Natural Gas Ratepayer Protection Act., the official text

An act to add the heading of Article 1 (commencing with Section 328) to, and to add Article 2 (commencing with Section 329) to, Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, relating to natural gas.

LEGISLATIVE COUNSEL'S DIGEST

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law requires, until at least December 31, 2029, each gas corporation to submit to the commission a map that includes, among other things, the location of all potential gas distribution line replacement projects identified in its distribution integrity management plan and any foreseeable gas distribution pipeline replacements, as provided.
This bill would require each gas corporation to submit an annual report to the commission that describes its expenditures associated with gas distribution infrastructure replacement and upgrade projects, as provided. The bill would require the commission, before authorizing recovery of costs associated with a gas distribution infrastructure replacement and upgrade project, to consider whether cost-effective electrification alternatives or nonpipeline alternatives could reasonably avoid or reduce the costs, and to adopt rules implementing this requirement, including a reasonable cost threshold below which the requirement would not apply. The bill would require the commission to evaluate whether depreciation schedules for gas distribution infrastructure replacement and upgrade projects appropriately reflect projected reductions in gas demand and consider alternative depreciation methodologies that minimize future ratepayer exposure to stranded asset costs.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the above provisions would be part of the Public Utilities Act and a violation of a commission action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.
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.

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

SECTION 1.
This act shall be known, and may be cited, as the Natural Gas Ratepayer Protection Act.

SEC. 2.
The heading of Article 1 (commencing with Section 328) is added to Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, to read:
1.
General Provisions

SEC. 3.
Article 2 (commencing with Section 329) is added to Chapter 2.2 of Part 1 of Division 1 of the Public Utilities Code, to read:
2.
Natural Gas Transition329.
(a) Each gas corporation shall submit an annual report to the commission that describes its expenditures, during the pendency of its current general rate case cycle, associated with gas distribution infrastructure replacement and upgrade projects and includes all of the following:
(1) Planned and forecasted expenditures for each gas distribution infrastructure replacement and upgrade project.
(2) The status of gas distribution infrastructure replacement and upgrade projects planned, initiated, completed, deferred, or canceled since the gas corporation’s most recent general rate case decision.
(3) The estimated remaining costs and projected completion dates for ongoing gas distribution infrastructure replacement and upgrade projects.
(4) Any expenditures recorded in any catastrophic event memorandum account, wildfire memorandum account, or other memorandum or balancing account used to recover costs associated with wildfire response, recovery, or gas distribution system restoration.
(5) Any material changes in projected customer counts, projected gas throughput, or other assumptions used to justify the gas distribution infrastructure replacement and upgrade projects, including an assessment of stranded asset risk.
(6) Available electrification and nonpipeline alternatives.
(b) The commission may require the report required pursuant to subdivision (a) to be submitted in a format that facilitates public review and comparison of authorized and actual expenditures.

329.1.
(a) (1) Before authorizing recovery of costs associated with a gas distribution infrastructure replacement and upgrade project, the commission shall consider whether cost-effective electrification alternatives or nonpipeline alternatives could reasonably avoid or reduce those costs.
(2) As part of its long-term gas planning rulemaking or in a successor proceeding, the commission shall adopt rules implementing this requirement, including a reasonable cost threshold below which this requirement shall not apply.
(b) The commission shall evaluate whether depreciation schedules for gas distribution infrastructure replacement and upgrade projects appropriately reflect projected reductions in gas demand and consider alternative depreciation methodologies that minimize future ratepayer exposure to stranded asset costs.
(c) Nothing in this section shall delay or disallow recovery of prudently incurred costs required for the safety, reliability, or legal compliance of gas distribution infrastructure, or for emergency or catastrophic event response.

SEC. 4.
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.