BILL NUMBER: AB 56 CHAPTERED
BILL TEXT
CHAPTER 519
FILED WITH SECRETARY OF STATE OCTOBER 7, 2011
APPROVED BY GOVERNOR OCTOBER 7, 2011
PASSED THE SENATE SEPTEMBER 8, 2011
PASSED THE ASSEMBLY SEPTEMBER 9, 2011
AMENDED IN SENATE SEPTEMBER 7, 2011
AMENDED IN SENATE SEPTEMBER 2, 2011
AMENDED IN SENATE AUGUST 30, 2011
AMENDED IN SENATE JULY 13, 2011
AMENDED IN SENATE JUNE 29, 2011
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MAY 18, 2011
AMENDED IN ASSEMBLY MARCH 16, 2011
AMENDED IN ASSEMBLY FEBRUARY 23, 2011
INTRODUCED BY Assembly Member Hill
(Coauthors: Assembly Members Dickinson and Bonnie Lowenthal)
(Coauthors: Senators Alquist and Corbett)
DECEMBER 6, 2010
An act to add Sections 956.5, 957, 958, 958.5, 959, and 969 to the
Public Utilities Code, relating to gas corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 56, Hill. Gas corporations: rate recovery and expenditure:
intrastate pipeline safety.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including gas
corporations, as defined. Existing law authorizes the commission to
fix the rates and charges for every public utility, and requires that
those rates and charges be just and reasonable.
This bill would prohibit a gas corporation from recovering any
fine or penalty in any rate approved by the commission. The bill
would require a gas corporation to demonstrate to the satisfaction of
the commission in its general rate case proceeding that the
requested revenue requirements will be sufficient to enable the gas
corporation to fund those projects and activities necessary to
maintain safe and reliable service and to meet federal and state
safety requirements applicable to its gas plant, in a cost-effective
manner. The bill would require a gas corporation to file gas
transmission and storage safety reports with the commission's
consumer protection safety division that include certain matter and
require that if the division determines that there is a deficiency in
a gas corporation's prioritization or administration of the storage
or pipeline capital projects or operation and maintenance activities,
to bring the deficiency to the commission's immediate attention.
This bill would require the commission, in any ratemaking
proceeding in which the commission authorizes a gas corporation to
recover expenses for a federal transmission pipeline integrity
management program, or for related capital expenditures for the
maintenance and repair of transmission pipelines, to require the gas
corporation to establish and maintain a balancing account for the
recovery of those expenses. This provision would not become operative
if SB 879 is enacted and becomes effective on or before January 1,
2012, and SB 879 enacts an identical provision.
(2) The Public Utilities Act authorizes the commission to
ascertain and fix just and reasonable standards, classifications,
regulations, practices, measurements, or service to be furnished,
imposed, observed, and followed by specified public utilities,
including gas corporations.
Existing federal law requires the United States Department of
Transportation Pipeline and Hazardous Materials Safety Administration
(PHMSA) to adopt minimum safety standards for pipeline
transportation and for pipeline facilities, including an interstate
gas pipeline facility and intrastate gas pipeline facility, as
defined. Existing law authorizes the Secretary of Transportation to
prescribe or enforce safety standards and practices for an intrastate
pipeline facility or intrastate pipeline transportation to the
extent that the safety standards and practices are regulated by a
state authority that submits to the secretary annually a
certification for the facilities and transportation or alternatively
authorizes the secretary to make an agreement with a state authority
authorizing it to take necessary action to meet certain pipeline
safety requirements. Existing law prohibits a state authority from
adopting or continuing in force safety standards for interstate
pipeline facilities or interstate pipeline transportation. Existing
law authorizes a state authority that has submitted a current
certification to adopt additional or more stringent safety standards
for intrastate pipeline facilities and intrastate pipeline
transportation only if those standards are compatible with the
minimum standards prescribed by PHMSA.
This bill would require owners and operators of intrastate
transmission and distribution lines for natural gas, at least once
each calendar year, to meet with each local fire department having
fire suppression responsibilities in the area where those lines are
located to discuss and review contingency plans for emergencies
involving the intrastate transmission and distribution lines within
the jurisdiction of the local fire department. The bill would require
the commission, unless it determines that doing so is preempted
under federal law, to require the installation of automatic shutoff
or remote controlled sectionalized block valves on certain intrastate
transmission lines, as specified. The bill would require each gas
corporation to prepare and submit to the commission a proposed
comprehensive pressure testing implementation plan that includes
specified elements and require that, at the conclusion of an
implementation period, all intrastate transmission line segments meet
specified requirements.
(3) 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.
(4) 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 956.5 is added to the Public Utilities Code, to
read:
956.5. Owners and operators of intrastate transmission and
distribution lines, at least once each calendar year, shall meet with
each local fire department having fire suppression responsibilities
in the area where those lines are located to discuss and review
contingency plans for emergencies involving the intrastate
transmission and distribution lines within the jurisdiction of the
local fire department.
SEC. 2. Section 957 is added to the Public Utilities Code, to
read:
957. (a) (1) Unless the commission determines that it is
prohibited from doing so by Section 60104(c) of Title 49 of the
United States Code, the commission shall require the installation of
automatic shutoff or remote controlled sectionalized block valves on
both of the following facilities, if it determines those valves are
necessary for the protection of the public:
(A) Intrastate transmission lines that are located in a high
consequence area.
(B) Intrastate transmission lines that traverse an active seismic
earthquake fault.
(2) Each owner or operator of a commission-regulated gas pipeline
facility that is an intrastate transmission line shall provide the
commission with a valve location plan, along with any recommendations
for valve locations. The commission may make modifications to the
valve location plan or provide for variations from any location
requirements adopted by the commission pursuant to this section that
it deems necessary or appropriate and consistent with protection of
the public.
(3) The commission shall additionally establish action timelines,
adopt standards for how to prioritize installation of automatic
shutoff or remote controlled sectionalized block valves pursuant to
paragraph (1), ensure that remote and automatic shutoff valves are
installed as quickly as is reasonably possible, and establish ongoing
procedures for monitoring progress in achieving the requirements of
this section.
(b) The commission shall authorize recovery in rates for all
reasonably incurred costs incurred for implementation of the
requirements of this section.
(c) The commission, in consultation with the Pipeline and
Hazardous Materials Safety Administration of the United States
Department of Transportation, shall adopt and enforce compatible
safety standards for commission-regulated gas pipeline facilities
that the commission determines should be adopted to implement the
requirements of this section.
SEC. 3. Section 958 is added to the Public Utilities Code, to
read:
958. (a) Each gas corporation shall prepare and submit to the
commission a proposed comprehensive pressure testing implementation
plan for all intrastate transmission lines to either pressure test
those lines or to replace all segments of intrastate transmission
lines that were not pressure tested or that lack sufficient details
related to performance of pressure testing. The comprehensive
pressure testing implementation plan shall provide for testing or
replacing all intrastate transmission lines as soon as practicable.
The comprehensive pressure testing implementation plan shall set
forth criteria on which pipeline segments were identified for
replacement instead of pressure testing.
(b) The comprehensive pressure testing implementation plan shall
include a timeline for completion that is as soon as practicable, and
includes interim safety enhancement measures, including increased
patrols and leak surveys, pressure reductions, prioritization of
pressure testing for critical pipelines that must run at or near
maximum allowable operating pressure values that result in hoop
stress levels at or above 30 percent of specified minimum yield
stress, and any other measure that the commission determines will
enhance public safety during the implementation period.
Engineering-based assumptions may be used to determine maximum
allowable operating pressure in the absence of complete records, but
only as an interim measure until such time as all the lines have been
tested or replaced, in order to allow the gas system to continue to
operate.
(c) At the completion of the implementation period, all California
natural gas intrastate transmission line segments shall meet all of
the following:
(1) Have been pressure tested.
(2) Have traceable, verifiable, and complete records readily
available.
(3) Where warranted, be capable of accommodating in-line
inspection devices.
SEC. 4. Section 958.5 is added to the Public Utilities Code, to
read:
958.5. (a) Twice a year, or as determined by the commission, each
gas corporation shall file with the commission's consumer protection
safety division a gas transmission and storage safety report. The
consumer protection safety division shall review the reports to
monitor each gas corporation's storage and pipeline-related
activities to assess whether the projects that have been identified
as high risk are being carried out, and to track whether the gas
corporation is spending its allocated funds on these storage and
pipeline-related safety, reliability, and integrity activities for
which they have received approval from the commission.
(b) The gas transmission and storage safety report shall include a
thorough description and explanation of the strategic planning and
decisionmaking approach used to determine and rank the gas storage
projects, intrastate transmission line safety, integrity, and
reliability, operation and maintenance activities, and inspections of
its intrastate transmission lines. If there has been no change in
the gas corporation's approach for determining and ranking which
projects and activities are prioritized since the previous gas
transmission and storage safety report, the subsequent report may
reference the immediately preceding report.
(c) If the commission's consumer protection safety division
determines that there is a deficiency in a gas corporation's
prioritization or administration of the storage or pipeline capital
projects or operation and maintenance activities, the division shall
bring the problems to the commission's immediate attention.
SEC. 5. Section 959 is added to the Public Utilities Code, to
read:
959. (a) A gas corporation shall not recover any fine or penalty
in any rate approved by the commission.
(b) Each gas corporation shall demonstrate to the satisfaction of
the commission, in its general rate case proceeding, that the
requested revenue requirements will be sufficient to enable the gas
corporation to fund those projects and activities necessary to
maintain safe and reliable service and to meet federal and state
safety requirements applicable to its gas plant, in a cost-effective
manner.
SEC. 6. Section 969 is added to the Public Utilities Code, to
read:
969. In any ratemaking proceeding in which the commission
authorizes a gas corporation to recover expenses for the gas
corporation's transmission pipeline integrity management program
established pursuant to Subpart O (commencing with Section 192.901)
of Part 192 of Title 49 of the United States Code or related capital
expenditures for the maintenance and repair of transmission
pipelines, the commission shall require the gas corporation to
establish and maintain a balancing account for the recovery of those
expenses. Any unspent moneys in the balancing account in the form of
an accumulated account balance at the end of each rate case cycle,
plus interest, shall be returned to ratepayers through a true-up
filing. Nothing in this section is intended to interfere with the
commission's discretion to establish a two-way balancing account.
SEC. 7. Section 6 of this bill shall not become operative if this
bill and Senate Bill 879 are both enacted and become effective on or
before January 1, 2012, and Senate Bill 879 adds Section 969 to the
Public Utilities Code.
SEC. 8. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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 XIII B of the California
Constitution.