Still stung from federal rebukes of its past natural gas pipeline safety oversight in the wake of the San Bruno, CA, pipeline rupture in 2010, the California Public Utilities Commission (CPUC) is looking at ways to elevate safety considerations in all of its proceedings, including rate cases.
The CPUC has scheduled a workshop for Tuesday in San Francisco to kick off the effort. In utility rate proceedings, the CPUC traditionally concentrates on the costs of various proposed programs and operations, ignoring more qualitative issues, such as impacts on the safety of various energy utility operations covering both natural gas and electricity. The CPUC has developed a straw proposal aimed at getting stakeholder input during the workshop.
While recent state pipeline safety legislation mandates CPUC action on the gas utility side, the straw proposal attempts to “raise the bar for both electric and gas systems and security,” the regulator said. The goal is to improve the ratemaking processes so safety initiatives are prioritized.
To get to this new level of safety consciousness, the CPUC is suggesting that requirements for all rate cases be established to require the COOs of the various utilities to demonstrate how tangible safety measures have been incorporated throughout their corporate cultures. There would be requirements in each rate case for the utility involved to detail the technical state of its overall system, including the most recent risk assessment.
What the CPUC staff is proposing in its draft paper is nothing short of cultural change for both the regulators and utilities, it said. As part of this, the CPUC proposal would attempt to ensure that there is accountability through mid-point reviews that provide “enough data” to assess progress and concerns in prioritizing safety throughout the utility.
One recommended change would be to “institutionalize” the role of the CPUC Consumer Protection and Safety Division (CPSD) in all ratemaking proceedings. The safety division currently has no regular participation in utility rate cases. Separately, the CPUC has an ongoing national search for a new CPSD director.
Ultimately, the CPUC envisions that both state regulators and the private-sector energy utilities they regulate would “thoroughly understand” industry best practices, conduct increased employee training, and explore approaches taken by other states and the federal government.
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