BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                    AB 1903


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          Date of Hearing:  March 30, 2016


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                  Mike Gatto, Chair


          AB 1903  
          (Wilk) - As Introduced February 11, 2016


          SUBJECT:  Aliso Canyon gas leak:  health impact study


          SUMMARY:  Requires the California Public Utilities Commission  
          (CPUC) and Department of Public Health to prepare and publish  
          biennial studies on long term health impacts related to the gas  
          leak at the Aliso Canyon Gas Storage Facility.  Specifically,  
          this bill:  


          1)Requires biennial studies on long term health impacts related  
            to the gas leak at the Aliso Canyon Gas Storage Facility for  
            those persons who resided within a 12-mile radius of the Aliso  
            Canyon Natural Gas Storage Facility during a specified time  
            period.


          2)Requires the study to include an evaluation of the impact on  
            residents due to exposure to chemicals, including, but not  
            limited to, methane, benzene, and mercaptan.


          3)Requires the study to be published biennially beginning  
            January 1, 2018, through 2032.













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          4)Specifies the intent of the Legislature to pay for the cost of  
            these studies from any monies collected from penalties  
            assessed against the Southern California Gas Company  
            (SoCalGas).


          5)Sunsets the statute on January 1, 2033.


          EXISTING LAW:  


          1)Authorizes the CPUC to regulate private corporations that own,  
            operate, control, or manage a line, plant, or system for the  
            transportation or the production, generation, transmission, or  
            furnishing of heat, power, or storage directly or indirectly  
            to or for the public. (California Constitution, Article XII,  
            Section 3)
          2)Authorizes the CPUC to regulate gas corporations, including  
            underground storage. (Public Utilities Code Sections 216(a),  
            221, 222, 227, and 228)


          3)Authorizes the CPUC to require that utility charges are just  
            and reasonable and requires utilities to maintain facilities  
            as necessary to promote safety, health, comfort, and  
            convenience of patrons, employees, and the public. (Public  
            Utilities Code Section 451)


          4)Authorizes the CPUC to do all things, whether specifically  
            designated in this part or in addition thereto, which are  
            necessary and convenient in the exercise of such power and  
            jurisdiction. (Public Utilities Code Section 701)


          5)Establishes that the CPUC is responsible for regulating and  
            enforcing intrastate gas pipeline transportation and pipeline  
            facilities pursuant to Chapter 601 (commencing with Section  











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            60101) of Subtitle VIII of Title 49 of the United States Code,  
            including the development, submission, and administration of a  
            state pipeline safety program certification for natural gas  
            pipelines pursuant to Section 60105 of that chapter. (Public  
            Utilities Code Section 955(b))


          6)Requires gas storage facilities to receive a Certificate of  
            Public Convenience and Necessity (CPCN) before constructing a  
            gas storage facility.  Requires that the CPUC grant a CPCN on  
            the grounds that the present or future public convenience and  
            necessity requires or will require the gas storage facility.  
            (Public Utilities Code Section 1001, et seq.)


          7)Authorizes the CPUC to investigate, as part of the rate  
            proceeding for any gas corporation, impediments to the  
            in-state production and storage of natural gas and encourage  
            in-state production or storage of natural gas unless the CPUC  
            finds it likely that it will result in consequences adverse to  
            the interests of gas customers. (Public Utilities Code Section  
            1001, et seq.)



          1)Directs the Department of Conservation, Division of Oil, Gas  
            and Geothermal Resources (DOGGR) to:





             b)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells and the operation, maintenance, and  
               removal or abandonment of tanks and facilities attendant to  
               oil and gas production so as to prevent, as far as  
               possible, damage to life, health, property, and natural  
               resources; damage to underground oil and gas deposits from  
               infiltrating water and other causes; loss of oil, gas, or  











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               reservoir energy, and damage to underground and surface  
               waters suitable for irrigation or domestic purposes by the  
               infiltration of, or the addition of, detrimental  
               substances.





             c)   Supervise the drilling, operation, maintenance, and  
               abandonment of wells so as to permit the owners or  
               operators of the wells to utilize all methods and practices  
               known to the oil industry for the purpose of increasing the  
               ultimate recovery of underground hydrocarbons and which, in  
               the opinion of the supervisor, are suitable for this  
               purpose in each proposed case. 





             d)   Encourage the wise development of oil and gas resources  
               to best meet oil and gas needs in this state.  (Public  
               Resources Code Section 3106)


          1)Requires the Department of Conservation to maintain  
            surveillance over underground gas storage facilities to insure  
            that the original reserves are not lost, that drilling of new  
            wells is conducted properly, and that no damage occurs to the  
            environment by reason of injection and withdrawal of gas.  
            (Public Resources Code Section 3403.5)  
           FISCAL EFFECT:  Unknown.


          COMMENTS:  


          1)Author's Statement: "Residents of Porter Ranch have many  











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            questions as it relates to the Aliso Canyon facility gas leak.  
            One question in particular was: What are the long-term health  
            impacts?
            "In order to address the question, Assembly Bill 1903 would  
            require the [CPUC] and Department of Public Health to study  
            the long-term health impacts of the Aliso Canyon gas storage  
            facility gas leak."


          2)Background:  A leak was discovered on October 23, 2015, at a  
            natural gas well located at the Aliso Canyon storage facility,  
            owned and operated by SoCalGas.  SoCalGas made several  
            unsuccessful well "kill" attempts. On December 4, 2015,  
            SoCalGas began drilling a relief well to intercept and cap the  
            leaking well near the bottom of the well. Through November and  
            December 2015 DOGGR and the CPUC issued orders to establish a  
            moratorium on natural gas injection at Aliso Canyon, provide  
            data, retain evidence, and track costs of the effort to plug  
            the well.  The Air Resources Board began collecting and  
            publishing data on methane emissions caused by the leak.
            On January 6, 2016, the Governor issued a Proclamation<1>  
            directing various state entities to oversee SoCalGas' actions  
            to stop the leak, protect public safety, ensure accountability  
            and strengthen oversight of natural gas storage facilities.   
            Relevant to this bill, portions of the Governor's  
            Proclamation:


             a)   Ordered DOGGR to continue its prohibition against  
               SoCalGas injecting any gas into the Aliso Canyon Storage  
               Facility until a comprehensive review of the safety of the  
               storage wells and the air quality of the surrounding  
               community utilizing independent experts is completed; and
             b)   Tasked the California Energy Commission in coordination  
               with CPUC to maintain energy reliability during this  
               incident.





             --------------------------
          <1>  https://www.gov.ca.gov/news.php?id=19264  










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            On February 11, 2016, SoCalGas announced it had temporarily  
            controlled the flow of natural gas at the leaking well and  
            will continue to work in coordination with DOGGR and other  
            agencies during the process of permanently sealing the well.


          3)Exposure Period for the Study:  The current version of this  
            bill establishes a study group to include persons who resided  
            within a 12-mile radius between October 23, 2015, and an  
            unspecified date.  The leaking well was permanently sealed on  
            February 12, 2016.  DOGGR has ordered SoCalGas to conduct a  
            safety review of the wells at Aliso Canyon.
            Following the sealing of the leaking well, the Los Angeles  
            County Department of Public Health reported<2> that while a  
            reduction in the number of odor reports from residents was  
            observed, "the measured levels of methane have occasionally  
            been elevated above what would be expected in the area,  
            suggesting there could be other local sources of natural gas  
            being released.  This could explain the occurrence of  
            intermittent odors and recurring symptoms experienced by some  
            residents upon returning to their homes.  Further study is  
            required to understand this phenomenon."


            The Los Angeles Department of Public Health also reports that  
            while many of the temporarily relocated residents have  
            re-occupied their homes without incident, some residents are  
            reporting symptoms, including headache; stomach upset;  
            dizziness; and eye, nose, and skin irritation, sometimes in  
            the absence of odors after the well was sealed.


             The author may wish to consider an amendment to include  
            persons who resided within the 12-mile radius for the period  
            of October 23, 2015, and the date when DOGGR determines the  
            safety review is complete.





            --------------------------
          <2> http://file.lacounty.gov/bc/q1_2016/cms1_240709.pdf  










                                                                    AB 1903


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           4)Public Health Experts involved with Aliso Canyon Health  
            Assessment:  The Office of Environmental Health Hazard  
            Assessment (OEHHA) has been tasked by the Governor's Office to  
            convene an independent panel of scientific and medical experts  
            to review public health concerns stemming from the gas leak  
            and evaluate whether additional measures are needed to protect  
            public health beyond those already put in place.  The panel of  
            experts has been formed.  It is comprised of eight recognized  
            experts from six universities within the University of  
            California system.  The panel includes experts in medicine,  
            toxicology, epidemiology and exposure sciences.
             The author may wish to consider an amendment to instead direct  
            OEHHA to prepare the biennial studies  .


          5)Penalties pay for the studies:  The current version of the  
            bill declares legislative intent to have the CPUC order  
            SoCalGas to pay for the studies from penalties assessed  
            against SoCalGas.  The CPUC has not yet completed its  
            investigation of the cause of the leak nor has it opened a  
            proceeding on the subject.  It can take many years before a  
            proceeding reaches a conclusion.  As a result, the outcome of  
            the proceeding and whether or not there will be penalties, or  
            how much those penalties will be, can only be speculated at  
            this point.
             In order to ensure that the studies are funded, regardless of  
            the outcome of a future proceeding, the author may wish to  
            consider an amendment to direct the CPUC to require SoCalGas  
            to fund the studies and that the funding not be paid by  
            ratepayers


           6)Sunset date:  This bill currently sunsets the study in 2032.   
            The author may wish to consider an amendment to sunset the  
            study in 2028, which would allow for a 10-year study period  
            and five reports.  If the studies indicate a need for ongoing  
            studies, this sunset can be extended at a later date.













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           7)Double referred:   This bill is double referred to the  
            Assembly Health Committee.
          8)Suggested amendments:  The author may wish to consider the  
            following amendments:


             a)   Replace the Department of Public Health and instead task  
               the OEHHA with the requirement to perform the studies.


             b)   Specify the persons to be studied to be those residents  
               who were within a 12-mile radius for the period between  
               October 23, 2015, and the date when DOGGR determines the  
               well safety review is complete.


             c)   Require the CPUC to order SoCalGas to fund the studies  
               and specify that the CPUC cannot approve a request by  
               SoCalGas to collect monies for these studies from  
               ratepayers.


             d)   Reduce the period of the study to 10 years and reduce  
               the sunset of the statute accordingly.








            Section 911.3 is added to the Public Utilities Code, to read:



            911.3.  (a) The commission and the State Department of Public  
            Health jointly   The commission shall authorize a  study  of  the  
            long-term health impacts  by the Office of Environmental Health  











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            Hazard Assessment  of the significant natural gas leak from the  
            Aliso Canyon natural gas storage facility located in the  
            County of Los Angeles that started approximately October 23,  
            2015. The study shall include, but is not limited to, both of  
            the following:
            (1) An investigation of the impact of the natural  has   gas  leak  
            on the health of persons who resided within a 12-mile radius  
            of the Aliso Canyon natural gas storage facility in the County  
            of Los Angeles between October 23, 2015, and  the date   when the  
            Department of Conservation Supervisor of the Division of Oil  
            Gas and Geothermal Resources has determined that its gas well  
            safety review pursuant to Order 1109, issued March 4, 2016, is  
            complete.  


            (2) An evaluation of the impact on residents due to exposure  
            to chemicals, including, but not limited to, methane, benzene,  
            and mercaptan.


            (b) (1) The commission  shall publish and transmit the  report  
            by the  Office of Environmental Health Hazard Assessment and  
             its ongoing findings to  the appropriate policy committees of  
            the  Legislature on a biennial basis, on or before January 1 of  
            every even-numbered year, from 2018 until  2032  2028  .


            (2) The report shall be submitted in compliance with Section  
            9795 of the Government Code.


            (c)  It is the intent of the Legislature that the study  
            conducted pursuant to subdivision (a) should be paid for out  
            of moneys collected from any penalties assessed against  
            Southern California Gas Company pursuant to this part in  
            regards to the natural gas leak at the Aliso Canyon natural  
            gas storage facility located in the County of Los Angeles.  













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             (1) The commission shall order Southern California Gas Company  
            to pay for studies conducted pursuant to subdivision (a).


            (2) The commission shall not allow Southern California Gas  
            Company to recover the cost of these studies conducted  
            pursuant to subdivision (a) in any rate approved by the  
            commission.


            (3) If the commission penalizes Southern California Gas  
            Company for its responsibilities related to the natural gas  
            leak at the Aliso Canyon Natural Gas Storage Facility it may  
            include the costs of these studies conducted pursuant to  
            subdivision (a) in any penalty assessment.


             (d) This section shall remain in effect only until January 1,  
             2033   2029  , and as of that date is repealed, unless a later  
            enacted statute, that is enacted before January 1,  2033   2029  ,  
            deletes or extends that date.








          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file












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          Opposition


          None on file




          Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083