BILL ANALYSIS �
AB 56
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 56 (Hill)
As Amended September 7, 2011
Majority vote
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|ASSEMBLY: |54-21|(June 2, 2011) |SENATE: |35-1 |(September 8, |
| | | | | |2011) |
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Original Committee Reference: U. & C.
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SUMMARY : Implements numerous safety-related measures regarding
the operation of natural gas pipeline facilities regulated by
the California Public Utilities Commission (PUC). Specifically,
this bill:
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Require owners and operators of intrastate transmission and
distribution lines, at least once each calendar year, shall
meet with each local fire department having fire suppression
responsibilities in the area where those lines are located to
discuss and review contingency plans for emergencies.
2)Authorize the PUC to require the installation of automatic
shutoff or remote controlled sectionalized block valves on
specified facilities, if it determines those valves are
necessary for the protection of the public.
3)Require the PUC to establish action timelines, adopt standards
for how to prioritize installation of automatic shutoff or
remote controlled sectionalized block valves pursuant to
ensure that remote and automatic shutoff valves are installed
as quickly as is reasonably possible, and establish ongoing
procedures for monitoring progress.
4)Require each gas corporation to prepare and submit to the
commission a proposed comprehensive pressure testing
implementation plan and implementation timeline for all
intrastate transmission lines to either pressure test those
lines or to replace all segments of intrastate transmission
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lines that were not pressure tested or that lack sufficient
details related to performance of pressure testing. At the
completion of the implementation period, all California
natural gas intrastate transmission line segments shall meet
all shall, where warranted, be capable of accommodating
in-line inspection devices.
5)Require a gas corporation to file reports semiannually, or at
intervals determined with PUC, with PUC a gas transmission and
storage safety report.
6)Require each gas corporation to demonstrate to the
satisfaction of the commission, in its general rate case, that
its proposed rates cases that the requested revenue
requirements will be sufficient to enable the gas corporation
to fund those projects and activities necessary to maintain
safe and reliable service and to meet federal and state safety
requirements applicable to its gas plant, in a cost-effective
manner.
7)State that if PUC authorizes a gas corporation to recover
expenses incurred for public safety, the bill requires PUC to
require the gas corporation to establish and maintain a
balancing account to record the difference between the
approved revenue requirements for public safety and the actual
expenditures made by the utility.
8)Require a gas corporation to return moneys approved for
expenditure for public safety by PUC to the balancing account,
if those funds are not expended within a reasonable period of
time after PUC grants approval of the public safety
expenditure, as determined by PUC.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version passed by the Senate.
FISCAL EFFECT : According to Assembly Appropriations Committee,
ongoing costs of about $900,000 ($630,000 Public Utilities
Reimbursement Account and $270,000 federal funds) for six
utility engineer positions and associated travel-related and
training costs. (PUC indicates it would need two positions to
increase the number of annual gas-related safety audits to
ensure the new safety standards and procedures established are
properly addressed and enforced. An additional four positions
would be needed-two to enforce the One-call Notification Program
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and two to track proposed safety-, reliability-, and
integrity-related projects for which the gas utilities seek
compensation.)
COMMENTS : On September 9, 2010, in San Bruno, California, an
explosion in a natural gas transmission pipeline owned by PG&E
killed eight people, injured numerous people, and destroyed 37
homes. The cause of the explosion is unknown. PUC is working
closely with the National Transportation Safety Board (NTSB) to
investigate the cause of the San Bruno explosion.
According to the author, this bill is intended to ensure that
California develops new regulations and standards for the safe
and reliable operation of natural gas pipelines in the state.
Since the accident occurred, PUC has:
1)Established a San Bruno Fire Independent Review panel of
experts to study and investigate the San Bruno explosion and
make recommendations to PUC on how best to prevent similar
accidents.
2)Opened a proceeding to set new rules for the safe and reliable
operation of natural gas pipelines in California, provide the
public with the Independent Review Panel's expert
recommendations, develop and adopt safety related changes to
PUC's regulation of natural gas transmission pipelines,
including requirements for construction, shut-off values,
maintenance, inspections, operation, record retention,
ratemaking, and the application of penalties, and perform
other elements included in this bill.
3)Required PG&E to provide semi-annual Gas Transmission and
Storage Safety Reports to PUC to track PG&E's gas transmission
and storage capital expenditure projects; operations and
maintenance activities, and compliance with federal pipeline
requirements.
4)Issued a proposed decision requiring all California natural
gas transmission operators to develop and file Natural Gas
Transmission Pipeline Comprehensive Pressure Testing
Implementation Plans to achieve orderly and cost effectively
replacing or testing all natural gas transmission pipelines
that have not been pressure tested. The Proposed Decision
issued provides guidance on determining the maximum allowable
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operating pressure to pipeline operators in the state and
begins the process of evaluating older pipelines that have
been previously exempt from pressure testing requirements.
The first opportunity PUC's Commissioners have to vote on this
proposal is June 9, 2011.
Analysis Prepared by : Sue Kateley / U. & C. / (916) 319-2083
FN: 0002864