures for those
31commission-regulated pipeline facilities that are intrastate
32transmission and distribution lines, as respectively described in
33paragraphs (1) and (2) of subdivision (a) of Section 950, to achieve
34the goals of subdivision (b).
35(d) In developing the rules and procedures pursuant to
36subdivision
(c), the commission shall consult with the State Air
37
Resources Board, the gas corporation’s workforce, and those other
38state and federal entities that the commission determines have
39regulatory roles of relevance.
P6 1(e) The rules and procedures adopted pursuant to subdivision
2(c) shall accomplish all of the following:
3(1) Provide for the maximum technologically feasible and
4
cost-effective avoidance, reduction, and repair of leaks and leaking
5components in those commission-regulated gas pipeline facilities
6that are intrastate transmission and distribution lines within a
7reasonable time after discovery, consistent with the California
8Global Warming Solutions Act of 2006 (Division 25.5
9(commencing with Section 38500) of the Health and Safety Code)
10to achieve the goals in subdivision (b).
11(2) Provide for the repair of leaks as soon as reasonably
12possible after discovery, consistent with the goals of reducing air
13pollution and the climate change impacts of methane emissions.
14(2)
end delete
15begin insert(3)end insert Provide for the rankingbegin insert and prioritizationend insert of recorded leaks
16and leaking components by volume or energy content.
17(3)
end delete
18begin insert(4)end insert Evaluate thebegin delete natural gas leakage abatement practices forend delete
19begin insert
operations, maintenance, and repair practices ofend insert those
20commission-regulated gas pipeline facilities that are intrastate
21transmission and distribution lines to determine whether existing
22practices are effective at achieving the goals of subdivision (b)
23and determine whether alternative practices may be more effective
24at achieving the goals of subdivision (b).
25(4)
end delete
26begin insert(5)end insert Establish and require the use of best practices for leak
27surveys, patrols, leak survey technology, leak prevention, and leak
28reduction. The Commission shall consider in the development
of
29best practices the quality of materials and equipment from various
30sources, including foreign and domestic third-party suppliers.
31(6) Establish protocols and procedures for the development and
32use of metrics to quantify the volume of emissions from leaking
33components, and for evaluating and tracking leaks, both
34geographically and over time, so that operators, the commission,
35and the public have accurate information about the number and
36severity of leaks and about the quantity of natural gas that is
37emitted into the atmosphere over time.
38(7) To the extent feasible, require the owner of each
39commission-regulated gas pipeline facility that is an intrastate
40transmission or distribution line to calculate and report to the
P7 1commission a baseline systemwide leak rate, along with any data
2
and computer models used in making that calculation, to
3periodically update that systemwide leak rate calculation, and to
4annually report on measures that will be taken in the following
5year to reduce the systemwide leak rate to achieve the goals of
6subdivision (b).
7(f) The rules and procedures, including best practices and repair
8standards, shall be incorporated into the safety plans required by
9Section 961.
10(g) Consistent with subdivision (e) of Section 961, the
11commission shall facilitate robust ongoing participation of the
12workforce of gas corporations and those state and federal entities
13that have regulatory roles of relevance in all aspects of the
14proceeding. Nothing in this section affects the commission’s
15authority to determine eligibility for intervenor compensation.
Consistent with the commission’s existing ratemaking
17procedures and authority to establish just and reasonable rates,
18the commission shall consider all of the following:
19(a) Providing an adequate workforce to achieve the objectives
20of reducing hazards and emissions from leaks, including leak
21avoidance, reduction, and repair.
22(b) Directing the revenues from any allowance for lost or
23unaccounted for natural gas to leak avoidance, reduction, and
24repair.
25(c) Providing guidance for treatment of expenditures as being
26either an item of expense or a capital investment.
27(d) The
impact on affordability of gas service for vulnerable
28customers as a result of the incremental costs of compliance with
29the adopted rules and procedures.
30(e) The social and public costs associated with climate change
31and air pollution, including peer-reviewed estimates of the social
32costs of emissions of greenhouse gases.
No reimbursement is required by this act pursuant to
34Section 6 of Article XIII B of the California Constitution because
35the only costs that may be incurred by a local agency or school
36district will be incurred because this act creates a new crime or
37infraction, eliminates a crime or infraction, or changes the penalty
38for a crime or infraction, within the meaning of Section 17556 of
39the Government Code, or changes the definition of a crime within
P8 1the meaning of Section 6 of Article XIII B of the California
2Constitution.
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94