BILL NUMBER: ABX2 14 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 27, 2001
INTRODUCED BY Assembly Member Canciamilla
MAY 16, 2001
An act to amend Sections 216, 222, and 228 of the Public
Utilities An act to add Section 216.6 to the Public
Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 14, as amended, Canciamilla. Natural gas supplies
.
(1) Existing law The Public Utilities Act
defines "public utility," "gas corporation," and "pipeline
corporation" for purposes of the Public Utilities Act.
This bill would provide that the production,
transportation, or sale of natural gas within this state by a
corporation or person does not make the corporation or person a
public utility, gas corporation, or pipeline corporation within the
meaning of these definitions solely because of the production,
transportation, or sale of natural gas, if the natural gas is of
insufficient quality or heating value to make it acceptable for
introduction into the line, plant, or system of a gas corporation or
state or local agency, is not provided or sold to more than 5
end-users, including any use by the corporation or person, and the
natural gas provided or sold to the end use customer is not resold by
the end use customer.
The bill would require however, that a corporation or person that
produces, transports, or sells natural gas within this state be
subject to the jurisdiction of the Public Utilities Commission for
compliance with all safety, service quality, and consumer protection
standards applicable to public utilities, and subject to certain
surcharges imposed on natural gas consumed in this state.
amend the act to require nonutility grade natural gas providers,
as defined, to notify the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation or the United States
Department of Transportation of its intent to engage in, or cease,
the selling of nonutility grade natural gas, as defined. The bill
would subject natural gas sold or transported to end users by
nonutility grade natural gas providers to specified provisions of
existing law, and would require end users who consume nonutility
grade natural gas provided by nonutility grade natural gas providers
to notify the State Board of Equalization of their intent to consume
that gas. The bill would require the Public Utilities Commission to
ensure in rate allocation cases that any costs resulting from the
bill do not result in an increase in costs to core customers of
natural gas or to natural gas corporations. Because a violation
of an order by the commission is a crime under existing
provisions of law the act is a crime , this bill
would impose a state-mandated local program by expanding the scope
of a crime.
(2) 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:
SECTION 1. Section 216 of the Public Utilities Code is
SECTION 1. Section 216.6 is added to the Public Utilities Code, to
read:
216.6. (a) As used in this section, the following terms have the
following meanings:
(1) "Nonutility grade natural gas provider" means a person or
corporation meeting all of the following criteria:
(A) The corporation or person produces, sells, or transports
nonutility grade natural gas within this state for consumption by end
users.
(B) The corporation or person sells or transports that nonutility
grade natural gas to no more than five end users, provided that the
gas actually delivered to the end user is nonutility grade natural
gas.
(C) The corporation or person uses a pipeline that complies with
subparagraph (B) to serve end users other than the owner of the
pipeline.
(2) "Nonutility grade natural gas" means natural gas that meets
one or more of the following criteria:
(A) Natural gas that is delivered in the Pacific Gas and Electric
Company service area and has a heating range of less than 970 British
thermal units (Btus) or more than 1150 Btus.
(B) Natural gas that is delivered in the Sempra Energy service
area and has a heating range of less then 970 Btus or more than 1250
Btus.
(C) The nonutility grade natural gas provider determines the
natural gas is of insufficient quality to make it acceptable for
introduction into the line, plant, or system of the gas corporation
nearest the well producing that natural gas or to a state or local
agency.
(3) "End user" means any person or corporation, other than the
pipeline owner or its subsidiaries or affiliates, that purchases
natural gas or natural gas transportation services from the
nonutility grade natural gas provider for its own use and does not
sell or resell or further transport the natural gas for use by
another entity. A pipeline owner may not be considered an end user
solely because of consumption of natural gas necessary for the
operation of the pipeline.
(b) (1) To protect life, health, property, and natural resources,
any pipeline transporting nonutility grade natural gas pursuant to
this section owned or operated by a nonutility grade natural gas
provider is subject to the jurisdiction of the following entities, as
follows:
(A) The Division of Oil, Gas, and Geothermal Resources in the
Department of Conservation, if the proprietary pipeline is located
within the administrative boundaries of an oil field as defined by
the Division of Oil, Gas, and Geothermal Resources.
(B) The United States Department of Transportation for compliance
with Sections 190 to 193, inclusive, of Title 49 of the Code of
Federal Regulations, if the proprietary pipeline is located outside
the jurisdiction of the Division of Oil, Gas, and Geothermal
Resources.
(2) The nonutility grade natural gas provider shall notify the
Division of Oil, Gas, and Geothermal Resources or the United States
Department of Transportation, as applicable, of its intent to engage
in the selling of nonutility grade natural gas or of its intent to
cease the selling of that gas.
(3) Expansion of an existing proprietary natural gas pipeline for
the sole purpose of serving end users does not make the existing
pipeline subject to this section.
(c) Notwithstanding any other provision of law, natural gas sold
or transported to end users by nonutility grade natural gas providers
is subject to Article 10 (commencing with Section 890) of Chapter 4.
For purposes of compliance with this division, end users who
consume nonutility grade natural gas provided by nonutility grade
natural gas providers shall notify the State Board of Equalization of
their intent to consume that gas.
(d) Notwithstanding Section 216, 222, or 228, a nonutility grade
natural gas provider providing service pursuant to this section is
not a public utility, a gas company, or a gas pipeline within the
meaning of this title solely because of the production,
transportation, or sale of natural gas pursuant to this section.
(e) The commission shall ensure in rate allocation cases that any
costs resulting from the implementation of this section do not result
in an increase in costs to core customers of natural gas or to
natural gas corporations. amended to read:
216. (a) "Public utility" includes every common carrier, toll
bridge corporation, pipeline corporation, gas corporation, electrical
corporation, telephone corporation, telegraph corporation, water
corporation, sewer system corporation, and heat corporation, where
the service is performed for, or the commodity is delivered to, the
public or any portion thereof.
(b) Whenever any common carrier, toll bridge corporation, pipeline
corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewer system
corporation, or heat corporation performs a service for, or delivers
a commodity to, the public or any portion thereof for which any
compensation or payment whatsoever is received, that common carrier,
toll bridge corporation, pipeline corporation, gas corporation,
electrical corporation, telephone corporation, telegraph corporation,
water corporation, sewer system corporation, or heat corporation, is
a public utility subject to the jurisdiction, control, and
regulation of the commission and the provisions of this part.
(c) When any person or corporation performs any service for, or
delivers any commodity to, any person, private corporation,
municipality, or other political subdivision of the state, that in
turn either directly or indirectly, mediately or immediately,
performs that service for, or delivers that commodity to, the public
or any portion thereof, that person or corporation is a public
utility subject to the jurisdiction, control, and regulation of the
commission and the provisions of this part.
(d) Ownership or operation of a facility that employs cogeneration
technology or produces power from other than a conventional power
source or the ownership or operation of a facility which employs
landfill gas technology does not make a corporation or person a
public utility within the meaning of this section solely because of
the ownership or operation of that facility.
(e) Any corporation or person engaged directly or indirectly in
developing, producing, transmitting, distributing, delivering, or
selling any form of heat derived from geothermal or solar resources
or from cogeneration technology to any privately owned or publicly
owned public utility, or to the public or any portion thereof, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.
(f) The ownership or operation of a facility that sells compressed
natural gas at retail to the public for use only as a motor vehicle
fuel, and the selling of compressed natural gas at retail from that
facility to the public for use only as a motor vehicle fuel, does not
make the corporation or person a public utility within the meaning
of this section solely because of that ownership, operation, or sale.
(g) Ownership or operation of a facility that has been certified
by the Federal Energy Regulatory Commission as an exempt wholesale
generator pursuant to Section 32 of the Public Utility Holding
Company Act of 1935 (Chapter 2C (commencing with Section 79) of Title
15 of the United States Code) does not make a corporation or person
a public utility within the meaning of this section, solely due to
the ownership or operation of that facility.
(h) The ownership, control, operation, or management of an
electric plant used for direct transactions or participation directly
or indirectly in direct transactions, as permitted by subdivision
(b) of Section 365, sales into the Power Exchange referred to in
Section 365, or the use or sale as permitted under subdivisions (b)
to (d), inclusive, of Section 218, shall not make a corporation or
person a public utility within the meaning of this section solely
because of that ownership, participation, or sale.
(i) The production, transportation, or sale of natural gas within
this state by a corporation or person does not make the corporation
or person a public utility within the meaning of this section solely
because of the production, transportation, or sale of natural gas, if
all of the following conditions exist:
(1) The natural gas is of insufficient quality or heating value to
make it acceptable for introduction into the line, plant, or system
of a gas corporation or state or local agency.
(2) The natural gas is not provided or sold to more than five end
users, including any use by the corporation or person.
(3) The natural gas provided or sold to an end use customer is not
resold by the end use customer.
(j) A corporation or person described in subdivision (i) is
subject to the jurisdiction of the commission for compliance with all
utility safety, service quality, and consumer protection standards
applicable to public utilities as defined in subdivision (a) of
Section 216.
(k) Subdivision (i) may not result in any shift of costs to core
customers of gas corporations.
SEC. 2. Section 222 of the Public Utilities Code is amended to
read:
222. (a) "Gas corporation" includes every corporation or person
owning, controlling, operating, or managing any gas plant for
compensation within this state, except where gas is made or produced
on and distributed by the maker or producer through private property
alone solely for his or her own use or the use of his or her tenants
and not for sale to others.
(b) "Gas corporation" shall not include a corporation or person
employing landfill gas technology for the production of gas for its
own use or the use of its tenants or for sale to a gas corporation or
state or local public agency, except that if the gas produced is of
insufficient quality or heating value that it is unacceptable for
introduction into the line, plant, or system of a gas corporation or
state or local public agency, the person or corporation employing
landfill gas technology may without becoming a gas corporation for
purposes of this part sell the gas so produced to not more than four
other corporations or persons.
(c) The production of natural gas within this state by a
corporation or person does not make the corporation or person a gas
corporation within the meaning of this section solely because of the
production of natural gas, if all of the following conditions exist:
(1) The natural gas is of insufficient quality or heating value to
make it acceptable for introduction into the line, plant, or system
of a gas corporation or state or local agency.
(2) The natural gas is not provided or sold to more than five end
users, including any use by the corporation or person.
(3) The natural gas provided or sold to an end use customer is not
resold by the end use customer.
(d) A corporation or person described in subdivision (c) is
subject to the jurisdiction of the commission for compliance with all
utility safety, service quality, and consumer protection standards
applicable to public utilities as defined in subdivision (a) of
Section 216.
(e) Subdivision (c) may not result in any shift of costs to core
customers of gas corporations.
SEC. 3. Section 228 of the Public Utilities Code is amended to
read:
228. (a) "Pipeline corporation" includes every corporation or
person owning, controlling, operating, or managing any pipeline for
compensation within this state.
(b) "Pipeline corporation" shall not include a corporation or
person employing landfill gas technology and owning, controlling,
operating, or managing any pipeline solely for the transmission or
distribution of landfill gas or other form of energy generated or
produced therefrom.
(c) The transportation of natural gas within this state by a
corporation or person does not make the corporation or person a
pipeline corporation within the meaning of this section solely
because of the transportation of natural gas, if all of the following
conditions exist:
(1) The natural gas is of insufficient quality or heating value to
make it acceptable for introduction into the line, plant, or system
of a gas corporation or state or local agency.
(2) The natural gas is not provided or sold to more than five end
users, including any use by the corporation or person.
(3) The natural gas provided or sold to an end use customer is not
resold by the end use customer.
(d) A corporation or person described in subdivision (c) is
subject to the jurisdiction of the commission for compliance with all
utility safety, service quality, and consumer protection standards
applicable to public utilities as defined in subdivision (a) of
Section 216.
(e) Subdivision (c) may not result in any shift of costs to core
customers of gas corporations.
(f) Natural gas provided or sold to end users pursuant to
subdivision (c) is subject to Article 10 (commencing with Section
890) of Chapter 4. For purposes of complying with Article 10
(commencing with Section 890) of Chapter 4, all persons consuming
natural gas pursuant to subdivision (c) shall be treated as if the
gas that is consumed was delivered by an interstate pipeline.
However, the exemption for gas transported on proprietary pipelines
contained in Section 896 does not apply to gas transported pursuant
to subdivision (c).
SEC. 4.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIIIB of the California Constitution.