BILL ANALYSIS �
SB 699
Page 1
SENATE THIRD READING
SB 699 (Hill)
As Amended August 22, 2014
Majority vote
SENATE VOTE :Vote not relevant
UTILITIES & COMMERCE 14-0
APPROPRIATIONS 17-0
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|Ayes:|Bradford, Patterson, |Ayes:|Gatto, Bigelow, |
| |Bonilla, Buchanan, | |Bocanegra, Bradford, Ian |
| |Ch�vez, Dahle, Fong, Beth | |Calderon, Campos, |
| |Gaines, Garcia, | |Donnelly, Eggman, Gomez, |
| |Roger Hern�ndez, Jones, | |Holden, Jones, Linder, |
| |Mullin, Quirk, Rendon | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
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SUMMARY : Requires the Public Utilities Commission (PUC) to
consider adopting rules to address physical security risks to
the distribution systems of electrical corporations.
Specifically, this bill :
1)Requires the PUC to open a new proceeding or phase of an
existing proceeding by July 1, 2015, to consider adoption of
rules.
2)Authorizes the PUC to, consistent with other provisions of
law, withhold from the public information generated or
obtained pursuant to these rules that it deems would pose a
security threat to the public if disclosed.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Increased one-time costs to the PUC in the $500,000 to
$600,000 range to expand the rule-making proceeding.
2)Potential increased contracting costs of up to $250,000 for
consultant services.
3)Unknown, likely minor, ongoing costs.
SB 699
Page 2
COMMENTS :
1)Author's statement: According to the author, "The security of
our nation's infrastructure is of paramount importance. The
recent sophisticated attack on an electric substation that a
former vice president at PG&E [Pacific Gas and Electric
Company] described as a "dress rehearsal" for future attacks
is evidence - not only that we are vulnerable - but that our
vulnerabilities are clearly understood by those who wish to
exploit them. As has been made clear by a recent National
Research Council report, one of the best ways to protect
ourselves from an attack on the electric grid is to lessen the
damage that any attack can do. If we lessen the consequence
of the failure of any one location or piece of equipment, if
we increase the speed with which we can respond to an outage,
if we can protect critical facilities from power disruption by
using clean distributed generation, then the effort required
for a malicious actor to seriously disrupt our power delivery
system will make the target much less interesting - and we
will be left with a more reliable grid."
2)The Metcalf electrical substation attack. A major driver of
this bill is the extensive damage that occurred in April 2013
at an electrical substation caused by a physical attack
(approximately 100 rounds from a high-powered rifle) fired on
electrical equipment. The severity of the damage and the
appearance that the attack was well planned raised attention
to the extent to which critical electric infrastructure were
vulnerable to potential terrorist attacks and raised questions
about the extent to which utilities addressed potential
vulnerabilities. In this incident the utility successfully
rerouted power to maintain electrical services and the
California Independent System Operator called for customer
conservation to maintain electrical system frequency within
federal regulatory requirements.
Investigations into identifying the perpetrator(s) of the
attack are ongoing.
3)Distinction between federal and state jurisdiction of the
electricity grid. The Federal Energy Regulatory Commission
(FERC) is a federal agency that regulates the interstate
transmission of electricity, natural gas, and oil, including
regulations of transmission and wholesale sales of electricity
in interstate commerce. California utilities own and operate
facilities that are regulated by FERC.
SB 699
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The PUC regulates investor owned electric, gas, water, rail,
some telecommunication companies. The PUC has authority to
order the California Investor Owned Utilities (IOUs) to
maintain distribution infrastructure and make improvements as
deemed necessary and allow the IOUs to recover these costs in
rates.
California's Publicly Owned Utilities (POUs) are
self-governing by a local government (city or county) or an
independently elected Board of Directors.
The attack occurred at an electrical substation under the
jurisdiction of FERC. Similarly, interstate natural gas
pipelines are under the jurisdiction of FERC. Most
telecommunication industries are regulated by the Federal
Communication Commission.
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083
FN: 0005269