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.begin insert The act requires each gas corporation to develop a plan, as specified, for the safe and reliable operation of its commission-regulated gas pipeline facility, as defined. The act requires the commission to accept, modify, or reject the plan for each gas corporation by December 31, 2012, and to build into an approved plan sufficient flexibility to redirect activities to respond to safety requirements. The actend insertbegin insert requires that the plan be periodically reviewed and updated.end insert
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, giving priority to safety, reliability, and affordability of service, 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 2011begin insert, consistent with specified federal regulations, and a specified order of the commission,end insert 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.begin insert
The bill would require the commission to require gas corporations to file a report as soon as practicable, that includes a summary of utility leak management practices, a list of new methane leaks in 2013 by grade, a list of open leaks that are being monitored or are scheduled to be repaired, and a best estimate of gas loss due to leaks.end insert The bill would require the commission to commence a proceeding by January 15, 2015, to adopt those rules andbegin delete 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 of relevance to ensure that the rules and procedures it adopts are not inconsistent with the regulations and procedures adopted by those agencies.end deletebegin insert procedures,
in consultation with the State Air Resources Board.end insert The bill would require that the rules and procedures (1) 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 after 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) evaluate the operations, maintenance, and repair practices for those facilities to determine whether existing practices are effective atbegin delete achievingend deletebegin insert reducing methane leaks and promoting public safety, achieveend insert
the goals of thebegin delete bill and to determineend deletebegin insert bill, andend insert whether alternative practices may be more effective at achieving the goals of the bill, (4) establish and require the use of best practices for leak surveys, patrols, leak survey technology, leak prevention, and leak reduction, (5) establish protocols and procedures for the development and use of metrics to quantify the volume of emissions from leakingbegin delete components not inconsistent with the protocols and procedures utilized in mandatory reporting to state and federal air quality agencies, and for evaluating and tracking leaks, both geographically and over time, so thatend deletebegin insert gas pipeline facilities, and
for evaluating and tracking leaks geographically and over time that may be incorporated into a gas corporation’s plan for the safe and reliable operation of its commission-regulated gas pipeline facility, or into other state emissions tracking systems, or both, including regulations of the State Air Resources Board for the reporting of greenhouse gases, with the requirement that the metricsend insertbegin insert provideend insert operators, the commission, and the publicbegin delete haveend deletebegin insert withend insert accurate information about the number and severity of leaks and about the quantity of gas that is emitted to the atmosphere over time, and (6) 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 commissionbegin insert and the State Air Resources Boardend insert 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. In order to achieve transparency and accountability for rate revenues and best value for ratepayers, 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
P5 1awareness that climate change impacts impose high social costs,
2including impacts upon the public health and economy.
3(e) Reducing methane emissions by promptly and effectively
4repairing or replacing the pipes and associated
infrastructure that
5is responsible for these leaks advances both policy goals of natural
6gas pipeline safety and integrity and reducing emissions of
7greenhouse gases.
8(f) Existing federal and state rules and regulations pertaining to
9the natural gas transmission and distribution system and associated
10infrastructure were not developed for the purpose of preventing
11the climate change impacts from leaks of natural gas.
12(g) Examining the methods used by gas corporations under
13existing federal and state rules to conduct and schedule leak repair
14and prevention based on the implications of these practices with
15respect to emissions of greenhouse gases, in addition to safety,
16will enable a more thorough evaluation of whether existing
17practices are commensurate with California’s goals for
reducing
18emissions of greenhouse gases.
19(h) Reducing leaks and repairing pipelines and associated
20infrastructure in California provides significant employment
21opportunities for California residents and for domestic fabricators
22of high quality pipeline materials and other equipment associated
23with finding and fixing leaks.
24(i) Providing just and reasonable rate revenues for gas
25corporations to find, categorize, and repair leaks promptly when
26discovered, including employing an adequate workforce, is in the
27public interest, and promotes the interests of customers and the
28public.
Article 3 (commencing with Section 975) is added to
30Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
31read:
32
(a) For purposes of this chapter, “commission-regulated
36gas pipeline facility” has the same meaning as defined in Section
37950.
38(b) With priority given to safety, reliability, and affordability
39of service, the commission shall adopt rules and procedures
40governing the operation, maintenance, repair, and replacement of
P6 1those commission-regulated gas pipeline facilities that are intrastate
2transmission and distribution lines, as described in paragraphs (1)
3and (2) of subdivision (a) of Section 950, to achieve both of the
4following:
5(1) Minimize leaks as a hazard to be mitigated pursuant to
6paragraph (1)
of subdivision (d) of Sectionbegin delete 961.end deletebegin insert 961, consistent
7with the requirements of Section 192.703(c) of Subpart M of Title
849end insertbegin insert of the Code of Federal Regulations, the commission’s General
9Order 112-E, and their successors.end insert
10(2) While giving due consideration to the cost considerations
11of Section 977, reduce emissions of natural gas from those
12commission-regulated gas pipeline facilities that are intrastate
13transmission and distribution lines to the maximum extent feasible
14in order to advance the state’s goals in reducing emissions of
15greenhouse gases pursuant to the California Global Warming
16Solutions
Act of 2006 (Division 25.5 (commencing with Section
1738500) of the Health and Safety Code).
18(c) As soon as practicable, the commission shall require gas
19corporations to file a report that includes, but is not limited to, all
20of the following:
21(1) A summary of utility leak management practices.
end insertbegin insert22(2) A list of new methane leaks in 2013 by grade.
end insertbegin insert
23(3) A list of open leaks that are being monitored or are
24scheduled to be repaired.
25(4) A best estimate of gas loss due to leaks.
end insert26(c)
end delete
27begin insert(d)end insert Not later than January 15, 2015, the commissionbegin insert, in
28consultation with the State Air Resources Board,end insert
shall commence
29a proceeding to adopt rules and procedures for those
30commission-regulated pipeline facilities that are intrastate
31transmission and distribution lines, as respectively described in
32paragraphs (1) and (2) of subdivision (a) of Section 950, to achieve
33the goals of subdivision (b).
34(d) In developing the rules and procedures pursuant to
35subdivision (c), the commission shall consult with the State Air
36Resources Board, the gas corporation’s workforce, and those other
37state and federal entities that the commission determines have
38regulatory roles of relevance, to ensure that the rules and
39procedures it adopts are not inconsistent with regulations and
40procedures adopted by those agencies.
P7 1(e) The rules and procedures adopted pursuant to subdivision
2begin delete (c)end deletebegin insert (d)end insert shall accomplish all of the following:
3(1) Provide for the maximum technologically feasible and
4cost-effective avoidance, reduction, and repair of leaks and leaking
5components in those commission-regulated gas pipeline facilities
6that are intrastate transmission and distribution lines within a
7reasonable time after discovery, consistent with the California
8Global Warming Solutions Act of 2006 (Division 25.5
9(commencing with Section 38500) of the Health and Safety Code)
10to achieve the goals in subdivision (b).
11(2) Provide for the repair of leaks as soon as reasonably possible
12after discovery, consistent with established safety requirements
13and the goals of reducing air pollution and the climate change
14impacts of methane emissions.
15(3) Evaluate the operations, maintenance, and repair practices
16of those commission-regulated gas pipeline facilities that are
17intrastate transmission and distribution lines to determine whether
18existing practices are effective atbegin delete achievingend deletebegin insert reducing methane
19leaks and promoting public safety, consistent with Section 961,end insert
20begin insert achieveend insert
the goals of subdivisionbegin delete (b) and determineend deletebegin insert (b), andend insert whether
21alternative practices may be more effective at achieving the goals
22of subdivision (b).
23(4) Establish and require the use of best practices for leak
24surveys, patrols, leak survey technology, leak prevention, and leak
25reduction. The commission shall consider in the development of
26best practices the quality of materials andbegin delete equipment from various
27sources, including foreign and domestic third-party suppliers.end delete
28begin insert equipment.end insert Collected
leak data shall remain the property of the
29utility and shall be available to the commission and parties in
30commission proceedings as determined by thebegin delete commission.end delete
31begin insert commission or specified by statute.end insert
32(5) Establish protocols and procedures for the development and
33use of metrics to quantify the volume of emissions from leakingbegin delete34
components not inconsistent with the protocols and procedures
35utilized in mandatory reporting to state and federal air quality
36agencies, and for evaluating and tracking leaks, both geographically
37and over time, so thatend delete
38and tracking leaks geographically and over time, that may be
39incorporated into the plans required by Section 961, or into other
40state emissions tracking systems, or both, including the regulations
P8 1for the reporting of greenhouse gases of the State Air Resources
2Board. The quantification of emissions shall provideend insert operators,
3the commission, and the publicbegin delete haveend deletebegin insert
withend insert accurate information
4about the number and severity of leaks and about the quantity of
5natural gas that is emitted into the atmosphere over time.
6(6) To the extent feasible, require the owner of each
7commission-regulated gas pipeline facility that is an intrastate
8
transmission or distribution line to calculate and report to the
9commissionbegin insert and the State Air Resources Boardend insert a baseline
10systemwide leak rate, along with any data and computer models
11used in making that calculation, to periodically update that
12systemwide leak rate calculation, and to annually report on
13measures that will be taken in the following year to reduce the
14systemwide leak rate to achieve the goals of subdivision (b).
15(f) The rules and procedures, including best practices and repair
16standards, shall be incorporated into the safety plans required by
17Sectionbegin delete 961.end deletebegin insert 961 and the
applicable general orders adopted by
18the commission.end insert
19(g) Consistent with subdivision (e) of Section 961, the
20commission shall facilitate robust ongoing participation of the
21workforce of gas corporations and those state and federal entities
22that have regulatory roles of relevance in all aspects of the
23begin delete proceeding.end deletebegin insert proceeding to ensure that the rules and procedures it
24adopts are not inconsistent with the regulations and procedures
25adopted by those agencies.end insert
Nothing in this section affects the
26commission’s authority to determine eligibility for intervenor
27compensation.
28(h) Nothing in this article shall affect or shall be interpreted to
29affect the existing authority of the State Air Resources Board to
30adopt rules and regulations to achieve the maximum
31technologically feasible and cost-effective greenhouse gas emission
32reductions and to maintain and continue emission reductions under
33the California Global Warming Solutions Act of 2006 (Division
3425.5 (commencing with Section 38500) of the Health and Safety
35Code).
In order to achieve transparency and accountability for
37rate revenues and best value for ratepayers, and consistent with
38the commission’s existing ratemaking procedures and authority
39to establish just and reasonable rates, the commission shall consider
40all of the following:
P9 1(a) Providing an adequate workforce to achieve the objectives
2of reducing hazards and emissions from leaks, including leak
3avoidance, reduction, and repair.
4(b) Providing revenues for all activities identified and required
5pursuant to Section 975, including any adjustment of allowance
6for lost and unaccounted for gas related to actual leakage volumes.
7(c) Providing guidance for treatment of expenditures as being
8either an item of expense or a capital investment.
9(d) The impact on affordability of gas service for vulnerable
10customers as a result of the incremental costs of compliance with
11the adopted rules and procedures.
Except as expressly so provided, this article does not
13expand or in any manner alter the commission’s jurisdiction over
14the regulation of emissions of greenhouse gases.
No reimbursement is required by this act pursuant to
16Section 6 of Article XIII B of the California Constitution because
17the only costs that may be incurred by a local agency or school
18district will be incurred because this act creates a new crime or
19infraction, eliminates a crime or infraction, or changes the penalty
20for a crime or infraction, within the meaning of Section 17556 of
21the Government Code, or changes the definition of a crime within
22the meaning of Section 6 of Article XIII B of the California
23Constitution.
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