H-3524.3

HOUSE BILL 2518

ByRepresentatives Shewmake, Ybarra, Boehnke, Tarleton, Mead, Fitzgibbon, Lekanoff, Ramel, Callan, Peterson, Slatter, Davis, Doglio, Pollet, and Cody

AN ACT Relating to the safe and efficient transmission and distribution of natural gas; amending RCW 70.235.020; adding a new section to chapter 80.28 RCW; adding a new section to chapter 81.88 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 2. A new section is added to chapter 80.28 RCW to read as follows:

(1) The commission must initiate a proceeding to increase certainty concerning the recovery of costs associated with measures, undertaken by a gas company and approved by the commission, to reduce hazardous leaks and nonhazardous fugitive emissions from the gas company's gas pipelines.

(2) A gas company may submit to the commission, as part of a general rate case or other proceeding, a list of projects and changes to operational procedures including, but not limited to, venting, blowdowns, and others, to reduce hazardous leaks and nonhazardous fugitive releases, ranked according to risk, severity, and complexity. As part of its filing, the gas company must include a cost-effectiveness analysis and propose a cap for annual expenditures recoverable through a cost recovery mechanism to be approved by the commission. The cost-effectiveness analysis must include: The value of leaked gas from hazardous leaks and nonhazardous fugitive emissions; the cost of greenhouse gas emissions associated with that gas, as calculated in accordance with RCW 80.28.395; the value of the reduction in risk resulting from gas leaks; and the cost of the measures undertaken to reduce hazardous leaks and nonhazardous fugitive emissions from the gas company's gas pipelines. A gas company may consider a percent of rate base, percent of revenues, total expenditures, or other basis for its proposed cap. As part of the proposal, the gas company must address the expected impact to ratepayers and other factors that may be required by the commission by rule.

(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Gas pipeline" has the same meaning as defined in RCW 81.88.010.

(b) "Hazardous leak" means a leak that represents an existing or probable hazard to persons or property and requires immediate repair or continuous action until the conditions are no longer hazardous.

(c) "Nonhazardous fugitive emissions" means emissions of greenhouse gases from the production, processing, transmission, storage, or use of fuels and other substances that do not pass through a stack, chimney, vent, or exhaust pipe.

(4) Nothing in this section may be construed to preempt the process by which a gas company is required to petition relevant state or local authorities when seeking to expand the capacity of the company's gas transmission or distribution lines.

NEW SECTION.  Sec. 3. A new section is added to chapter 81.88 RCW to read as follows:

(1) Beginning July 1, 2020, and on an annual basis thereafter, each gas pipeline company must submit a report to the commission on the environmental and economic performance of its gas pipeline system, including all known leaks from its transmission and distribution gas pipeline system, and all components, including pumps, valves, pipes, and pneumatic devices. Natural gas leaks include all confirmed discoveries of both intentional and unintentional leak events, as well as leaks resulting from equipment maintenance, malfunctions, or operational practices.

(2) The commission may determine information requirements for the annual performance reports submitted under subsection (1) of this section including, but not limited to:

(a) The approximate date and location of each detected leak from the gas pipeline system;

(b) The risk associated with and projected remediation plan for reported leaks in the gas pipeline system;

(c) The volume of each leak, measured in carbon dioxide equivalents and thousands of cubic feet;

(d) The identified cause of each leak, the proximity to a high consequence area as defined by 49 C.F.R. Sec. 195.452 (2019), and determination of whether the leak was the result of operational practice of the gas pipeline, equipment defect, or any other reason;

(e) Indication of a need to amend, update, or discuss the possibility of new pipeline risk profiles that may be added to the operator's integrity management plan or pipeline replacement plan; and

(f) The market value of lost gas and the methodology used to measure the loss of gas.

(3) By August 1, 2020, and on an annual basis thereafter, the commission must publish a report that aggregates data by gas company concerning gas leaks and that contains, at a minimum:

(a) The total volume of leaked gas, measured in carbon dioxide equivalents and thousands of cubic feet, categorized by cause, class, and component type;

(b) The total market value of leaked gas, categorized by cause, class, and component type;

(c) The volume and value of leaks that have not been remediated, and the volume and value of leaks that the gas pipeline companies do not intend to remediate; and

(d) Based on provided plans, the projected timeline of reductions in leakage by volume, measured in carbon dioxide equivalents and thousands of cubic feet.

(4) By August 1, 2021, and annually thereafter, the commission must publish a report and transmit it to the department of ecology that provides information on gas leakage in the state with information categorized in accordance with subsection (3) of this section. The report must also include an estimate of gas leakage during calendar year 1990, which the commission must develop using available methods or in coordination with gas pipeline companies. The annual report must provide a review of opportunities and obstacles to reducing gas leakage statewide, including workforce availability, infrastructure investments, permitting, technical and legal obstacles, and other relevant information as determined by the commission.

(5) Information reported by gas pipeline companies to the commission under this section is exempt from public inspection and copying under chapter 42.56 RCW if it contains proprietary data, trade secrets, or if disclosure of such information would affect public safety.

(6) For the purposes of this section, "carbon dioxide equivalents" has the same meaning as provided in RCW 70.235.010.

(7) Nothing in this section may be construed to preempt the process by which a gas pipeline company is required to petition relevant state or local authorities when seeking to expand the capacity of the company's gas transmission or distribution lines.

Sec. 4. RCW 70.235.020 and 2008 c 14 s 3 are each amended to read as follows:

(1)(a) The state shall limit emissions of greenhouse gases to achieve the following emission reductions for Washington state:

(i) By 2020, reduce overall emissions of greenhouse gases in the state to 1990 levels;

(ii) By 2035, reduce overall emissions of greenhouse gases in the state to twenty-five percent below 1990 levels;

(iii) By 2050, the state will do its part to reach global climate stabilization levels by reducing overall emissions to fifty percent below 1990 levels, or seventy percent below the state's expected emissions that year.

(b) By December 1, 2008, the department shall submit a greenhouse gas reduction plan for review and approval to the legislature, describing those actions necessary to achieve the emission reductions in (a) of this subsection by using existing statutory authority and any additional authority granted by the legislature. Actions taken using existing statutory authority may proceed prior to approval of the greenhouse gas reduction plan.

(c) Except where explicitly stated otherwise, nothing in chapter 14, Laws of 2008 limits any state agency authorities as they existed prior to June 12, 2008.

(d) Consistent with this directive, the department shall take the following actions:

(i) Develop and implement a system for monitoring and reporting emissions of greenhouse gases as required under RCW 70.94.151; and

(ii) Track progress toward meeting the emission reductions established in this subsection, including the results from policies currently in effect that have been previously adopted by the state and policies adopted in the future, and report on that progress.

(2) By December 31st of each even-numbered year beginning in 2010, the department and the department of ((community, trade, and economic development))commerce shall report to the governor and the appropriate committees of the senate and house of representatives the total emissions of greenhouse gases for the preceding two years, and totals in each major source sector, including emissions associated with leaked gas reported to the utilities and transportation commission under section 3 of this act. The department shall ensure the reporting rules adopted under RCW 70.94.151 allow it to develop a comprehensive inventory of emissions of greenhouse gases from all significant sectors of the Washington economy.

(3) Except for purposes of reporting, emissions of carbon dioxide from industrial combustion of biomass in the form of fuel wood, wood waste, wood by-products, and wood residuals shall not be considered a greenhouse gas as long as the region's silvicultural sequestration capacity is maintained or increased.

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