BILL NUMBER: AB 1456	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 21, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  APRIL 17, 2012

INTRODUCED BY   Assembly Member Hill

                        JANUARY 9, 2012

   An act to add Section  960   970  to the
Public Utilities Code, relating to gas corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1456, as amended, Hill. Gas corporations: safety performance
 standards:  metrics:  rate incentive
program.
   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. Existing law, the Natural Gas
Pipeline Safety Act of 2011, among other things, prohibits a gas
corporation from recovering any fine or penalty in any rate approved
by the commission.
   This bill would require the commission to perform an analysis of
benchmark data and adopt safety performance  standards
  metrics  for pipeline safety  and
reliability   that consider specified principles  .
The bill would require the commission to evaluate a gas corporation'
s safety performance  based on   using 
those  standards   met  rics  and
would authorize the commission to implement a rate incentive program
that could contain penalties based on safety performance.
   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.  The Legislature finds and declares all of the
following:
   (a) On September 9, 2010, a 30-inch natural gas transmission
pipeline ruptured in San Bruno, California, killing eight people,
hospitalizing more than 50 people, and destroying 38 homes.
   (b) On September 23, 2010, the Public Utilities Commission created
an independent review panel of experts to investigate both the
practices of the pipeline operator and of the commission to ensure
that such an accident would not be repeated elsewhere in the state.
   (c) On June 9, 2011, the panel presented its findings and found
that the financial focus of the pipeline operator's management had
been detrimental to system safety.
   (d) The panel suggested that, upon thorough analysis of benchmark
data, rate incentives and penalties be applied to gas corporations
based on the achievement of specified levels of performance.
  SEC. 2.  Section  960   970  is added to
the Public Utilities Code, to read:
    960.   970.   (a) The commission shall
perform an analysis of benchmark data and adopt safety performance
 standards   metrics  for pipeline safety
 and reliability  . 
   (b) The commission shall consider the following principles when
adopting safety performance metrics:  
   (1) Each safety performance metric shall be designed to be an
indicator of safety performance.  
   (2) Each safety performance metric shall be designed so that it
may be reevaluated within a useful timeframe.  
   (3) Each safety performance metric shall be designed so that the
data inputs to the metric are verifiable.  
   (4) The adopted set of safety performance metrics shall be robust
enough to serve as a useful indicator of pipeline safety. 

   (b) 
    (c)  The commission shall evaluate a gas corporation's
safety performance  based on   using  the
safety performance  standards   metrics 
adopted pursuant to subdivision (a) and may implement a rate
incentive program. The rate incentive program may contain penalties
based on safety performance.