ALJ/MAB/gd2 Date of Issuance 6/16/2011

Decision 11-06-017 June 9, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Own Motion to Adopt New Safety and Reliability Regulations for Natural Gas Transmission and Distribution Pipelines and Related Ratemaking Mechanisms.

Rulemaking 11-02-019 (Filed February 24, 2011)

DECISION DETERMINING MAXIMUM ALLOWABLE
OPERATING PRESSURE METHODOLOGY AND REQUIRING FILING OF
NATURAL GAS TRANSMISSION PIPELINE REPLACEMENT OR
TESTING IMPLEMENTATION PLANS

1. Summary

This decision orders all California natural gas transmission operators to develop and file for Commission consideration A Natural Gas Transmission Pipeline Comprehensive Pressure Testing Implementation Plan (Implementation Plans) to achieve the goal of orderly and cost effectively replacing or testing all natural gas transmission pipeline that have not been pressure tested. The Implementation Plans may include alternatives that demonstrably achieve the same standard of safety but must include a prioritized schedule based on risk assessment and maintaining service reliability, as well as cost estimates with proposed ratemaking. In the interim, PG&E should continue to work on its determination of Maximum Allowable Operating Pressure through pipeline features analysis and should use the result of that analysis to impose further pressure reductions as necessary pending replacement or testing. PG&E may use engineering-based assumptions for this analysis where required due to missing records. A series of technical workshops will be convened prior to the filing of the Implementation Plans to assist the operators in prioritizing segments in their Implementation Plans.