SB 1371, as amended, Leno. Natural gas: leakage abatement.
The California Constitution establishes the Public Utilities Commission with regulatory authority over public utilities, authorizes the commission to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process, and authorizes the commission to fix rates and establish rules for all public utilities, subject to control by the Legislature.
The Natural Gas Pipeline Safety Act of 2011, within the Public Utilities Act, designates the commission as the state authority responsible for regulating and enforcing intrastate gas pipeline transportation and pipeline facilities pursuant to federal law, including the development, submission, and administration of a state pipeline safety program certification for natural gas pipelines.
The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt regulations to require the reporting and verification of emissions of greenhouse gases and to monitor and enforce compliance with the reporting and verification program, and requires the state board to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990, to be achieved by 2020.
This bill would require the commission to adopt rules and procedures governing the operation, maintenance, repair, and replacement of those commission-regulated gas pipeline facilities that are intrastate transmission and distribution lines to minimize leaks as a hazard to be mitigated pursuant to the Natural Gas Pipeline Safety Act of 2011 and to reduce emissions of natural gas from those facilities to the maximum extent feasible in order to advance the state’s goals in reducing emissions of greenhouse gases pursuant to the California Global Warming
Solutions Act of 2006. The bill would require the commission to commence a proceeding by January 15, 2015, to adopt those rules and procedures. The bill would require the commission to consult with the state board, the gas corporation’s workforce, and those other state and federal entities that the commission determines have regulatory roles ofbegin delete relevance.end deletebegin insert relevance to ensure that the rules and procedures it adopts are not inconsistent with the regulations and procedures adopted by those agencies.end insert The bill would require that the rules and proceduresbegin insert (1)end insert provide for the maximum technologically feasible and cost-effective avoidance, reduction, and repair of leaks and leaking components in those commission-regulated
gas pipeline facilities that are intrastate transmission and distribution lines within a reasonable time afterbegin delete discovery. The bill would require the rules and procedures to provide for the ranking and prioritization of recorded leaks and leaking components by volume or energy content. The bill would require that the rules and proceduresend deletebegin insert discovery, (2) provide for the repair of leaks as soon as reasonably possible after discovery, consistent with established safety requirements and the goals of reducing air pollution and the climate change impacts of methane emissions, (3)end insert evaluate the operations, maintenance, and repair practices for those facilities to determine whether existing practices are effective at achieving the goals of the bill and to determine whether alternative practices may be more effective at achieving
the goals of thebegin delete bill. The bill would require that the rules and proceduresend deletebegin insert bill, (4)end insert establish and require the use of best practices for leak surveys, patrols, leak survey technology, leak prevention, and leakbegin delete reduction. The bill would require the rules and procedures toend deletebegin insert reduction, (5)end insert establish protocols and procedures for the development and use of metrics to quantify the volume of emissions from leakingbegin delete components,end deletebegin insert
components not inconsistent with the protocols and procedures utilized in mandatory reporting to state and federal air quality agencies,end insert and for evaluating and tracking leaks, both geographically and over time, so that operators, the commission, and the public have accurate information about the number and severity of leaks and about the quantity of gas that is emitted to the atmosphere overbegin delete time. The bill would require that the rules and procedures,end deletebegin insert time, and (6)end insert to the extent feasible, require the owner of each commission-regulated gas pipeline facility that is an intrastate transmission or distribution line to calculate and report to the commission a baseline systemwide leak rate, to periodically update that systemwide leak rate calculation, and to annually report measures that will be
taken in the following year to reduce the systemwide leak rate to achieve the goals of the bill. The bill would require that the commission consider specified topics in a manner consistent with the commission’s existing ratemaking procedures and authority to establish just and reasonable rates.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
The Legislature finds and declares all of the
2following:
3(a) The Legislature has established that safety of the natural gas
4pipeline infrastructure in California is a priority for the Public
5Utilities Commission and gas corporations, and nothing in this
6article shall compromise or deprioritize safety as a top
7consideration.
8(b) It is undisputed that natural gas pipelines and infrastructure
9in California leak natural gas. The incidence of natural gas leaks
10and their repair is considered by the industry and regulators to be
11a significant indicator of pipeline integrity and safety.
12(c) The Legislature has
established a policy goal to significantly
13reduce emissions of greenhouse gases in California.
14(d) There is a growing awareness of the potency of methane,
15the primary component of natural gas, as a greenhouse gas. The
16Intergovernmental Panel on Climate Change estimates that the
17global warming potential of methane is 28 times that of carbon
18dioxide over a 100-year time horizon and 84 times that of carbon
19dioxide over a 20-year time horizon. There is also a growing
20awareness that climate change impacts impose high social costs,
21including impacts upon the public health and economy.
22(e) Reducing methane emissions by promptly and effectively
23repairing or replacing the pipes and associated infrastructure that
24is responsible for these leaks advances both policy goals of natural
25gas pipeline safety and integrity and reducing emissions of
26greenhouse gases.
27(f) Existing federal and state rules and regulations pertaining to
28the natural gas transmission and distribution system and associated
29infrastructure were not developed for the purpose of preventing
30the climate change impacts from leaks of natural gas.
31(g) Examining the methods used by gas corporations under
32existing federal and state rules to conduct and schedule leak repair
33and prevention based on the implications of these practices with
34respect to emissions of greenhousebegin delete gasesend deletebegin insert
gases, in addition to
35safety,end insert will enable a more thorough evaluation of whether existing
36practices are commensurate with California’s goals for reducing
37emissions of greenhouse gases.
P5 1(h) Reducing leaks and repairing pipelines and associated
2infrastructure in California provides significant employment
3opportunities for California residents and for domestic fabricators
4of high quality pipeline materials and other equipment associated
5with finding and fixing leaks.
6(i) Providing just and reasonable rate revenues for gas
7corporations to find, categorize, and repair leaks promptly when
8discovered, including employing an adequate workforce, is in the
9public interest, and promotes the interests of customers and the
10public.
Article 3 (commencing with Section 975) is added to
12Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
13read:
14
(a) For purposes of this chapter, “commission-regulated
18gas pipeline facility” has the same meaning as defined in Section
19950.
20(b) The commission shall adopt rules and procedures governing
21the operation, maintenance, repair, and replacement of those
22commission-regulated gas pipeline facilities that are intrastate
23transmission and distribution lines, as described in paragraphs (1)
24and (2) of subdivision (a) of Section 950, to achieve both of the
25following:
26(1) Minimize leaks as a hazard to be mitigated pursuant to
27paragraph (1) of subdivision (d) of Section 961.
28(2) While giving due consideration to the cost
considerations
29of Section 977, reduce emissions of natural gas from those
30commission-regulated gas pipeline facilities that are intrastate
31transmission and distribution lines to the maximum extent feasible
32in order to advance the state’s goals in reducing emissions of
33greenhouse gases pursuant to the California Global Warming
34Solutions Act of 2006 (Division 25.5 (commencing with Section
3538500) of the Health and Safety Code).
36(c) Not later than January 15, 2015, the commission shall
37commence a proceeding to adopt rules and procedures for those
38commission-regulated pipeline facilities that are intrastate
39transmission and distribution lines, as respectively described in
P6 1paragraphs (1) and (2) of subdivision (a) of Section 950, to achieve
2the goals of subdivision (b).
3(d) In developing the rules and procedures pursuant to
4subdivision (c), the commission shall consult with the State
Air
5Resources Board, the gas corporation’s workforce, and those other
6state and federal entities that the commission determines have
7regulatory roles ofbegin delete relevance.end deletebegin insert relevance, end insertbegin insertto ensure that the rules
8and procedures it adopts are not inconsistent with regulations and
9procedures adopted by those agencies.end insert
10(e) The rules and procedures adopted pursuant to subdivision
11(c) shall accomplish all of the following:
12(1) Provide for the maximum technologically feasible and
13cost-effective avoidance, reduction, and repair of leaks and leaking
14components in those commission-regulated gas pipeline
facilities
15that are intrastate transmission and distribution lines within a
16reasonable time after discovery, consistent with the California
17Global Warming Solutions Act of 2006 (Division 25.5
18(commencing with Section 38500) of the Health and Safety Code)
19to achieve the goals in subdivision (b).
20(2) Provide for the repair of leaks as soon as reasonably possible
21after discovery, consistent withbegin insert end insertbegin insertestablished safety requirements
22andend insert the goals of reducing air pollution and the climate change
23impacts of methane emissions.
24(3) Provide for the ranking and prioritization of recorded leaks
25and leaking components by volume or energy content.
26(4)
end delete
27begin insert(end insertbegin insert3)end insert Evaluate the operations, maintenance, and repair practices
28of those commission-regulated gas pipeline facilities that are
29intrastate transmission and distribution lines to determine whether
30existing practices are effective at achieving the goals of subdivision
31(b) and determine whether alternative practices may be more
32effective at achieving the goals of subdivision (b).
33(5)
end delete
34begin insert(4)end insert Establish and
require the use of best practices for leak
35surveys, patrols, leak survey technology, leak prevention, and leak
36reduction. The commission shall consider in the development of
37best practices the quality of materials and equipment from various
38sources, including foreign and domestic third-party suppliers.begin insert end insert
39begin insertCollected leak data shall remain the property of the utility and
P7 1shall be available to the commission and parties in commission
2proceedings as determined by the commission.end insert
3(6)
end delete
4begin insert(5)end insert Establish protocols and procedures for the development and
5use of metrics to quantify the volume of emissions from leaking
6begin delete components,end deletebegin insert
components not inconsistent with the protocols and
7procedures utilized in mandatory reporting to state and federal
8air quality agencies,end insert and for evaluating and tracking leaks, both
9geographically and over time, so that operators, the commission,
10and the public have accurate information about the number and
11severity of leaks and about the quantity of natural gas that is
12emitted into the atmosphere over time.
13(7)
end delete
14begin insert(end insertbegin insert6)end insert To the extent feasible, require the owner of each
15commission-regulated gas pipeline facility that is an intrastate
16
transmission or distribution line to calculate and report to the
17commission a baseline systemwide leak rate, along with any data
18and computer models used in making that calculation, to
19periodically update that systemwide leak rate calculation, and to
20annually report on measures that will be taken in the following
21year to reduce the systemwide leak rate to achieve the goals of
22subdivision (b).
23(f) The rules and procedures, including best practices and repair
24standards, shall be incorporated into the safety plans required by
25Section 961.
26(g) Consistent with subdivision (e) of Section 961, the
27commission shall facilitate robust ongoing participation of the
28workforce of gas corporations and those state and federal entities
29that have regulatory roles of relevance in all aspects of the
30proceeding. Nothing in this section affects the commission’s
31authority to determine eligibility for
intervenor compensation.
Consistent with the commission’s existing ratemaking
33procedures and authority to establish just and reasonable rates, the
34commission shall consider all of the following:
35(a) Providing an adequate workforce to achieve the objectives
36of reducing hazards and emissions from leaks, including leak
37avoidance, reduction, and repair.
38(b) Directing the revenues from any allowance for lost or
39unaccounted for natural gas to leak avoidance, reduction, and
40repair.
P8 1(b) Providing revenues for all activities identified and required
2pursuant to Section 976, including any adjustment of allowance
3for lost and unaccounted for gas related to actual leakage volumes.
4(c) Providing guidance for treatment of expenditures as being
5either an item of expense or a capital investment.
6(d) The impact on affordability of gas service for vulnerable
7customers as a result of the incremental costs of compliance with
8the adopted rules and procedures.
9(e) The social and public costs associated with climate change
10and air pollution, including peer-reviewed estimates of the social
11costs of emissions of greenhouse gases.
No reimbursement is required by this act pursuant to
13Section 6 of Article XIII B of the California Constitution because
14the only costs that may be incurred by a local agency or school
15district will be incurred because this act creates a new crime or
16infraction, eliminates a crime or infraction, or changes the penalty
17for a crime or infraction, within the meaning of Section 17556 of
18the Government Code, or changes the definition of a crime within
19the meaning of Section 6 of Article XIII B of the California
20Constitution.
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