Bill Text: CA SB1371 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Natural gas: leakage abatement.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2014-09-21 - Chaptered by Secretary of State. Chapter 525, Statutes of 2014. [SB1371 Detail]

Download: California-2013-SB1371-Amended.html

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BILL NUMBER: SB 1371	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 18, 2014
	AMENDED IN ASSEMBLY  JUNE 10, 2014
	AMENDED IN SENATE  MAY 27, 2014
	AMENDED IN SENATE  MAY 7, 2014
	AMENDED IN SENATE  APRIL 10, 2014
	AMENDED IN SENATE  MARCH 25, 2014

INTRODUCED BY   Senator Leno
   (Principal coauthor: Assembly Member Mullin)
   (Coauthor: Senator Hill)

                        FEBRUARY 21, 2014

   An act to add Article 3 (commencing with Section 975) to Chapter
4.5 of Part 1 of Division 1 of the Public Utilities Code, relating to
natural gas.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1371, as amended, Leno. Natural gas: leakage abatement.
   The California Constitution establishes the Public Utilities
Commission with regulatory authority over public utilities,
authorizes the commission to establish its own procedures, subject to
statutory limitations or directions and constitutional requirements
of due process, and authorizes the commission to fix rates and
establish rules for all public utilities, subject to control by the
Legislature.
   The Natural Gas Pipeline Safety Act of 2011, within the Public
Utilities Act, designates the commission as the state authority
responsible for regulating and enforcing intrastate gas pipeline
transportation and pipeline facilities pursuant to federal law,
including the development, submission, and administration of a state
pipeline safety program certification for natural gas pipelines.
   The California Global Warming Solutions Act of 2006 requires the
State Air Resources Board to adopt regulations to require the
reporting and verification of emissions of greenhouse gases and to
monitor and enforce compliance with the reporting and verification
program, and requires the state board to adopt a statewide greenhouse
gas emissions limit equivalent to the statewide greenhouse gas
emissions level in 1990, to be achieved by 2020.
   This bill would require the commission to adopt rules and
procedures governing the operation, maintenance, repair, and
replacement of those commission-regulated gas pipeline facilities
that are intrastate transmission and distribution lines to minimize
leaks as a hazard to be mitigated pursuant to the Natural Gas
Pipeline Safety Act of 2011 and to reduce emissions of natural gas
from those facilities to the maximum extent feasible in order to
advance the state's goals in reducing emissions of greenhouse gases
pursuant to the California Global Warming Solutions Act of 2006. The
bill would require the commission to commence a proceeding by January
15, 2015, to adopt those rules and procedures. The bill would
require the commission to consult with the state board, the gas
corporation's workforce, and those other state and federal entities
that the commission determines have regulatory roles of 
relevance.   relevance to ensure that the rules and
procedures it adopts are not inconsistent with the regulations and
procedures adopted by those agencies.  The bill would require
that the rules and procedures  (1)  provide for the maximum
technologically feasible and cost-effective avoidance, reduction, and
repair of leaks and leaking components in those commission-regulated
gas pipeline facilities that are intrastate transmission and
distribution lines within a reasonable time after  discovery.
The bill would require the rules and procedures to provide for the
ranking and prioritization of recorded leaks and leaking components
by volume or energy content. The bill would require that the rules
and procedures   discovery, (2) provide for the repair
of leaks as soon as reasonably possible after discovery, consistent
with established safety requirements and the goals of reducing air
pollution and the climate change impacts of methane emissions, (3)
 evaluate the operations, maintenance, and repair practices for
those facilities to determine whether existing practices are
effective at achieving the goals of the bill and to determine whether
alternative practices may be more effective at achieving the goals
of the  bill. The bill would require that the rules and
procedures   bill, (4)  establish and require the
use of best practices for leak surveys, patrols, leak survey
technology, leak prevention, and leak  reduction. The bill
would require the rules and procedures to   reduction,
(5)  establish protocols and procedures for the development and
use of metrics to quantify the volume of emissions from leaking
 components,   components not inconsistent with
the protocols and procedures utilized in mandatory reporting to state
and federal air quality agencies,  and for evaluating and
tracking leaks, both geographically and over time, so that operators,
the commission, and the public have accurate information about the
number and severity of leaks and about the quantity of gas that is
emitted to the atmosphere over  time. The bill would require
that the rules and procedures,   time, and (6)  to
the extent feasible, require the owner of each commission-regulated
gas pipeline facility that is an intrastate transmission or
distribution line to calculate and report to the commission a
baseline systemwide leak rate, to periodically update that systemwide
leak rate calculation, and to annually report measures that will be
taken in the following year to reduce the systemwide leak rate to
achieve the goals of the bill. The bill would require that the
commission consider specified topics in a manner consistent with the
commission's existing ratemaking procedures and authority to
establish just and reasonable rates.
   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.  The Legislature finds and declares all of the
following:
   (a) The Legislature has established that safety of the natural gas
pipeline infrastructure in California is a priority for the Public
Utilities Commission and gas corporations, and nothing in this
article shall compromise or deprioritize safety as a top
consideration.
   (b) It is undisputed that natural gas pipelines and infrastructure
in California leak natural gas. The incidence of natural gas leaks
and their repair is considered by the industry and regulators to be a
significant indicator of pipeline integrity and safety.
   (c) The Legislature has established a policy goal to significantly
reduce emissions of greenhouse gases in California.
   (d) There is a growing awareness of the potency of methane, the
primary component of natural gas, as a greenhouse gas. The
Intergovernmental Panel on Climate Change estimates that the global
warming potential of methane is 28 times that of carbon dioxide over
a 100-year time horizon and 84 times that of carbon dioxide over a
20-year time horizon. There is also a growing awareness that climate
change impacts impose high social costs, including impacts upon the
public health and economy.
   (e) Reducing methane emissions by promptly and effectively
repairing or replacing the pipes and associated infrastructure that
is responsible for these leaks advances both policy goals of natural
gas pipeline safety and integrity and reducing emissions of
greenhouse gases.
   (f) Existing federal and state rules and regulations pertaining to
the natural gas transmission and distribution system and associated
infrastructure were not developed for the purpose of preventing the
climate change impacts from leaks of natural gas.
   (g) Examining the methods used by gas corporations under existing
federal and state rules to conduct and schedule leak repair and
prevention based on the implications of these practices with respect
to emissions of greenhouse  gases   gases, in
addition to safety,  will enable a more thorough evaluation of
whether existing practices are commensurate with California's goals
for reducing emissions of greenhouse gases.
   (h) Reducing leaks and repairing pipelines and associated
infrastructure in California provides significant employment
opportunities for California residents and for domestic fabricators
of high quality pipeline materials and other equipment associated
with finding and fixing leaks.
   (i) Providing just and reasonable rate revenues for gas
corporations to find, categorize, and repair leaks promptly when
discovered, including employing an adequate workforce, is in the
public interest, and promotes the interests of customers and the
public.
  SEC. 2.  Article 3 (commencing with Section 975) is added to
Chapter 4.5 of Part 1 of Division 1 of the Public Utilities Code, to
read:

      Article 3.  Methane Leakage Abatement


   975.  (a) For purposes of this chapter, "commission-regulated gas
pipeline facility" has the same meaning as defined in Section 950.
   (b) The commission shall adopt rules and procedures governing the
operation, maintenance, repair, and replacement of those
commission-regulated gas pipeline facilities that are intrastate
transmission and distribution lines, as described in paragraphs (1)
and (2) of subdivision (a) of Section 950, to achieve both of the
following:
   (1) Minimize leaks as a hazard to be mitigated pursuant to
paragraph (1) of subdivision (d) of Section 961.
   (2) While giving due consideration to the cost considerations of
Section 977, reduce emissions of natural gas from those
commission-regulated gas pipeline facilities that are intrastate
transmission and distribution lines to the maximum extent feasible in
order to advance the state's goals in reducing emissions of
greenhouse gases pursuant to the California Global Warming Solutions
Act of 2006 (Division 25.5 (commencing with Section 38500) of the
Health and Safety Code).
   (c) Not later than January 15, 2015, the commission shall commence
a proceeding to adopt rules and procedures for those
commission-regulated pipeline facilities that are intrastate
transmission and distribution lines, as respectively described in
paragraphs (1) and (2) of subdivision (a) of Section 950, to achieve
the goals of subdivision (b).
   (d) In developing the rules and procedures pursuant to subdivision
(c), the commission shall consult with the State Air Resources
Board, the gas corporation's workforce, and those other state and
federal entities that the commission determines have regulatory roles
of  relevance.   relevance,   to
ensure that the rules and procedures it adopts are not inconsistent
with regulations and procedures adopted by those agencies. 
   (e) The rules and procedures adopted pursuant to subdivision (c)
shall accomplish all of the following:
   (1) Provide for the maximum technologically feasible and
cost-effective avoidance, reduction, and repair of leaks and leaking
components in those commission-regulated gas pipeline facilities that
are intrastate transmission and distribution lines within a
reasonable time after discovery, consistent with the California
Global Warming Solutions Act of 2006 (Division 25.5 (commencing with
Section 38500) of the Health and Safety Code) to achieve the goals in
subdivision (b).
   (2) Provide for the repair of leaks as soon as reasonably possible
after discovery, consistent with    established safety
requirements and  the goals of reducing air pollution and the
climate change impacts of methane emissions. 
   (3) Provide for the ranking and prioritization of recorded leaks
and leaking components by volume or energy content. 

   (4) 
    (   3)  Evaluate the operations, maintenance,
and repair practices of those commission-regulated gas pipeline
facilities that are intrastate transmission and distribution lines to
determine whether existing practices are effective at achieving the
goals of subdivision (b) and determine whether alternative practices
may be more effective at achieving the goals of subdivision (b).

   (5) 
    (4)  Establish and require the use of best practices for
leak surveys, patrols, leak survey technology, leak prevention, and
leak reduction. The commission shall consider in the development of
best practices the quality of materials and equipment from various
sources, including foreign and domestic third-party suppliers. 
  Collected leak data shall remain the property of the
utility and shall be available to the commission and parties in
commission proceedings as determined by the commission. 

   (6) 
    (5)  Establish protocols and procedures for the
development and use of metrics to quantify the volume of emissions
from leaking  components,   components not
inconsistent with the protocols and procedures utilized in mandatory
reporting to state and federal air quality agencies,  and for
evaluating and tracking leaks, both geographically and over time, so
that operators, the commission, and the public have accurate
information about the number and severity of leaks and about the
quantity of natural gas that is emitted into the atmosphere over
time. 
   (7) 
    (   6)  To the extent feasible, require the
owner of each commission-regulated gas pipeline facility that is an
intrastate transmission or distribution line to calculate and report
to the commission a baseline systemwide leak rate, along with any
data and computer models used in making that calculation, to
periodically update that systemwide leak rate calculation, and to
annually report on measures that will be taken in the following year
to reduce the systemwide leak rate to achieve the goals of
subdivision (b).
   (f) The rules and procedures, including best practices and repair
standards, shall be incorporated into the safety plans required by
Section 961.
   (g) Consistent with subdivision (e) of Section 961, the commission
shall facilitate robust ongoing participation of the workforce of
gas corporations and those state and federal entities that have
regulatory roles of relevance in all aspects of the proceeding.
Nothing in this section affects the commission's authority to
determine eligibility for intervenor compensation.
   977.  Consistent with the commission's existing ratemaking
procedures and authority to establish just and reasonable rates, the
commission shall consider all of the following:
   (a) Providing an adequate workforce to achieve the objectives of
reducing hazards and emissions from leaks, including leak avoidance,
reduction, and repair. 
   (b) Directing the revenues from any allowance for lost or
unaccounted for natural gas to leak avoidance, reduction, and repair.
 
   (b) Providing revenues for all activities identified and required
pursuant to Section 976, including any adjustment of allowance for
lost and unaccounted for gas related to actual leakage volumes. 

   (c) Providing guidance for treatment of expenditures as being
either an item of expense or a capital investment.
   (d) The impact on affordability of gas service for vulnerable
customers as a result of the incremental costs of compliance with the
adopted rules and procedures.
   (e) The social and public costs associated with climate change and
air pollution, including peer-reviewed estimates of the social costs
of emissions of greenhouse gases.
  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.