Hill's Pipeline Safety Bill Clears First Hurdle

State Assemblyman Jerry Hill’s gas pipeline safety bill, which looks to strengthen pipeline safety rules and force utilities and regulators to be more accountable, passed its first legislative hurdle today.

With a 9-0 vote by the state Assembly Committee on Utilities and Commerce, the bill, , will now be considered by the Assembly Committee on Appropriations, one of the many steps the legislation faces as Hill seeks to make unprecedented pipeline safety reform in the state.

Among the changes the legislation seeks would be to require the California Public Utilities Commission to track repairs on pipelines after utilities propose rate increases. If the money is diverted to a different project, according to the bill, the utility would be required to make a public filing justifying the change.

In 2007, PG&E requested and was allowed to levy rate increases on customers to pay for the $5 million replacement of a . Instead, the utility delayed replacing the pipeline segment while charging customers for the repair. On Sept. 9, Line 132 exploded near Earl Avenue and Glenview Drive, leaving eight people dead and 38 homes destroyed.

“This is a problem that must be addressed,” Hill, D-San Mateo, said in a news release.  “We need to do a better job of following the money, particularly in those instances when a project is approved by the PUC and ratepayers are billed.”

While the transparency sought in AB 56 is viewed as unprecedented, the fact that new pipeline safety regulation has been proposed isn’t such a new concept.

“What tends to happen is (someone recognizes) some very glaring loophole in legislation, whether in the state or country, and then there is momentum to address some of these issues,” said Rick Kuprewicz, a Redmond, WA-based pipeline safety expert.

Over the last 30 to 40 years, there have been a number of tragic pipeline explosions, Kuprewicz said, such as the one in Bellingham, WA, that caused 229,000 of gasoline to gush into a creek and set off a fireball that killed three people. Each similar incident has led to what was thought to be stronger pipeline regulation, he said.

“Do you have advancements that go far enough? No,” Kuprewicz added. “But there is usually some progress.”

The goal of Hill’s legislation is to make sure the pipeline rules go far enough this time. The bill proposes to make shareholders, not ratepayers, pay the fines if utilities are penalized by the CPUC for violating safety standards.

The legislation would also require utilities to submit annual reports to the CPUC detailing pipeline problems that were identified and whether they need repairs.

From his experience, Kuprewicz said, he believes regulation and enforcement need to be improved. But he said there also needs to be a balance between punishment and efficiency when considering changing pipeline safety rules.

“When it comes down to it, I don't think you can have too much regulation,” Kuprewicz said. But, more than anything, he added, “you need to have effective and efficient regulation.”