Amended in Senate April 8, 2014

Senate Bill No. 900

Introduced by Senator Hill

January 15, 2014

An act begin insert to amend Section 321.1 of, and end insert to add begin delete Sections 750 and 761.1 end delete begin insert Section 750 end insert to begin insert , end insert the Public Utilities Code, relating to public begin delete utility services end delete begin insert utilities end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 900, as amended, Hill. Public begin delete utilities: safety end delete begin insert Utilities end insert .

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. begin insert Existing law states it is the intent of the Legislature that the commission assess the economic effects or other consequences of its decisions as a part of each ratemaking, rulemaking, or other proceeding. end insert

This bill would require begin delete 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 end delete the commission to develop formal procedures to consider safety in a begin delete general end delete rate case application by an electrical corporation or gas corporation begin delete , 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 end delete . begin insert The bill would require the commission to take actions to assess and mitigate the impacts of its decisions on customer, public, and employee safety. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 321.1 of the end insert begin insert Public Utilities Code end insert begin insert is
amended to read: end insert

321.1.  

begin insert (a) end insert begin insert   end insert It is the intent of the Legislature that the commission
assess the economic effects or begin insert other end insert consequences of its decisions
as part of each ratemaking, rulemaking, or other proceeding, and
that this be accomplished using existing resources and within
existing commission structures. The commission shall not establish
a separate office or department for the purpose of evaluating
economic development consequences of commission activities.

begin insert

(b) The commission shall take all necessary and appropriate
actions to assess and mitigate the impacts of its decisions on
customer, public, and employee safety.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

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

750.  

The commission shall develop formal procedures to
consider safety in a begin delete general end delete rate case application by an electrical
corporation or gas begin delete 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. end delete begin insert corporation. end insert 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.

begin delete

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.

end delete