BILL NUMBER: AB 1456INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Hill JANUARY 9, 2012 An act to add Section 960 to the Public Utilities Code, relating to gas corporations. LEGISLATIVE COUNSEL'S DIGEST AB 1456, as introduced, Hill. Gas corporations: rate of return: safety. 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. Existing law, the Natural Gas Pipeline Safety Act of 2011, among other things, prohibits a gas corporation from recovering any fine or penalty in any rate approved by the commission. This bill would require the commission to consider the safety performance of a gas corporation in determining what constitutes a just and reasonable rate of return. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares as follows: (a) On September 9, 2010, a 30-inch natural gas transmission pipeline ruptured in San Bruno, California, killing eight people, hospitalizing more than 50 people, and destroying 38 homes. (b) On September 23, 2010, the Public Utilities Commission created an independent review panel of experts to investigate both the practices of the pipeline operator and of the commission to ensure that such an accident would not be repeated elsewhere in the state. (c) On June 9, 2011, the panel presented its findings and found that the financial focus of the pipeline operator's management had been detrimental to system safety. (d) The panel suggested that rate incentives and penalties be applied to gas corporations based on the achievement of specified levels of performance. SEC. 2. Section 960 is added to the Public Utilities Code, to read: 960. The commission shall consider the safety performance of a gas corporation in determining what constitutes a just and reasonable rate of return.