In All, 13 Related Hill Bills on Safety, Ethics and Ratepayer Relief Have Been Signed into Law Since the Deadly 2010 Blast
SACRAMENTO – Six bills by Senator Jerry Hill that grew out of the fatal Pacific Gas & Electric Co. gas pipeline explosion in San Bruno were signed into law by the governor this week, bringing to 13 the number of blast-related safety, ethics and ratepayer relief measures the Peninsula Democrat has authored in the four years since the 2010 blast that killed eight people and destroyed 38 homes.
Additionally, Senator Hill has announced his intention to introduce legislation in December to require that the bulk of the penalty against PG&E for the San Bruno explosion—a sum now slated to go to the General Fund—go instead toward safety improvements, the creation of a pipeline safety trust to advocate for pipeline safety before the CPUC and federal government, and an independent monitor to track PG&E’s pipeline safety expenditures.
The following bills, signed into law on Thursday, take effect on January 1, 2015:
Last year’s Resources Budget Trailer Bill prohibited members of the California Public Utilities Commission (CPUC) from sitting on nonprofits they helped create as commissioners, if those nonprofits were created before January 1, 2014. Senate Bill 434 is a cleanup bill that applies the prohibition to any nonprofits that may be created in the future.
Preserves due process in CPUC penalty proceedings by dictating that CPUC staff may serve in an advocate role or in an advisory role, but not both concurrently. In June 2013 the General Counsel of the CPUC dismissed all of the attorneys prosecuting PG&E because they argued that it was illegal and unethical to advocate that PG&E should not be penalized. While an ethical separation of roles is already the general practice at the CPUC, agency guidelines allow this practice to be waived whenever convenient.
Requires the CPUC to adopt physical security rules to protect electric facilities. On April 16, 2013, a coordinated attack by snipers on PG&E’s Metcalf substation south of San Jose knocked out 17 giant transformers. Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission at the time, called the attack “the most significant incident of domestic terrorism involving the grid that has ever occurred” in the United States. More than a year later, no one has been arrested or charged in the attack. This August, the substation’s defenses were penetrated again, this time by thieves who cut a hole in the fence and made off with construction equipment. The theft went unnoticed for five hours.
Requires the California Public Utilities Commission to use safety performance information in the general rate cases of natural gas and electricity companies. Requires the CPUC to consider safety in proceedings generically. The CPUC is currently engaged in rulemaking on safety in rate cases, which in large part has been satisfactory, but the CPUC has been focused on the utilities reporting their risks and has not yet committed to reviewing their safety performance. The CPUC has, for several years, claimed that it considers safety in every proceeding. Hill’s subcommittee report, “Slow Progress in Safety Regulation: Improving Priorities and Safety Plans of the California Public Utilities Commission,” found this not to be the case.
Applies the provisions of AB 578 (2012) to rail safety, requiring the CPUC to review and adopt recommendations made to it by the National Transportation Safety Board (NTSB) regarding rail safety. On September 5, 2013, a rail car on the Angel’s Flight Railwayin the Bunker Hill district of Los Angeles derailed, leading to a dangerous rescue of the rail car’s occupantsthat was precarious for both the passengers and the firefighterwho came to their aid. There were no safety ropes, railing, or walkway to prevent them from falling to the concrete 25 feet below. NTSB had investigated a fatal collision of Angels Flight in 2001 and recommended that a guide way be constructed alongside to facilitate safe evacuation. The CPUC did not take this advice, nor did it bring the question before the full Commission. Safety recommendations of the NTSB are too important for the CPUC to ignore.
Requires the commission to publish in its annual report a succinct description of each staff safety investigation pending before the commission or concluded during the prior calendar year. The description shall include the month of the accident, the reason for the investigation, the facility type involved, and the owner of the facility.
Senator Hill’s October 2013 subcommittee report, “Slow Progress in Safety Regulation: Improving Priorities and Safety Plans of the California Public Utilities Commission,” found that the Commission had dragged its feet in investigating fatal electrocutions, finishing investigations in the deaths of a San Mateo man when a power line fell in his front yard after nearly two years and releasing the investigation of three San Bernardino residents electrocuted when another power line fell in their backyard after more than three years.
Below is a list of Hill’s other explosion-related bills signed since 2010:
Requires the California Public Utilities Commission to develop a safety enforcement program for gas and electric violations. Following National Transportation Safety Board and Independent Review Panel recommendations, the CPUC has allowed staff to cite utilities for gas safety violations, but the CPUC has not developed a program to improve safety using this increased staff authority. This bill also requires the CPUC to extend this staff authority to electric safety violations. Roughly 13 people a year are killed at high-voltage electric facilities, but before this year the CPUC had not opened enforcement actions against utilities for electrical violations of anything short of a massive wildfire.
Requires the California Public Utilities Commission to act on gas safety recommendations by the National Transportation Safety Board (NTSB). Before the San Bruno explosion in 2010, the NTSB had repeatedly recommended the installation of emergency shutoff valves, which might have shut off the gas to the fire in as few as five to 15 minutes instead of the 90 minutes it took PG&E to manually close the valves. Also, the autumn 2011 the explosion of a Cupertino condominium and a seven-hour fire in an intersection in Roseville were caused by a type of pipe that killed forty people in the 1990s and about which the NTSB had made recommendations that the CPUC never acted on.
Requires the California Public Utilities Commission to determine the appropriate ratemaking treatment of bonus compensation for utility executives based on the utility’s stock price or financial performance. Utilities are not typical corporations. They cannot increase their profit by increasing market share or selling more product. They cannot raise their revenue as the total amount they are able to recover in rates is set by the CPUC. The only way a public utility can increase its profit is by cutting its operations and maintenance costs, as has been clearly demonstrated by PG&E in the years leading up to the San Bruno explosion.
Requires the California Public Utilities Commission to develop measures and standards for gas safety. The CPUC’s own Independent Review Panel criticized the CPUC for not monitoring and enforcing safety performance at PG&E prior to the San Bruno explosion. This bill would require the CPUC to determine what constitutes safe operation and give it the ability to assess penalties against utilities for poor performance.
Exempts San Bruno disaster victims from paying state taxes on any financial compensation they received in the wake of the disaster.
Holds utilities and regulators more accountable for inspections and repairs to California’s aging pipeline infrastructure. Contains several reforms including:
- Requires natural gas corporations to develop and submit to the CPUC a plan for the comprehensive testing of the operator’s natural gas transmission system to ensure safety.
- Requires natural gas corporations to report annually to the CPUC on safety issues.
- Requires a gas corporation to demonstrate in its general rate case that the revenues requested will be sufficient to maintain safe and reliable service in a cost-effective manner.
- Prohibits a gas corporation from recovering any fine or penalty in rates.
- Requires natural gas corporations to meet annually with local fire departments to review emergency response plans.
- Requires the CPUC to require natural gas corporations to install automatic or remote-controlled shut off valves on natural gas pipelines in areas of high population density or which cross active seismic faults, if the valves are necessary to protect public safety.
- Requires the CPUC to establish “balancing accounts” to ensure that funds given to a gas corporation for safety projects are used properly.
Provides tax relief to victims of San Bruno disaster. Allows homeowners who had qualified for a $7,000 state property tax exemption to still receive that write-off even if their home was destroyed as a result of the September 9, 2010,gas pipe explosion. Also provides assistance to the city of San Bruno, local schools and San Mateo County by requiring the state to backfill first-year local revenue losses resulting from downward reassessment of taxpayers affected by the disaster.