Amended in Assembly August 3, 2016

Amended in Senate May 31, 2016

Amended in Senate April 25, 2016

Amended in Senate April 7, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1441

Introduced by Senators Leno and Pavley

February 19, 2016

An act to amend Section 977 of the Public Utilities Code, relating to natural gas.

LEGISLATIVE COUNSEL’S DIGEST

SB 1441, as amended, Leno. Natural gas: methane emissions.

Under existing law, the Public Utilities Commission, has regulatory authority over public utilities, including gas corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. begin insert Existing law requires the commission, in order to achieve transparency and accountability for rate revenues and best value for ratepayers, to consider, among other things, providing revenues for all activities identified and required by certain rules and procedures governing the operation, maintenance, repair, and replacement of commission-regulated gas pipeline facilities, including any adjustment of allowance for lost and unaccounted for gas related to actual leakage volumes. end insert

This bill begin delete would, in establishing rates for gas corporations, prohibit the commission end delete begin insert would prohibit the commission, in establishing rates for a gas corporation, end insert from allowing begin insert a end insert gas begin delete corporations end delete begin insert corporation end insert to seek or receive recovery from ratepayers for the value of natural gas lost to the atmosphere begin delete during the extraction, production, storage, processing, transportation, and delivery of the natural gas, as specified. end delete begin insert from certain natural gas facilities under the control of the gas corporation, as specified. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 977 of the Public Utilities Code is
amended to read:

977.  

begin insert (a) end insert begin insert   end insert In order to achieve transparency and accountability
for rate revenues and best value for ratepayers, and consistent with
the commission’s existing ratemaking procedures and authority
to establish just and reasonable rates, the commission shall consider
all of the following:

begin delete

(a)

end delete

begin insert ( end insert begin insert 1) end insert  Providing an adequate workforce to achieve the objectives
of reducing hazards and emissions from leaks, including leak
avoidance, reduction, and repair.

begin delete

(b) (1)

end delete

begin insert (2) end insert  Providing revenues for all activities identified and required
pursuant to Section 975, including any adjustment of allowance
for lost and unaccounted for gas related to actual leakage volumes.

begin delete

(2) In establishing rates for gas corporations, to the extent
feasible as determined by the commission in an individual
rulemaking proceeding or in general rate cases, the commission
shall not allow gas corporations to seek or receive recovery from
ratepayers for the value of natural gas lost to the atmosphere during
the extraction, production, storage, processing, transportation, and
delivery of the natural gas.

end delete begin delete

(c)

end delete

begin insert (3) end insert  Providing guidance for treatment of expenditures as being
either an item of expense or a capital investment.

begin delete

(d)

end delete

begin insert (4) end insert  The impact on affordability of gas service for vulnerable
customers as a result of the incremental costs of compliance with
the adopted rules and procedures.

begin insert

(b) (1) To the extent feasible as determined by the commission,
when establishing rates for a gas corporation in an individual
rulemaking proceeding or in a general rate case, the commission
shall not allow the gas corporation to seek or receive recovery
from ratepayers for the value of natural gas lost to the atmosphere
from any of the following natural gas facilities under the control
of the gas corporation:

end insert begin insert

(A) Commission-regulated gas pipeline facilities as defined in
Section 975.

end insert begin insert

(B) Above-ground storage facilities.

end insert begin insert

(C) Underground storage facilities.

end insert begin insert

(D) Processing facilities.

end insert begin insert

(E) Facilities used for the transportation of natural gas.

end insert begin insert

(F) Facilities used for the delivery of natural gas.

end insert begin insert

(2) Paragraph (1) does not apply to natural gas lost to the
atmosphere resulting from an act of God.

end insert