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AB-14 Natural gas.(2001-2002)

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AB14:v98#DOCUMENT

Amended  IN  Senate  August 27, 2001

CALIFORNIA LEGISLATURE— 2001–2002 2nd Ext.

Assembly Bill
No. 14

Introduced  by  Assembly Member Canciamilla

May 16, 2001

An act to amend Sections 216, 222, and 228 of the Public Utilities An act to add Section 216.6 to the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 14, as amended, Canciamilla. Natural gas supplies.
(1) Existing law The Public Utilities Act defines “public utility,” “gas corporation,” and “pipeline corporation” for purposes of the Public Utilities Act.
This bill would provide that the production, transportation, or sale of natural gas within this state by a corporation or person does not make the corporation or person a public utility, gas corporation, or pipeline corporation within the meaning of these definitions solely because of the production, transportation, or sale of natural gas, if the natural gas is of insufficient quality or heating value to make it acceptable for introduction into the line, plant, or system of a gas corporation or state or local agency, is not provided or sold to more than 5 end-users, including any use by the corporation or person, and the natural gas provided or sold to the end use customer is not resold by the end use customer.
The bill would require however, that a corporation or person that produces, transports, or sells natural gas within this state be subject to the jurisdiction of the Public Utilities Commission for compliance with all safety, service quality, and consumer protection standards applicable to public utilities, and subject to certain surcharges imposed on natural gas consumed in this state. amend the act to require nonutility grade natural gas providers, as defined, to notify the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation or the United States Department of Transportation of its intent to engage in, or cease, the selling of nonutility grade natural gas, as defined. The bill would subject natural gas sold or transported to end users by nonutility grade natural gas providers to specified provisions of existing law, and would require end users who consume nonutility grade natural gas provided by nonutility grade natural gas providers to notify the State Board of Equalization of their intent to consume that gas. The bill would require the Public Utilities Commission to ensure in rate allocation cases that any costs resulting from the bill do not result in an increase in costs to core customers of natural gas or to natural gas corporations. Because a violation of an order by the commission is a crime under existing provisions of law the act is a crime, this bill would impose a state-mandated local program by expanding the scope of a crime. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

Section 216 of the Public Utilities Code is

Section 216.6 is added to the Public Utilities Code, to read:

216.6.
 (a) As used in this section, the following terms have the following meanings:
(1) “Nonutility grade natural gas provider” means a person or corporation meeting all of the following criteria:
(A) The corporation or person produces, sells, or transports nonutility grade natural gas within this state for consumption by end users.
(B) The corporation or person sells or transports that nonutility grade natural gas to no more than five end users, provided that the gas actually delivered to the end user is nonutility grade natural gas.
(C) The corporation or person uses a pipeline that complies with subparagraph (B) to serve end users other than the owner of the pipeline.
(2) “Nonutility grade natural gas” means natural gas that meets one or more of the following criteria:
(A) Natural gas that is delivered in the Pacific Gas and Electric Company service area and has a heating range of less than 970 British thermal units (Btus) or more than 1150 Btus.
(B) Natural gas that is delivered in the Sempra Energy service area and has a heating range of less then 970 Btus or more than 1250 Btus.
(C) The nonutility grade natural gas provider determines the natural gas is of insufficient quality to make it acceptable for introduction into the line, plant, or system of the gas corporation nearest the well producing that natural gas or to a state or local agency.
(3) “End user” means any person or corporation, other than the pipeline owner or its subsidiaries or affiliates, that purchases natural gas or natural gas transportation services from the nonutility grade natural gas provider for its own use and does not sell or resell or further transport the natural gas for use by another entity. A pipeline owner may not be considered an end user solely because of consumption of natural gas necessary for the operation of the pipeline.
(b) (1) To protect life, health, property, and natural resources, any pipeline transporting nonutility grade natural gas pursuant to this section owned or operated by a nonutility grade natural gas provider is subject to the jurisdiction of the following entities, as follows:
(A) The Division of Oil, Gas, and Geothermal Resources in the Department of Conservation, if the proprietary pipeline is located within the administrative boundaries of an oil field as defined by the Division of Oil, Gas, and Geothermal Resources.
(B) The United States Department of Transportation for compliance with Sections 190 to 193, inclusive, of Title 49 of the Code of Federal Regulations, if the proprietary pipeline is located outside the jurisdiction of the Division of Oil, Gas, and Geothermal Resources.
(2) The nonutility grade natural gas provider shall notify the Division of Oil, Gas, and Geothermal Resources or the United States Department of Transportation, as applicable, of its intent to engage in the selling of nonutility grade natural gas or of its intent to cease the selling of that gas.
(3) Expansion of an existing proprietary natural gas pipeline for the sole purpose of serving end users does not make the existing pipeline subject to this section.
(c) Notwithstanding any other provision of law, natural gas sold or transported to end users by nonutility grade natural gas providers is subject to Article 10 (commencing with Section 890) of Chapter 4. For purposes of compliance with this division, end users who consume nonutility grade natural gas provided by nonutility grade natural gas providers shall notify the State Board of Equalization of their intent to consume that gas.
(d) Notwithstanding Section 216, 222, or 228, a nonutility grade natural gas provider providing service pursuant to this section is not a public utility, a gas company, or a gas pipeline within the meaning of this title solely because of the production, transportation, or sale of natural gas pursuant to this section.
(e) The commission shall ensure in rate allocation cases that any costs resulting from the implementation of this section do not result in an increase in costs to core customers of natural gas or to natural gas corporations.

amended to read:

216.

(a)“Public utility” includes every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, where the service is performed for, or the commodity is delivered to, the public or any portion thereof.

(b)Whenever any common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation performs a service for, or delivers a commodity to, the public or any portion thereof for which any compensation or payment whatsoever is received, that common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation, is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.

(c)When any person or corporation performs any service for, or delivers any commodity to, any person, private corporation, municipality, or other political subdivision of the state, that in turn either directly or indirectly, mediately or immediately, performs that service for, or delivers that commodity to, the public or any portion thereof, that person or corporation is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.

(d)Ownership or operation of a facility that employs cogeneration technology or produces power from other than a conventional power source or the ownership or operation of a facility which employs landfill gas technology does not make a corporation or person a public utility within the meaning of this section solely because of the ownership or operation of that facility.

(e)Any corporation or person engaged directly or indirectly in developing, producing, transmitting, distributing, delivering, or selling any form of heat derived from geothermal or solar resources or from cogeneration technology to any privately owned or publicly owned public utility, or to the public or any portion thereof, is not a public utility within the meaning of this section solely by reason of engaging in any of those activities.

(f)The ownership or operation of a facility that sells compressed natural gas at retail to the public for use only as a motor vehicle fuel, and the selling of compressed natural gas at retail from that facility to the public for use only as a motor vehicle fuel, does not make the corporation or person a public utility within the meaning of this section solely because of that ownership, operation, or sale.

(g)Ownership or operation of a facility that has been certified by the Federal Energy Regulatory Commission as an exempt wholesale generator pursuant to Section 32 of the Public Utility Holding Company Act of 1935 (Chapter 2C (commencing with Section 79) of Title 15 of the United States Code) does not make a corporation or person a public utility within the meaning of this section, solely due to the ownership or operation of that facility.

(h)The ownership, control, operation, or management of an electric plant used for direct transactions or participation directly or indirectly in direct transactions, as permitted by subdivision (b) of Section 365, sales into the Power Exchange referred to in Section 365, or the use or sale as permitted under subdivisions (b) to (d), inclusive, of Section 218, shall not make a corporation or person a public utility within the meaning of this section solely because of that ownership, participation, or sale.

(i)The production, transportation, or sale of natural gas within this state by a corporation or person does not make the corporation or person a public utility within the meaning of this section solely because of the production, transportation, or sale of natural gas, if all of the following conditions exist:

(1)The natural gas is of insufficient quality or heating value to make it acceptable for introduction into the line, plant, or system of a gas corporation or state or local agency.

(2)The natural gas is not provided or sold to more than five end users, including any use by the corporation or person.

(3)The natural gas provided or sold to an end use customer is not resold by the end use customer.

(j)A corporation or person described in subdivision (i) is subject to the jurisdiction of the commission for compliance with all utility safety, service quality, and consumer protection standards applicable to public utilities as defined in subdivision (a) of Section 216.

(k)Subdivision (i) may not result in any shift of costs to core customers of gas corporations.

SEC. 2.Section 222 of the Public Utilities Code is amended to read:
222.

(a)“Gas corporation” includes every corporation or person owning, controlling, operating, or managing any gas plant for compensation within this state, except where gas is made or produced on and distributed by the maker or producer through private property alone solely for his or her own use or the use of his or her tenants and not for sale to others.

(b)“Gas corporation” shall not include a corporation or person employing landfill gas technology for the production of gas for its own use or the use of its tenants or for sale to a gas corporation or state or local public agency, except that if the gas produced is of insufficient quality or heating value that it is unacceptable for introduction into the line, plant, or system of a gas corporation or state or local public agency, the person or corporation employing landfill gas technology may without becoming a gas corporation for purposes of this part sell the gas so produced to not more than four other corporations or persons.

(c)The production of natural gas within this state by a corporation or person does not make the corporation or person a gas corporation within the meaning of this section solely because of the production of natural gas, if all of the following conditions exist:

(1)The natural gas is of insufficient quality or heating value to make it acceptable for introduction into the line, plant, or system of a gas corporation or state or local agency.

(2)The natural gas is not provided or sold to more than five end users, including any use by the corporation or person.

(3)The natural gas provided or sold to an end use customer is not resold by the end use customer.

(d)A corporation or person described in subdivision (c) is subject to the jurisdiction of the commission for compliance with all utility safety, service quality, and consumer protection standards applicable to public utilities as defined in subdivision (a) of Section 216.

(e)Subdivision (c) may not result in any shift of costs to core customers of gas corporations.
SEC. 3.Section 228 of the Public Utilities Code is amended to read:
228.

(a)“Pipeline corporation” includes every corporation or person owning, controlling, operating, or managing any pipeline for compensation within this state.

(b)“Pipeline corporation” shall not include a corporation or person employing landfill gas technology and owning, controlling, operating, or managing any pipeline solely for the transmission or distribution of landfill gas or other form of energy generated or produced therefrom.

(c)The transportation of natural gas within this state by a corporation or person does not make the corporation or person a pipeline corporation within the meaning of this section solely because of the transportation of natural gas, if all of the following conditions exist:

(1)The natural gas is of insufficient quality or heating value to make it acceptable for introduction into the line, plant, or system of a gas corporation or state or local agency.

(2)The natural gas is not provided or sold to more than five end users, including any use by the corporation or person.

(3)The natural gas provided or sold to an end use customer is not resold by the end use customer.

(d)A corporation or person described in subdivision (c) is subject to the jurisdiction of the commission for compliance with all utility safety, service quality, and consumer protection standards applicable to public utilities as defined in subdivision (a) of Section 216.

(e)Subdivision (c) may not result in any shift of costs to core customers of gas corporations.

(f)Natural gas provided or sold to end users pursuant to subdivision (c) is subject to Article 10 (commencing with Section 890) of Chapter 4. For purposes of complying with Article 10 (commencing with Section 890) of Chapter 4, all persons consuming natural gas pursuant to subdivision (c) shall be treated as if the gas that is consumed was delivered by an interstate pipeline. However, the exemption for gas transported on proprietary pipelines contained in Section 896 does not apply to gas transported pursuant to subdivision (c).
SEC. 4.

SEC. 2.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.