BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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. 
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          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  

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             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.

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           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

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          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

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