BILL ANALYSIS Ó AB 1903 Page A 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. AB 1903 Page B 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 AB 1903 Page C 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 AB 1903 Page D 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 AB 1903 Page E 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 AB 1903 Page F 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 Page G 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. AB 1903 Page H 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 jointlyThe commission shall authorize a study of the long-term health impacts by the Office of Environmental Health AB 1903 Page I 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 naturalhasgas 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 until20322028 . (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.AB 1903 Page J (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 1,20332029 , and as of that date is repealed, unless a later enacted statute, that is enacted before January 1,20332029 , deletes or extends that date. REGISTERED SUPPORT / OPPOSITION: Support None on file AB 1903 Page K Opposition None on file Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083