Senate Bill No. 900

Introduced by Senator Hill

January 15, 2014

An act to add Sections 750 and 761.1 to the Public Utilities Code, relating to public utility services.

LEGISLATIVE COUNSEL’S DIGEST

SB 900, as introduced, Hill. Public utilities: safety.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility and authorizes the commission to establish rules for all public utilities, subject to control by the Legislature. If the commission finds after a hearing that the rules, practices, equipment, appliances, facilities, or service of any public utility, or the methods of manufacture, distribution, transmission, storage, or supply employed by the public utility, are unjust, unreasonable, unsafe, improper, inadequate, or insufficient, the Public Utilities Act requires that the commission determine and, by order or rule, fix the rules, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced, or employed.

This bill would require the commission to develop safety risk management procedures for use in quasi-legislative proceedings to assist the commission in determining whether or not a proposed policy or rule change will affect safety. The bill would require that the safety risk management procedures ensure the sufficient development of the evidentiary record to support findings with regard to the incremental effect on safety of the proposed policy or rule changes made in quasi-legislative proceedings. The bill would require the commission to implement the safety risk management procedures by October 1, 2015. The bill would additionally require the commission to develop formal procedures to consider safety in a general rate case application by an electrical corporation or gas corporation, including a separate rate case application that considers a subset of the corporation’s revenues, expenses, and investments in plant and equipment to establish an approved revenue requirement.

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.  

Section 750 is added to the Public Utilities Code,
to read:

750.  

The commission shall develop formal procedures to
consider safety in a general rate case application by an electrical
corporation or gas corporation, including a separate rate case
application that considers a subset of the corporation’s revenues,
expenses, and investments in plant and equipment to establish an
approved revenue requirement. The procedures shall include all
of the following:

(a) In advance of, or concurrent with, the scheduled submission
of a rate case application by an electrical corporation or gas
corporation, commission staff shall produce a report on the safety
performance of that corporation in those areas in which the
corporation’s revenue requirement is under consideration. The
report shall examine the safety performance of the electrical
corporation or gas corporation over a time period no shorter than
the period between the scheduled rate case applications. The report
shall be entered into the record of the rate case proceeding.

(b) Subsequent to the submission of a rate case application by
an electrical corporation or gas corporation, commission staff units
responsible for safety risk assessment shall evaluate the quality of
the risk analysis of the applicant’s incremental safety-related
revenue requests, including the quality of the alternatives analysis.
The report shall be entered into the record of the rate case
proceeding.

(c) The commission, in approving a decision determining the
revenue requirements of an electrical corporation or a gas
corporation in a rate case proceeding, shall make risk-informed
findings as to the safety benefits of incremental funding requests
of safety-related proposed expenditures by the corporation.

(d) The commission, in approving a decision determining the
revenue requirements of an electrical corporation or gas corporation
in a rate case proceeding, shall order commission staff to monitor
the safety performance of the corporation and to prepare a report
on the safety performance of that corporation in advance of, or
concurrent with, the next rate case application by the corporation.

SEC. 2.  

Section 761.1 is added to the Public Utilities Code, to
read:

761.1.  

(a) The commission shall develop safety risk
management procedures for use in quasi-legislative proceedings.
The safety risk management procedures shall assist the commission
in determining whether or not a proposed policy or rule change
will affect safety. The safety risk management procedures shall
ensure the sufficient development of the evidentiary record to
support findings with regard to the incremental effect on safety of
the proposed policy or rule changes made in quasi-legislative
proceedings.

(b) The safety risk management procedures shall include all of
the following:

(1) A description of a plant, equipment, or system proposed to
be changed.

(2) Identification of the hazards that may be created, eliminated,
or modified by the proposed policy or rule change.

(3) An analysis of risks using quantitative or qualitative
estimates of the likelihood of hazards occurring in a plant,
equipment, or system.

(4) The assessment of risks, which is a decision as to whether
a risk is or is not acceptable to the commission.

(5) The inclusion of risk controls, which may be used to
eliminate or mitigate the risks of a proposed policy or rule change.
The controls may include any or all of the following:

(A) The redesign of the approach to achieve the policy goal that
eliminates or reduces the safety risk.

(B) Incorporation of technological or other devices to reduce
safety risks.

(C) The use of warning procedures or devices to alert an actor
of a hazardous condition in order to give that actor time to avert
the hazard.

(D) Development of procedures or training to manage the
consequences of a hazardous condition.

(c) The safety risk management procedures shall ensure the
opportunity for the commission to exercise future safety assurance
activities, including monitoring, data tracking and analysis, audits,
investigations, and enforcement action.

(d) If another state entity holds or shares regulatory authority
to ensure safety, including the State Fire Marshal or the California
Building Standards Commission, the commission shall consult
with that state entity.

(e) The commission shall implement the safety risk management
procedures by October 1, 2015.