BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 705|
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UNFINISHED BUSINESS
Bill No: SB 705
Author: Leno (D)
Amended: 09/01/11
Vote: 21
SENATE ENERGY, UTILITIES & COMM. COMMITTEE : 9-0, 04/28/11
AYES: Padilla, Fuller, Corbett, De Le�n, DeSaulnier,
Pavley, Rubio, Simitian, Wright
NO VOTE RECORDED: Berryhill, Strickland
SENATE APPROPRIATIONS COMMITTEE : 6-2, 05/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SENATE FLOOR : 30-7, 06/01/11
AYES: Alquist, Berryhill, Blakeslee, Calderon, Corbett,
Correa, De Le�n, DeSaulnier, Emmerson, Evans, Fuller,
Hancock, Harman, Hernandez, Kehoe, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Simitian, Steinberg, Vargas, Wolk, Wright, Yee
NOES: Anderson, Dutton, Gaines, La Malfa, Runner, Walters,
Wyland
NO VOTE RECORDED: Cannella, Huff, Strickland
ASSEMBLY FLOOR : Not available
SUBJECT : Natural gas: service and safety
SOURCE : The Utility Reform Network
Utility Workers Union of America
CONTINUED
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DIGEST : This bill requires natural gas utilities
regulated by the California Public Utilities Commission
(PUC) to develop service and safety plans.
Assembly Amendments (1) specify that the term "gas
corporation workforce" includes the employees of a gas
corporation and the employees of an independent contractor
while working under contract with the gas corporation; (2)
require the PUC to take all reasonable and appropriate
actions to carry out the safety priority policy, as
specified; (3) determine that "intrastate distribution
line," "intrastate gathering line," and "intrastate
transmission line" includes all facilities used in the
receipt, transport, and delivery of gas to an end-use
customer, including, but not limited to, pipelines,
compressor stations, pressure regulating devices, valves,
services, meters, and equipment or devices used in the
operation and maintenance of those facilities other than a
proprietary nondedicated gas gathering line regulated by
either the Division of Oil, Gas, and Geothermal Resources
in the Department of Conservation or the Pipeline and
Hazardous Materials Safety Administration of the United
States Department of Transportation; (4) require the plan,
discussed above, to set forth the manner in which the gas
corporation will implement this policy and achieve
specified objectives; (5) require the PUC to accept,
modify, or reject the plan for each gas corporation by
December 31, 2012, and to build into an approved plan
sufficient flexibility to redirect activities to respond to
safety requirements; and (6) designate the PUC as the state
authority over gas corporations, but not over local public
agencies; and (7) make other clarifying and technical
changes.
ANALYSIS : Existing law:
State (PUC and the Office of the State Fire Marshal) and
federal (U.S. Department of Transportation) regulators are
tasked with ensuring that pipeline and hazardous materials
operators have risk management programs in place, that
those programs are designed in conformance with state and
federal laws, that the programs are effective in achieving
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safety for the public and the employees of the operator,
and that the entire system of achieving safety continues to
improve itself.
PUC enforces statutes and rules (General Order 112-E) which
establish, in addition to the Federal Pipeline Safety
Regulations, minimum requirements for the design,
construction, quality of materials, locations, testing,
operations and maintenance of facilities used in the
gathering, transmission and distribution of gas and in
liquefied natural gas facilities to safeguard life or limb,
health, property and public welfare and to provide that
adequate service will be maintained by gas utilities
operating under the jurisdiction of the commission.
PUC conducts compliance inspections, accident
investigations, reviews utilities' reports and records,
conducts construction inspections, conducts special
studies, and takes action in response to complaints and
inquiries from the public on issues regarding gas pipeline
and electric safety. PUC also conducts audits and
inspections of gas facilities owned and operated by mobile
home parks, and audits and inspections of underground
propane gas distributions systems.
PUC has responsibility to ensure compliance with federal
pipeline management standards for over 11,000 miles of
transmission pipeline and almost 2,350 miles of
transmission pipeline in high consequence areas.
The Office of the State Fire Marshal (SFM) regulates the
safety of approximately 5,500 miles of intrastate hazardous
liquid transportation pipelines and acts as an agent of the
federal Office of Pipeline Safety concerning the inspection
of more than 2,000 miles of interstate pipelines. Pipeline
Safety staff inspect, test, and investigate to ensure
compliance with all federal and state pipeline safety laws
and regulations. All spills, ruptures, fires, or similar
incidents are responded to immediately; all such accidents
are investigated for cause. Hazardous liquid pipelines are
also periodically tested for integrity using procedures
approved by SFM. The program has been certified by the
federal government since 1981. SFM also maintains
Geographic Information Systems-based maps of all regulated
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pipelines and has been named as a state repository for
pipeline data by the National Pipeline Mapping System.
This bill:
1.Establishes PUC as the state authority responsible for
regulating and enforcing gas pipeline transportation and
pipeline facilities, including development and
administration of a state pipeline safety program.
2.Establishes the State Fire Marshal as the exclusive
safety regulatory and enforcement authority over
intrastate hazardous liquid pipelines.
3.Requires Pacific Gas and Electric and Sempra (San Diego
Gas and Electric and Southern California Gas) to develop
and implement service and safety plans.
4.Specifies minimum requirements of the service and safety
plans in order to protect the public and gas corporation
employees:
Identify and minimize hazards and risks;
Identify safety systems to eliminate or minimize
hazards, including documentation;
Provide adequate storage and transportation
capacity;
Provide patrol and inspection;
Provide systems controls with respect to both
equipment and personnel procedures;
Provide timely response to reported leaks or other
hazard conditions;
Provide protocols for determining maximum allowable
operating pressure on relevant pipeline segments,
including documentation;
Specifies that the term 'gas corporation workforce'
includes the employees of a gas corporation and the
employees of independent contractor while working
under contract with the gas corporation
Preparation to minimize damage and respond to
earthquakes and other major events;
Meet or exceed minimum standards for safe design,
construction, installation, and maintenance of gas
transmission and distribution facilities;
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Ensure adequate number of trained workforce to
implement the service and safety plan; and,
Additional matters PUC determines should be
included.
1.Provides that meaningful participation by employees in
development and implementation of safety plans.
2.Requires PUC to review and accept, modify, or reject the
service and safety plans by December 31, 2012, require
periodic updates to the plans, and provide additional
reviews at regular intervals.
3.Reorganizes existing statute governing natural gas
service.
4.Allows just and reasonable cost recovery in rates.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, the PUC
will incur additional costs to review the safety plans and
to facilitate ongoing input from employees in the
development and implementation of the plans. Given the
brief timeframe to act on the initial plans and the ongoing
nature of these tasks, the commission will require three
engineer positions for the first year at a cost of
$350,000, and two positions annually thereafter at a cost
of about $240,000. (Public Utilities Reimbursement Account)
SUPPORT : (Verified 9/8/11)
The Utility Reform Network (co-source)
Utility Workers Union of America (co-source)
California Labor Federation
California Public Utilities Commission
Coalition of California Utility Employees
Consumer Federation of California
International Brotherhood of Electrical Workers
San Diego and Imperial Counties Labor Council
San Diego Gas & Electric Company
Sempra Energy
Southern California Gas Company
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ARGUMENTS IN SUPPORT : According to the author's office,
"After the explosion at San Bruno and the ongoing episodes
of gas explosions around the country it is now generally
recognized that system safety has been a lower priority in
operating and maintaining the system for transporting,
delivering and using natural gas. As a result the public is
at great risk of accidents and explosions. The CPUC has
undertaken several initiatives to improve system safety and
thus the quality of gas service offered to the public, and
has recently demonstrated a greater sense of urgency in
addressing systemic safety concerns. This sense of urgency
has been stimulated by legislative hearings such as those
we held in October and the introduction of AB 56 (Hill) in
the Assembly and this bill in the Senate."
"Enactment of this bill in its amended version accomplishes
the necessary first steps: the creation of a permanent
state policy placing safety first: a legislative directive
to implement the policy through a thorough-going change in
the culture of the industry and the utilities that places
safety first in operation and maintenance procedures and
programs for both workers and management; the creation of
safety plan process for each utility overseen by and
subject to the approval of the CPUC; and specific
assurances to the public that the money it will take to
implement safety programs will not be diverted to the
utilities' bottom line. This bill provides the
Legislature's policy direction and outlines a process that
assures continuous attention to safety in the gas
industry."
RM:nl 9/8/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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