BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 1903 Hearing Date: 6/13/2016
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|Author: |Wilk |
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|Version: |5/31/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Aliso Canyon gas leak: health impact study
DIGEST: This bill requires completion of a study of the
long-term effects on health caused by the prolonged leak at the
Aliso Canyon natural gas storage facility.
ANALYSIS:
Existing law:
1)Authorizes the California Public Utilities Commission (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. Authorizes the CPUC to fix rates, establish rules,
examine records, issue subpoenas, administer oaths, take
testimony, punish for contempt, and prescribe a uniform system
of accounts for all public utilities, including electrical and
gas corporations, subject to its jurisdiction. (Article 12 of
the California Constitution)
2)Requires that all charges demanded or received by any public
utility for any product, commodity or service be just and
reasonable, and that every unjust or unreasonable charge is
unlawful. (Public Utilities Code §451)
3)Prohibits a gas corporation from recovering any fine or
penalty in any rate approved by the CPUC. (Public Utilities
Code §959)
AB 1903 (Wilk) Page 2 of ?
This bill:
1)Directs the CPUC to authorize and the Office of Environmental
Health Hazard Assessment (OEHHA) to undertake a study of the
long-term health effect of the natural gas leak from the Aliso
Canyon natural gas storage facility that occurred in 2015.
2)Requires the study to include, at least, the following:
a) An investigation of the impact of the natural 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 State Oil and Gas Supervisor has determined
that the gas well safety review conducted pursuant to Order
1109, issued by the State Oil and Gas Supervisor on March
4, 2016, is complete.
b) An evaluation of the impact on residents due to exposure
to chemicals, including, but not limited to, methane,
benzene, and mercaptan.
3)Directs CPUC to transmit the study and 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 2028.
4)Directs the CPUC to order Southern California Gas Company
(SoCalGas) to pay for the study and to prohibit SoCalGas from
recovering any of the costs of the study in any rate approved
by the CPUC.
5)States that if the CPUC penalizes SoCalGas for its
responsibilities related to the natural gas leak at the Aliso
Canyon natural gas storage facility, the CPUC may include the
costs of the study.
6)Conditions the requirement that CPUC authorize the study upon
CPUC having recovered sufficient moneys to pay the costs of
the entire study and the Legislature having appropriated those
moneys for the study.
Background
Aliso Canyon Gas Storage Facility leak - a disaster. On October
AB 1903 (Wilk) Page 3 of ?
23, 2016, the SoCalGas discovered a leak from a well at the
company's Aliso Canyon Gas Storage Facility. The Division of
Oil, Gas and Geothermal Resources (DOGGR) - the state agency
responsible for regulating Aliso Canyon's natural gas storage
wells - reports that it was informed of the leak soon after its
discovery. Other state and local agencies, as well as nearby
residents threatened by the leak, were notified sometime later.
For more than 100 days, the well continued to dump tons of
methane gas into the atmosphere, along with irritants and other
substances. According to the California Air Resource Board
(ARB), the leak emitted almost 100,000 tons of methane, a potent
greenhouse gas (GHG), adding approximately 20 percent to
statewide methane emissions over its duration. Many resident
from nearby Porter Ranch suffered noxious odors. Others reported
more serious health effects, including nose bleeds, rashes and
respiratory problems. Hundreds were relocated from their homes.
Despite assurances from public health agencies, many fear the
leak's long term effects on health and wellbeing.
The investigation into the cause of the leak continues. The
Attorney General, ARB, the City of Los Angeles and the County of
Los Angeles have formally accused SoCalGas of violating
California laws. The CPUC, which regulates the rates of
SoCalGas, is considering penalties against the gas company.
Bill requires study of health effects of leak, limits cost
recovery. This bill directs CPUC to authorize and the OEHHA to
undertake a study of the long-term health effect of the natural
gas leak, provided CPUC has recovered sufficient moneys to pay
the costs of the entire study and the Legislature has
appropriated those moneys for the study. This direction to the
CPUC is appropriate, considering the gas was released by a
facility owned by SoCalGas, a public utility regulated by the
CPUC.
This bill also includes provisions concerning the ability of
SoCalGas to recover the cost of the study from ratepayers.
These provisions are inappropriate - the CPUC reports such a
requirement might be unlawful - because they seek to punish
SoCalGas without establishing wrongdoing. It may be the case
that the various investigations into the Aliso Canyon leak
reveal wrongdoing or negligence on the part of SoCalGas. And
the CPUC will likely punish any such wrongdoing and negligence
through fines and penalties against SoCalGas. Existing statute
AB 1903 (Wilk) Page 4 of ?
prohibits the gas company from recovering from ratepayers the
cost of such fines and penalties.
The cost of the study required by this bill, however, is not
punitive. The CPUC should retain the discretion to determine if
the cost of the study is just, reasonable and recoverable from
the gas company's ratepayers. Therefore, the author may wish to
amend the bill to delete the provision that prohibit SoCalGas
from recovering any of the costs of the study in any rate
approved by the CPUC, as follows:
SECTION 1.
Section 911.3 is added to the Public Utilities Code, to
read:
(a) If moneys are appropriated as specified in subdivision
(d), the commission shall authorize a study by the Office
of Environmental Health Hazard Assessment of the long-term
health impacts 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 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 State Oil and Gas Supervisor has determined
that the gas well safety review conducted pursuant to Order
1109, issued by the State Oil and Gas Supervisor on 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) 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
2028.
(c) (1) Consistent with its authority to bring enforcement
actions under this part, the commission shall order
Southern California Gas Company to pay for the study
described in subdivision (a).
(2) The commission shall prohibit Southern California Gas
AB 1903 (Wilk) Page 5 of ?
Company from recovering any of the costs ordered to be paid
pursuant to paragraph (1) in any rate approved by the
commission.
(3) (2) 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, the
commission may include the costs of the study described in
subdivision (a) in any penalty assessment.
(d) The commission shall authorize and the Office of
Environmental Health Hazard Assessment shall undertake the
study described in subdivision (a) only if the commission
has recovered sufficient moneys to pay the costs of the
entire study pursuant to subdivision (c) and the
Legislature has appropriated those moneys for the purpose
of this section.
(e) This section shall remain in effect only until January
1, 2029, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2029,
deletes or extends that date.
Double Referral. Should this bill be approved by the committee,
it will be re-referred to the Senate Committee on Environmental
Quality for its consideration.
Prior/Related Legislation
SB 380 (Pavley, Chapter 14, Statutes of 2016) placed a
moratorium on injecting natural gas into the Aliso Canyon gas
storage facility and establishes requirements for resuming
natural gas injections at the facility.
AB 2798 (Gatto, 2016) expands the types of information a person
proposing to build a thermal powerplant must provide to the CEC
to newly include 1) the sources of the fuels to be used and 2)
the extent to which the facility will increase or decrease
reliance on underground natural gas storage. The bill passed
the Assembly 78-0 and is under consideration by this committee.
SB 888 (Allen, 2015) establishes the California Office of
Emergency Services (Cal OES) as the lead agency for emergency
response to a large ongoing leak or release of natural gas and
associated gases from a natural gas storage facility that poses
a significant present or potential hazard to the public health
and safety, property, or to the environment. The bill passed
the Senate 28-10 and is pending referral in the Assembly.
AB 1903 (Wilk) Page 6 of ?
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
Common Sense Kids Action
Los Angeles Unified School District
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the author:
A study must be done to figure out whether there are long-term
health risks from the Aliso Canyon gas leak. Under existing law,
the CPUC has regulatory authority over public utilities,
including gas corporations. The Natural Gas Pipeline Safety Act
of 2011, within the Public Utilities Act, designates the CPUC as
the state authority responsible for regulating and enforcing
federal law with respect to intrastate gas pipeline
transportation and pipeline facilities. Existing law requires
the OEHHA to evaluate the environmental and health risks posed
by various substances.
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