BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1389 (Hill) - Natural Gas Pipeline Safety Act of 2011.
Amended: May 6, 2014 Policy Vote: EU&C 10-0
Urgency: No Mandate: Yes (see staff comment)
Hearing Date: May 19, 2014 Consultant: Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1389 would prohibit the use of historic
operating pressures to determine the maximum allowable operating
pressure (MAOP) for an intrastate gas pipeline.
Fiscal Impact:
One-time costs of $490,000 from the Public Utilities
Commission Reimbursement Account (special) for proceeding
costs to implement new MAOP requirements.
Background: Existing law requires gas corporations to prepare
and submit to the CPUC a proposed comprehensive pressure testing
implementation plan for all intrastate transmission lines that
have not been pressure tested or have sufficient details related
to performance of pressure testing. The gas corporation is
required to pressure test all natural gas intrastate
transmission line segments, keep testing records, and be able to
accommodate an in-line inspection device.
Federal regulations (49 CFR 192.619) limit the maximum allowable
operating pressure (MAOP) of a steel or plastic pipeline that
was installed prior to July 1, 1970 to the lowest of four
pressures: (a) design pressure of the weakest element of the
segment; (b) the post-construction pressure plus the applicable
factor of safety; (c) the highest actual operating pressure that
the segment was subject to during the five years preceding July
1, 1970 (aka "the grandfather clause" or 619(c)); and (d) the
maximum safe pressure determined by the operator considering the
history of the segment. Under federal law, states may adopt
standards for intrastate transmission pipelines that are more
stringent than federal standards.
CPUC decision 11-06-017 prohibited gas pipeline operators from
using the grandfather clause as the sole basis in determining
SB 1389 (Hill)
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the MAOP.
Proposed Law: This bill would require a gas corporation to
determine the MAOP pursuant to CPUC rules or orders and would
specifically prohibit a gas corporation from determining the
maximum allowable operating pressure using the grandfather
clause.
Staff Comments: The CPCU, through decision 11-06-017, has found
the grandfather clause to be insufficient in safely determining
the MAOP. Thus, for any pipeline that has relied on the
grandfather clause previously, the CPUC requires that a pressure
test be conducted to confirm the MAOP. The MAOP is then
determined based on a combination of both the testing and the
grandfather clause. Basing the MAOP on both the test and the
grandfather clause is necessary for many older pipeline to be in
compliance with federal regulations. This bill, by completely
prohibiting the use of the grandfather clause, would change the
CPUC's existing practice. As such, the CPUC would incur costs to
open a new proceeding to establish new methods at a onetime cost
of $490,000.
Staff notes that it is the author's intention to codify the
CPUC's existing practices to help ensure compliance by gas
corporations.