BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 699|
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UNFINISHED BUSINESS
Bill No: SB 699
Author: Hill (D)
Amended: 8/22/14
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Public utilities: electrical corporations
SOURCE : Author
DIGEST : This bill requires the Public Utilities Commission
(PUC) to consider adopting rules to address physical security
risks to the distribution systems of electrical corporations.
Assembly Amendments delete the Senate version of this bill which
dealt with electrical corporations and instead add the current
language.
ANALYSIS :
Existing law:
1.Provides that the PUC has regulatory authority over public
utilities, including electrical corporations, as defined.
2.Requires the PUC to adopt inspection, maintenance, repair, and
replacement standards for the distribution systems of investor
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owned utilities (IOUs) in order to provide high-quality, safe,
and reliable service.
3.Requires the PUC to conduct a review to determine whether the
standards have been met and to perform the review after every
major outage.
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.
Background
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.
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.
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The PUC regulates investor owned electric, gas, water, rail,
some telecommunication companies. The PUC has authority to
order 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 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.
Comments
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."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
Increased one-time costs to the PUC in the $500,000 to
$600,000 range to expand the rule-making proceeding.
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Potential increased contracting costs of up to $250,000 for
consultant services.
Unknown, likely minor, ongoing costs.
JG:e 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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