6. Changes to the Commission's Regulations
This rulemaking will consider what aspects of the Commission's regulation of natural gas transmission and distribution pipelines should change, e.g., siting, maintenance, inspections, best operating practices, ratemaking, and safety audits. Based on the information gathered so far in our investigation, we propose immediate changes to certain rules. The draft revised rules are attached to today's decision as Attachment A, and parties may file and serve comments on these rules as set forth below.
Our staff is also developing additional rules for near-term implementation. In Appendix B, our staff has set forth the rationale for and description of draft rules they are currently developing on 12 topics that range from prioritizing retrofit of existing pipelines to allow in-line inspections to making uniform our rules on underground clearance requirements. We expect to bring forward specific draft rules on these topics early in this proceeding.
To develop further proposed rules, we have preliminarily identified the following questions and issues, and we fully expect that other issues will arise as investigations are completed and recommendations brought forward:
· Are some changes more urgent and obvious than others?
· How widespread is the problem of inaccurate pipeline records found by the NTSB in the San Bruno instance?
· What requirements should the Commission adopt to ensure that natural gas pipeline operators possess and are maintaining traceable, verifiable, and complete pipeline records?
· Should the state pipeline regulations in GO 112-E be changed and how?
· Should this Commission advocate for changes to federal gas pipeline regulations?
· Should the Commission adopt rules for enhanced penalties for life-threatening violations?
· Should the Commission use its existing enforcement authority earlier or more aggressively as part of its graduated enforcement program for safety-related violations?
· Should the Commission seek additional legislative authority for an enhanced enforcement regime for safety related matters?
On January 3, 2011, the NTSB issued urgent safety recommendations as a result of discovering "discrepancies between installed pipe and as-built drawings in PG&E's gas transmission system."5 The Executive Director ordered PG&E and all other California gas pipeline utilities to search all available records for their respective pipelines to ensure that the maximum allowable operating pressure for each pipeline has been established with traceable, verifiable, and complete records. PG&E is scheduled to report the results of its review to the Commission on March 15, 2011, San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) will report on April 15, and Southwest Gas Corporation has already reported. These gas utilities shall formally file their reports in the record of this rulemaking and serve the report on the service list.
In GO 112-E, the Commission adopted the federal rules for the design, construction, quality of materials, locations, testing, operations and maintenance of facilities used in the gathering, transmission and distribution of natural gas and in liquefied natural gas facilities in California. The Commission's rules follow the Federal Pipeline Safety Regulations, as the regulations are updated from time to time.
This GO is the linchpin of the Commission's regulation of natural gas pipelines. To the extent that the record in this proceeding identifies deficiencies in the Commission's regulation of gas utilities, changes to this GO will be proposed for consideration by the Commission. Because many of the actual regulations flow from federal rules, it may be necessary to seek changes to the underlying federal regulations or, where necessary, the Commission may proceed to formulate regulations with stricter standards.
This rulemaking will also consider whether the rules and requirements we adopt in the safety phase of PG&E's gas transmission and storage rate case, A.09-09-013, should apply to the state's other gas utilities. We anticipate a decision in A.09-09-013 for PG&E in the first half of this year.
Our goal through all of these proceedings will be to establish rules and policies that accord safety of gas utility operations the highest level of significance. We must ensure that our gas utilities recognize that mere compliance is not enough. Safe pipeline operations must begin with utility management and the culture it creates in the workrooms and field crews of the utility. The pipeline operators must have a corporate ethic and workplace culture that places safety as their first responsibility.
5 Letter from Deborah A.P. Hersman, NTSB Chairman, to Paul Clanon, referencing P-10-5 through - 7, at 2. The letter also directed this Commision to "ensure, through adequate oversight" that PG&E complies with the NTSB record search requirements and, where PG&E is unable to locate satisfactory records, to "provide oversight to any spike and hydrostatic tests that PG&E is required to perform." Id. at 3.
