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

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

---

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

---

BILL NUMBER: SB 1371	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 22, 2014
	AMENDED IN ASSEMBLY  JULY 1, 2014
	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 act requires each gas corporation to develop a plan, as
specified, for the safe and reliable operation of its
commission-regulated gas pipeline facility, as defined. The act
requires the commission to accept, modify, or reject the plan for
each gas corporation by December 31, 2012, and to build into an
approved plan sufficient flexibility to redirect activities to
respond to safety requirements. The act   requires that the
plan be periodically reviewed and updated. 
   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, giving priority to safety,
reliability, and affordability of service, 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  , consistent with specified federal
regulations, and a specified order of the commission,  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 require gas corporations to file a report as soon as
practicable, that includes a summary of utility leak management
practices, a list of new methane leaks in 2013 by grade, a list of
open leaks that are being monitored or are scheduled to be repaired,
and a best estimate of gas loss due to leaks.  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 to ensure
that the rules and procedures it adopts are not inconsistent with the
regulations and procedures adopted by those agencies.  
procedures,   in consultation with the State Air Resources
Board.  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, (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   reducing methane leaks and promoting public
safety, achieve  the goals of the  bill and to determine
  bill, and  whether alternative practices may be
more effective at achieving the goals of the bill, (4) establish and
require the use of best practices for leak surveys, patrols, leak
survey technology, leak prevention, and leak reduction, (5) establish
protocols and procedures for the development and use of metrics to
quantify the volume of emissions from leaking  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   gas pipeline facilities, and   for
evaluating and tracking leaks geographically and over time that may
be incorporated into a gas corporation's plan for the safe and
reliable operation of its commission-regulated gas pipeline facility,
or into other state emissions tracking systems, or both, including
regulations of the State Air Resources Board for the reporting of
greenhouse gases, with the requirement that the metrics  
provide  operators, the commission, and the public  have
  with  accurate information about the number and
severity of leaks and about the quantity of gas that is emitted to
the atmosphere over 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  and the State Air Resources Board  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. In order to achieve transparency and
accountability for rate revenues and best value for ratepayers, 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, 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) With priority given to safety, reliability, and affordability
of service, 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. 
 961, consistent with the requirements of Section 192.703(c) of
Subpart M of Title 49  of the Code of Federal Regulations,
the commission's General Order 112-E, and their successors. 
   (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) As soon as practicable, the commission shall require gas
corporations to file a report that includes, but is not limited to,
all of the following:  
   (1) A summary of utility leak management practices.  
   (2) A list of new methane leaks in 2013 by grade.  
   (3) A list of open leaks that are being monitored or are scheduled
to be repaired.  
   (4) A best estimate of gas loss due to leaks.  
   (c) 
    (d)  Not later than January 15, 2015, the commission
 , in consultation with the State Air Resources Board, 
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, 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)   (d)  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) 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  
reducing methane leaks and promoting public safety, consistent with
Section 961,   achieve  the goals of subdivision
 (b) and determine   (b), and  whether
alternative practices may be more effective at achieving the goals of
subdivision (b).
   (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.   equipment.  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.   commission or specified by
statute. 
   (5) Establish protocols and procedures for the development and use
of metrics to quantify the volume of emissions from leaking 
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   gas pipeline facilities, and
for evaluating and tracking leaks geographically and over time, that
may be incorporated into the plans required by Section 961, or into
other state emissions tracking s   ystems, or both,
including the regulations for the reporting of greenhouse gases of
the State Air Resources Board. The quantification of emissions shall
provide  operators, the commission, and the public  have
  with  accurate information about the number and
severity of leaks and about the quantity of natural gas that is
emitted into the atmosphere over time.
   (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  and the State Air Resources Board  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.   961 and the  
applicable general orders adopted by the commission. 
   (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.   proceeding to ensure that the rules and
procedures it adopts are not inconsistent with the regulations and
procedures adopted by those agencies.  Nothing in this section
affects the commission's authority to determine eligibility for
intervenor compensation. 
   (h) Nothing in this article shall affect or shall be interpreted
to affect the existing authority of the State Air Resources Board to
adopt rules and regulations to achieve the maximum technologically
feasible and cost-effective greenhouse gas emission reductions and to
maintain and continue emission reductions under the California
Global Warming Solutions Act of 2006 (Division 25.5 (commencing with
Section 38500) of the Health and Safety Code). 
   977.  In order to achieve transparency and accountability for rate
revenues and best value for ratepayers, and 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) Providing revenues for all activities identified and required
pursuant to Section 975, 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.
   978.  Except as expressly so provided, this article does not
expand or in any manner alter the commission's jurisdiction over the
regulation 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.