Bill Increasing Gas Pipeline Safety Advances

By Published On: March 25, 2011

Legislation increasing state regulatory oversight of in-state natural gas pipelines and prohibiting the use of ratepayer funds to cover penalties arising from gas accidents, passed the Assembly Utilities & Communications Committee March 21. On a 9-0 vote, AB 56 by Democratic Asssemblymember Jerry Hill, whose district includes San Bruno--the site of last September’s gas explosion--advanced in spite of concerns that it may cause investor-owned utilities to over-insure and drive up ratepayers’ costs. The legislation is “to ensure the lessons of the San Bruno tragedy are well learned and not repeated,” insisted Hill. AB 56 won ratepayer advocates’ support, as well as that of the California Public Utilities Commission and Pacific Gas & Electric. The utility is under federal investigation for a pipe blast that killed eight and destroyed 38 homes. San Diego Gas & Electric opposed the bill. “This bill speaks directly to a number of concerns and addresses them in a fair manner,” said Lenny Goldberg, The Utility Reform Network lobbyist. PG&E raised concerns about the measure creating “legislative ratemaking.” The utility asserted that AB 56 could result in lawmakers, not the CPUC, setting utility rates. In spite of their 9-0 vote, committee members warned the bill directs an increase in regulatory oversight before state and federal investigative bodies have released pipeline safety recommendations. Hill pointed out that the ongoing investigations “revealed serious flaws” in existing regulations, but he also agreed to rework his bill to address concerns. A key issue in the ongoing investigation of the blast is whether PG&E’s pressure spikes in the aging pipeline exceeded regulatory safety margins AB 56, which is to be amended and likely reheard by the Assembly utilities committee, also does the following: -Requires the CPUC to develop pipeline safety standards; -Mandates the CPUC ensure that ratepayer funds approved for pipeline infrastructure repairs are spent on designated pipes; -Mandates PG&E and other investor-owned utilities to provide local and state emergency crews information; -Directs the CPUC to submit regular reports on infrastructure repairs and upgrades; and -Requires utilities to complete an infrastructure modernization plan by 2022. Next, the bill is to be heard in the Assembly Appropriations Committee. The day after the hearing on AB 56, California’s U.S. Senators released a letter insisting the federal Pipeline and Hazardous Materials Safety Administration require the reporting of pressure spikes in gas lines. In the March 16 letter, Democratic Senators Dianne Feinstein and Barbara Boxer asked pipeline administrator Cynthia Quarterman “to resolve statutory weaknesses” in federal pipeline safety law. They asked her specifically to close a “regulator loophole that permits transmission pipeline operators to exceed the Maximum Allowable Operating Pressure on a pipeline without reporting this behavior or suffering any repercussion for this unsafe action.”

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