BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1371|
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UNFINISHED BUSINESS
Bill No: SB 1371
Author: Leno (D), et al.
Amended: 8/22/14
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMMITTEE : 8-1, 4/29/14
AYES: Padilla, Block, Cannella, Corbett, DeSaulnier, Hill,
Pavley, Wolk
NOES: Knight
NO VOTE RECORDED: Fuller, De Le�n
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SENATE FLOOR : 25-10, 5/29/14
AYES: Beall, Block, Cannella, Corbett, Correa, De Le�n,
DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill,
Jackson, Lara, Leno, Lieu, Liu, Mitchell, Monning, Padilla,
Pavley, Roth, Steinberg, Torres, Wolk
NOES: Anderson, Berryhill, Gaines, Huff, Knight, Morrell,
Nielsen, Vidak, Walters, Wyland
NO VOTE RECORDED: Calderon, Fuller, Hueso, Wright, Yee
ASSEMBLY FLOOR : Not available
SUBJECT : Natural gas: leakage abatement
SOURCE : Utility Workers Union of America
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DIGEST : This bill requires the Public Utilities Commission
(PUC) to open a proceeding to adopt rules and procedures that
minimize natural gas leaks from PUC-regulated gas pipeline
facilities, with the goal of reducing GHG emissions.
Assembly Amendments refine the Legislature's policy and
procedure directives to the PUC for the proceeding, and make
technical and clarifying changes.
ANALYSIS :
Existing law:
1. Directs the California Air Resources Board (ARB) to establish
rules and regulations to achieve technologically feasible and
cost-effective greenhouse gas (GHG) emission reductions, as
specified.
2. Directs the PUC to regulate intrastate gas pipeline
facilities pursuant to federal law.
3. Requires that the PUC and each gas corporation place safety
of the public and gas corporation employees as the top
priority and take all reasonable and appropriate actions to
carry out this policy priority.
4. Requires each gas corporation to develop, adopt, and
implement a plan for the safe and reliable operation of its
gas pipeline facilities that is consistent with best
practices in the gas industry and that provides for the
following:
A. Preventive and reactive maintenance and repair;
B. Effective patrol and inspection to detect leaks and
effect timely repairs;
C. Timely response to customer and employee reports of
leaks; and
D. Adequately sized, qualified, and properly trained
workforce to carry out the plan.
5. Directs the PUC to determine the reasonableness of
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operational costs and design rates for public utilities.
Authorizes the PUC to fix rates, charges, standards, and
practices for service.
This bill:
1. Directs the PUC to require gas corporations to file a report,
as soon as practicable, that includes but is not limited to a
summary of leak management practices, a list of methane leaks
in 2013 by grade, a list of open leaks that are being
monitored or repaired, and an estimate of gas loss due to
leaks.
2. Requires the PUC, when considering the rules and procedures,
to give priority to safety, reliability, and affordability of
service.
3. Requires the PUC to collaborate on the rules and procedures
with the ARB.
4. Provides that rules and procedures apply to PUC-regulated
intrastate transmission and distribution natural gas
pipelines.
5. Requires adopted rules and procedures to:
A. Provide for the most technologically feasible and
cost-effective avoidance, reduction, and repair of leaks
and leaking components in PUC-regulated pipeline
facilities within a reasonable time after discovery.
B. 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.
C. Evaluate the operations, maintenance, and repair
practices for PUC-regulated gas pipeline facilities to
determine whether existing practices are effective at
minimizing leaks.
D. Establish and require the use of best practices for
leak surveys, patrols, leak survey technology, leak
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prevention, and leak reduction, and provide that
collected leak data remains the property of the utility
and is available to the PUC and parties in commission
proceedings as determined by the PUC.
E. Establish protocols and procedures for the
development and use of metrics to quantify the volume of
emissions from leaking components, not inconsistent with
existing protocols and procedures, and for evaluating
and tracking leaks, both geographically and over time.
F. Establish reporting requirements for the owner of
each PUC-regulated gas pipeline facility on the baseline
system-wide leak rate, with reporting to both the PUC
and the ARB.
G. Allow for the rules and procedures to be incorporated
into required safety plans.
H. Facilitate participation in all aspects of the
proceeding by the workforce of gas corporations and
state and federal entities with regulatory roles.
6. Requires the PUC, in order to achieve transparency and
accountability for rate revenues and best value for
ratepayers, and consistent with its existing ratemaking
procedures, to consider all of the following concerning
natural gas leaks and emissions:
A. Provision of a sufficient workforce to reduce hazards
and emissions from leaks, including leak avoidance,
reduction, and repair;
B. Provision of revenue for all leak activities,
including any adjustment of allowance for "lost or
unaccounted for" natural gas related to actual leakage
volumes;
C. Guidance regarding treatment of expenditures as being
either an item of expense or a capital investment; and
D. Impacts on gas service affordability related to costs
of compliance with the adopted rules and procedures.
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7. States that except as expressly so provided, this article
does not expand or in any manner alter PUC jurisdiction over
the regulation of GHG emissions.
8. States that nothing in this article shall affect or be
interpreted to affect the existing authority of the ARB to
adopt rules and regulations related to GHG emission
reductions.
9. Makes various findings and declarations related to natural
gas pipeline safety, leakage, and methane emissions.
Comments
According to the author's office, natural gas is valuable for
California's economy. Over twelve million households heat with
it and over 40% of our electricity is produced using natural
gas.
Natural gas is a dangerous substance if handled unsafely, as we
have learned to our sorrow in numerous serious fatal accidents
in California and around the country. Leak reduction has not
been a priority in the past. In fact, there are utility
ratemaking procedures that may act as a financial deterrent to
leak repair such as the allowances for lost and unaccounted for
gas.
Leaking gas pipelines are recognized as a major safety problem,
but the significant climate change impacts of fugitive methane
emissions from pipeline leaks are just now coming into focus.
Methane, the primary component of natural gas, is a potent GHG,
many times more powerful than carbon dioxide. Also, the volumes
of natural gas used in California are so large that uncontrolled
fugitive emissions from leaky pipes and valves are the
equivalent of millions of cars on the road.
Many climate change experts now warn that any net climate
benefit from the use of natural gas is reversed if methane
emissions are not curtailed. Reducing leaks and defects in
pipelines thus addresses urgent public concerns - public safety
and climate change. The latter is in keeping with California's
leadership in reducing GHG emissions pursuant to the California
Global Warming Solutions Act of 2006 (AB 32).
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The bottom line is a need to aggressively seek and find leaks
and to repair them without delay when they are found.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
One-time costs to the PUC of approximately $400,000 from the
Public Utilities Reimbursement Account (special fund) for the
required proceeding.
Ongoing costs to the PUC of approximately $160,000 from the
Public Utilities Reimbursement Account (fund) to perform
ongoing evaluations, audits and enforcement.
SUPPORT : (Verified 8/26/14)
Utility Workers Union of America (source)
American Lung Association in California
Asian Pacific Environmental Network
Bay Area Air Quality Management District
BlueGreen Alliance
Breathe California
California Coalition of Utility Employees
California Environmental Justice Alliance
California Interfaith Power and Light
California Labor Federation
California State Association of Electrical Workers
California Teamsters Public Affairs Council
Communications Workers of America, District 9
Engineers & Scientists of California, IFPTE Local 20
Environmental Defense Fund
Environmental Justice Project of Catholic Charities, Diocese of
Stockton
Global Green USA
Green California
Los Angeles Alliance for a New Economy
Los Angeles County Federation of Labor
Natural Resources Defense Council
Physicians for Social Responsibility, Los Angeles
San Francisco Bay Area Physicians for Social Responsibility
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SCOPE Los Angeles
Sierra Club California
The Utility Reform Network (TURN)
Union of Concerned Scientists
United Food and Commercial Workers Union, Western States Council
United Steelworkers, District 12
JG:d 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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