BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1371| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1371 Author: Leno (D), et al. Amended: 5/27/14 Vote: 21 SENATE ENERGY, UTIL. & COMMUNIC. COMMITTEE : 8-1, 4/29/14 AYES: Padilla, Block, Cannella, Corbett, DeSaulnier, Hill, Pavley, Wolk NOES: Knight NO VOTE RECORDED: Fuller, De León SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14 AYES: De León, Hill, Lara, Padilla, Steinberg NOES: Walters, Gaines SUBJECT : Natural gas: leakage abatement SOURCE : Utility Workers Union of America DIGEST : This bill requires the Public Utilities Commission (PUC) to adopt rules and procedures to minimize leaks on the PUC regulated intrastate gas pipeline facilities for the protection of public and worker safety and to reduce the state's greenhouse gas (GHG) emissions. ANALYSIS : Existing federal law and general order of the PUC generally requires hazardous leaks in natural gas transmission and distribution pipelines to be repaired "promptly" and direct each gas utility to establish grades indicating the definition of, and repair schedule for, leaks in their pipeline system. CONTINUED SB 1371 Page 2 Existing law: 1. Directs the California Air Resources Board (ARB) to establish rules and regulations to achieve technologically feasible and cost-effective GHG emission reductions, as specified. 2. Directs the PUC to regulate intrastate gas pipeline facilities pursuant to federal law. 3. Requires that the PUC and each gas corporation place safety of the public and gas corporation employees as the top priority and take all reasonable and appropriate actions to carry out this policy priority. 4. Requires each gas corporation to develop, adopt, and implement a plan for the safe and reliable operation of its gas pipeline facilities that is consistent with best practices in the gas industry and that provides for the following: A. Preventive and reactive maintenance and repair; B. Effective patrol and inspection to detect leaks and effect timely repairs; C. Timely response to customer and employee reports of leaks; and D. Adequately sized, qualified, and properly trained workforce to carry out the plan. 5. Directs the PUC to determine the reasonableness of operational costs and design rates for public utilities. Authorizes the PUC to fix rates, charges, standards, and practices for service. This bill: 1. Requires the PUC to adopt rules and procedures governing natural gas leakage abatement for the PUC regulated CONTINUED SB 1371 Page 3 intrastate transmission and distribution lines to reduce emissions of natural gas pursuant to the California Global Warming Solutions Act of 2006. 2. Provides that a proceeding to adopt these rules and procedures into the utilities' safety plan will be required to commence by January 15, 2015. 3. States that in developing the rules and procedures the PUC shall consult with the ARB, the gas corporation's workforce, and those other state and federal entities that the PUC determines have regulatory roles of relevance. 4. Provides that the rules and procedures will be required to achieve specified objectives, which include, among other things, the following: A. To provide for the maximum technologically feasible and cost-effective repair of leaks and leaky components within a reasonable time frame after discovery. B. To provide for the ranking of recorded leaks and leaking components by volume or energy content. C. To evaluate the natural gas leakage abatement practices for the PUC regulated gas pipeline facilities to determine whether existing practices are effective. D. To establish and require the use of best practices for leak surveys, patrols, leak survey technology, leak prevention, and leak reduction. Requires the PUC consider in the development of best practices the quality of materials and equipment from various sources, including foreign and domestic third-party suppliers. Comments The author's office, many global warming experts are now concerned that transition from coal to natural gas will fail as an energy strategy of methane emissions at all points are not curtailed. Fixing leaky gas pipelines provides a policy two-fer by improving safety and reducing GHGs. It also employs California workers, providing an economic rationale for the bill. CONTINUED SB 1371 Page 4 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: One-time costs of approximately $250,000 from the PUC Reimbursement Account (special) in FY 2015-16 to the PUC for the required proceeding to develop rules and procedures for leak minimization. Ongoing costs of $163,000 from the PUC Reimbursement Account (special), beginning in FY 2016-17, to the PUC to perform ongoing evaluation of operations, maintenance, and repair practices of gas pipeline facilities. SUPPORT : (Verified 5/27/14) Utility Workers Union of America (source) American Lung Association Asian Pacific Environmental Network Bay Area Air Quality Management District BlueGreen Alliance Breathe California California Environmental Justice Alliance California Interfaith Power & Light California Labor Federation California State Association of Electrical Workers/California Coalition of Utility Employees California Teamsters Public Affairs Council Communications Workers of America District 9 Engineers & Scientists of California, IFPTE Local 20 Environmental Defense Fund Environmental Justice Project, Catholic Charities, Diocese of Stockton Global Green USA Green California Los Angeles Alliance for a New Economy (LAANE) Los Angeles County Federation of Labor, AFL-CIO Natural Resources Defense Council Physicians for Social Responsibility-LA CONTINUED SB 1371 Page 5 SCOPE Los Angeles (Strategic Concepts in Organizing and Policy Education) Sierra Club California The Utilities Reform Network Union of Concerned Scientists United Food & Commercial Workers Western States Council United Steelworkers, District 12 JG:d 5/27/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED