BILL NUMBER: AB 56INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Hill DECEMBER 6, 2010 An act to add Sections 726 and 770.5 to the Public Utilities Code, relating to public utilities. LEGISLATIVE COUNSEL'S DIGEST AB 56, as introduced, Hill. Public utilities: fines and penalties: intrastate pipeline safety. Under existing law, the Public Utilities Commission has regulatory authority over public utilities. 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 public utility from recovering any fine or penalty in any rate approved by the commission. 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, as defined. 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 designate the commission as the state authority responsible for development, submission, and administration of a state pipeline safety program certification for natural gas pipelines. The bill would require the commission to adopt and enforce compatible safety standards, as defined, for commission-regulated gas pipeline facilities, as defined, to accomplish specified results. The bill would require the commission to track proposed repairs for which a gas corporation requested compensation in any rate request that was granted by the commission in order to determine if the repairs are made and to require any gas corporation that fails to make repairs for which the commission granted recovery in rates to promptly make a public filing as to the justification for failing to make the approved repairs. The bill would prohibit a gas corporation from recovering in rates any uninsured expense resulting from a fire, explosion, or other catastrophic event involving a commission-regulated gas pipeline facility that resulted from negligence by the utility. 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. 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 726 is added to the Public Utilities Code, to read: 726. A public utility shall not recover any fine or penalty in any rate approved by the commission. SEC. 2. Section 770.5 is added to the Public Utilities Code, to read: 770.5. (a) For purposes of this section the following terms have the following meanings: (1) "Commission-regulated gas pipeline facility" means an intrastate gas pipeline facility, as defined in Section 60101 of Title 49 of the United States Code, that transports natural gas and is subject to the regulatory authority of the commission, including a pipeline that the commission, pursuant to subsection (c) of Section 717 of Title 15 of the United States Code, has certified to the Federal Energy Regulatory Commission as being subject to the regulatory jurisdiction of the commission over rates and service. "Commission-regulated gas pipeline facility" does not include those pipelines that are excluded from regulation by the Federal Energy Regulatory Commission pursuant to subsection (b) of Section 717 of Title 15 of the United States Code because they are facilities used for the distribution of natural gas. (2) "Compatible safety standards" means additional or more stringent safety standards for commission-regulated gas pipeline facilities that are compatible with the minimum safety standards adopted by the Department of Transportation pursuant to Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title 49 of the United States Code and which the commission is authorized to adopt pursuant to subsection (c) of Section 60104 of that chapter. (b) The commission shall be the state authority responsible for the development, submission, and administration of a state pipeline safety program certification for natural gas pipelines pursuant to Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title 49 of the United States Code. (c) The commission shall adopt and enforce compatible safety standards for commission-regulated gas pipeline facilities to accomplish all of the following: (1) Require the owner or operator to make an annual performance measure report to the commission concerning all commission-regulated gas pipeline facilities. The performance measure report shall include the total number of anomalies identified as a result of safety assessments, the total number of conditions repaired, and the actual anomalies identified by the pipeline owner or operator during the inspections and the conditions requiring repair. The annual performance measure reports shall be made publicly available to the extent that doing so does not create a public safety risk. The commission shall consult with the federal Department of Homeland Security in determining what information may be made available without creating a public safety risk. (2) Require the owner or operator to evaluate the integrity of all commission-regulated gas pipeline facilities outside high consequence areas and to include this evaluation as part of their safety assessment reports. (3) Require the owner or operator of commission-regulated gas pipeline facilities to develop and to implement, by January 1, 2012, a continuing public education program pursuant to Section 60116 of Title 49 of the United States Code. The owner or operator, to the extent that doing so does not create a public safety risk, shall provide detailed, customized information on pipeline locations and emergency response plans, as well as enhanced annual emergency response training. (4) Require the owner or operator of commission-regulated gas pipeline facilities to provide information regarding the pipeline system to state and local emergency responders, including the business name, address, and emergency contact information of whom to contact if an event occurs, accurate maps of facility locations, the owner or operator's emergency response, plan and any other information the commission determines should be supplied to state and local emergency responders. (5) Require the owner or operator of commission-regulated gas pipeline facilities to conduct outreach and public education relative to excavation dangers and the availability of the one-call notification program in order to reduce dangerous incidences caused by third-party excavations. (6) Require the owner or operator of commission-regulated gas pipeline facilities to prioritize those facilities that, because of their proximity to seismic active areas, should be subject to the highest level of safety oversight. (7) Require the owner or operator of commission-regulated gas pipeline facilities to comply with minimum standards established by the commission, in consultation with the independent review panel investigating the San Bruno natural gas pipeline explosion of 2010, to install automatic or remote shutoff valves, unless technically unfeasible, according to the following timelines: (A) On all new commission-regulated gas pipeline facilities or any facility being replaced beginning January 1, 2012. (B) On all facilities within 10 miles of a high-risk seismic fault by January 1, 2014. (C) On all facilities within 10 miles of a Class 3 or Class 4 high consequence area by January 1, 2017. (8) Require the owner or operator of commission-regulated gas pipeline facilities to operate those facilities at safe pressure if the facility cannot be inspected using the most effective inspection technology. (9) Require owners and operators of commission-regulated gas pipeline facilities to complete, by January 1, 2022, a modernization program to upgrade key facilities located in heavily populated and other critical areas. The commission shall consult with owners and operators and interested stakeholders in developing the program requirements and schedule. The program shall contain criteria for prioritizing critical gas pipeline facilities and ensure that all upgraded facilities can accommodate state of the art inspections, including internal corrosion inspection methods. (d) The commission shall adopt and enforce a one-call notification program for the state consistent with the requirements adopted by the Department of Transportation pursuant to Chapter 601 (commencing with Section 60101) of Subtitle VIII of Title 49 of the United States Code. (e) The commission shall track proposed repairs for which a gas corporation requested compensation in any rate request that was granted by the commission in order to determine if the repairs are made. The commission shall require any gas corporation that fails to make repairs for which the commission granted recovery in rates to promptly make a public filing as to the justification for failing to make the approved repairs. (f) A gas corporation shall not recover in rates any uninsured expense resulting from a fire, explosion, or other catastrophic event involving a commission-regulated gas pipeline facility that resulted from negligence by the utility. SEC. 3. 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.