BILL NUMBER: AB 56	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Hill

                        DECEMBER 6, 2010

   An act to add Sections 726 and 770.5 to the Public Utilities Code,
relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 56, as introduced, Hill. Public utilities: fines and penalties:
intrastate pipeline safety.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities. 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.
   This bill would prohibit a public utility from recovering any fine
or penalty in any rate approved by the commission.
   The Public Utilities Act authorizes the commission to ascertain
and fix just and reasonable standards, classifications, regulations,
practices, measurements, or service to be furnished, imposed,
observed, and followed by specified public utilities, including gas
corporations, as defined.
   Existing federal law requires the United States Department of
Transportation Pipeline and Hazardous Materials Safety Administration
(PHMSA) to adopt minimum safety standards for pipeline
transportation and for pipeline facilities, including an interstate
gas pipeline facility and intrastate gas pipeline facility, as
defined. Existing law authorizes the Secretary of Transportation to
prescribe or enforce safety standards and practices for an intrastate
pipeline facility or intrastate pipeline transportation to the
extent that the safety standards and practices are regulated by a
state authority that submits to the secretary annually a
certification for the facilities and transportation or alternatively
authorizes the secretary to make an agreement with a state authority
authorizing it to take necessary action to meet certain pipeline
safety requirements. Existing law prohibits a state authority from
adopting or continuing in force safety standards for interstate
pipeline facilities or interstate pipeline transportation. Existing
law authorizes a state authority that has submitted a current
certification to adopt additional or more stringent safety standards
for intrastate pipeline facilities and intrastate pipeline
transportation only if those standards are compatible with the
minimum standards prescribed by PHMSA.
   This bill would designate the commission as the state authority
responsible for development, submission, and administration of a
state pipeline safety program certification for natural gas
pipelines. The bill would require the commission to adopt and enforce
compatible safety standards, as defined, for commission-regulated
gas pipeline facilities, as defined, to accomplish specified results.
The bill would require the commission to track proposed repairs for
which a gas corporation requested compensation in any rate request
that was granted by the commission in order to determine if the
repairs are made and to require any gas corporation that fails to
make repairs for which the commission granted recovery in rates to
promptly make a public filing as to the justification for failing to
make the approved repairs. The bill would prohibit a gas corporation
from recovering in rates any uninsured expense resulting from a fire,
explosion, or other catastrophic event involving a
commission-regulated gas pipeline facility that resulted from
negligence by the utility.
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
   Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 726 is added to the Public Utilities Code, to
read:
   726.  A public utility shall not recover any fine or penalty in
any rate approved by the commission.
  SEC. 2.  Section 770.5 is added to the Public Utilities Code, to
read:
   770.5.  (a) For purposes of this section the following terms have
the following meanings:
   (1) "Commission-regulated gas pipeline facility" means an
intrastate gas pipeline facility, as defined in Section 60101 of
Title 49 of the United States Code, that transports natural gas and
is subject to the regulatory authority of the commission, including a
pipeline that the commission, pursuant to subsection (c) of Section
717 of Title 15 of the United States Code, has certified to the
Federal Energy Regulatory Commission as being subject to the
regulatory jurisdiction of the commission over rates and service.
"Commission-regulated gas pipeline facility" does not include those
pipelines that are excluded from regulation by the Federal Energy
Regulatory Commission pursuant to subsection (b) of Section 717 of
Title 15 of the United States Code because they are facilities used
for the distribution of natural gas.
   (2) "Compatible safety standards" means additional or more
stringent safety standards for commission-regulated gas pipeline
facilities that are compatible with the minimum safety standards
adopted by the Department of Transportation pursuant to Chapter 601
(commencing with Section 60101) of Subtitle VIII of Title 49 of the
United States Code and which the commission is authorized to adopt
pursuant to subsection (c) of Section 60104 of that chapter.
   (b) The commission shall be the state authority responsible for
the development, submission, and administration of a state pipeline
safety program certification for natural gas pipelines pursuant to
Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title
49 of the United States Code.
   (c) The commission shall adopt and enforce compatible safety
standards for commission-regulated gas pipeline facilities to
accomplish all of the following:
   (1) Require the owner or operator to make an annual performance
measure report to the commission concerning all commission-regulated
gas pipeline facilities. The performance measure report shall include
the total number of anomalies identified as a result of safety
assessments, the total number of conditions repaired, and the actual
anomalies identified by the pipeline owner or operator during the
inspections and the conditions requiring repair. The annual
performance measure reports shall be made publicly available to the
extent that doing so does not create a public safety risk. The
commission shall consult with the federal Department of Homeland
Security in determining what information may be made available
without creating a public safety risk.
   (2) Require the owner or operator to evaluate the integrity of all
commission-regulated gas pipeline facilities outside high
consequence areas and to include this evaluation as part of their
safety assessment reports.
   (3) Require the owner or operator of commission-regulated gas
pipeline facilities to develop and to implement, by January 1, 2012,
a continuing public education program pursuant to Section 60116 of
Title 49 of the United States Code. The owner or operator, to the
extent that doing so does not create a public safety risk, shall
provide detailed, customized information on pipeline locations and
emergency response plans, as well as enhanced annual emergency
response training.
   (4) Require the owner or operator of commission-regulated gas
pipeline facilities to provide information regarding the pipeline
system to state and local emergency responders, including the
business name, address, and emergency contact information of whom to
contact if an event occurs, accurate maps of facility locations, the
owner or operator's emergency response, plan and any other
information the commission determines should be supplied to state and
local emergency responders.
   (5) Require the owner or operator of commission-regulated gas
pipeline facilities to conduct outreach and public education relative
to excavation dangers and the availability of the one-call
notification program in order to reduce dangerous incidences caused
by third-party excavations.
   (6) Require the owner or operator of commission-regulated gas
pipeline facilities to prioritize those facilities that, because of
their proximity to seismic active areas, should be subject to the
highest level of safety oversight.
   (7) Require the owner or operator of commission-regulated gas
pipeline facilities to comply with minimum standards established by
the commission, in consultation with the independent review panel
investigating the San Bruno natural gas pipeline explosion of 2010,
to install automatic or remote shutoff valves, unless technically
unfeasible, according to the following timelines:
   (A) On all new commission-regulated gas pipeline facilities or any
facility being replaced beginning January 1, 2012.
   (B) On all facilities within 10 miles of a high-risk seismic fault
by January 1, 2014.
   (C) On all facilities within 10 miles of a Class 3 or Class 4 high
consequence area by January 1, 2017.
   (8) Require the owner or operator of commission-regulated gas
pipeline facilities to operate those facilities at safe pressure if
the facility cannot be inspected using the most effective inspection
technology.
   (9) Require owners and operators of commission-regulated gas
pipeline facilities to complete, by January 1, 2022, a modernization
program to upgrade key facilities located in heavily populated and
other critical areas. The commission shall consult with owners and
operators and interested stakeholders in developing the program
requirements and schedule. The program shall contain criteria for
prioritizing critical gas pipeline facilities and ensure that all
upgraded facilities can accommodate state of the art inspections,
including internal corrosion inspection methods.
   (d) The commission shall adopt and enforce a one-call notification
program for the state consistent with the requirements adopted by
the Department of Transportation pursuant to Chapter 601 (commencing
with Section 60101) of Subtitle VIII of Title 49 of the United States
Code.
   (e) The commission shall track proposed repairs for which a gas
corporation requested compensation in any rate request that was
granted by the commission in order to determine if the repairs are
made. The commission shall require any gas corporation that fails to
make repairs for which the commission granted recovery in rates to
promptly make a public filing as to the justification for failing to
make the approved repairs.
   (f) A gas corporation shall not recover in rates any uninsured
expense resulting from a fire, explosion, or other catastrophic event
involving a commission-regulated gas pipeline facility that resulted
from negligence by the utility.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.