Steven R. Meyers is a founding principal at the Oakland-based law firm Meyers Nave and special counsel to the City of San Bruno. He can be reached at smeyers@meyersnave.com. Britt K. Strottman is senior counsel at Meyers Nave and can be reached at bstrottman@meyersnave.com.

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About Legal Notes

This column is provided as general information and not as legal advice. The law is constantly evolving, and attorneys can and do disagree about what the law requires. Local agencies interested in determining how the law applies in a particular situation should consult their local agency attorneys.

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Most people are generally unaware of what lies beneath the streets they travel on each day. Depending on the level of urbanization in a given community there may be multiple systems of lines and pipes for conveying water, sewage, storm drainage, petroleum, gas and communications systems including fiber optic, telephone and cable television services — as well as electrical conduits and transformer vaults — and the occasional subway system and pedestrian walkway. In some metropolitan areas, high-pressure steam is also pumped underground for heating purposes.

Understanding the sub-surface infrastructure is an important local government consideration.¹ Owners and operators of most underground pipelines and facilities (whether or not in the public right of way) participate in a nationwide 811 system, which involves “call before you dig” warnings. This “one-call” system is intended to notify local utilities about projects involving excavation in proximity to underground utility facilities. When the system works as intended,² homeowners and contractors can expect utilities to mark the ground or pavement to indicate where underground facilities exist below in an effort to avoid third-party damage caused by excavation.

Notwithstanding the existing one-call system, it is not always direct third-party interference with a utility line that can generate bad consequences. Rather, the greatest threat to public safety is presented by the age, failure or mismanagement of those utility lines. The following examples illustrate a significant increase in recent years in the number of incidents and disasters nationwide caused by underground infrastructure failures that were not primarily driven by third-party damage.

1. Bellingham, Wash. — Liquid gas line break killed three people (1999);
2. Carlsbad, N.M. — Natural gas explosion killed 12 people at a campsite (2000);
3. Bergenfield, N.J. — Natural gas explosion in an apartment building killed three people (2005);
4. Plum Borough, Pa. — Natural gas explosion in a home killed one person and seriously injured a 4-year-old girl (2008);
5. Rancho Cordova, Calif. — Natural gas explosion in a home killed one person (2008);
6. Middletown, Conn. — Gas plant explosion killed six people (2010);
7. San Bruno, Calif. — Natural gas pipeline explosion killed eight people and injured 66 others. Thirty-eight homes were destroyed, 17 homes were rendered uninhabitable and 53 other homes were damaged (2010);
8. Allentown, Pa. — Natural gas explosion in suburban neighborhood killed five people (2011); and
9. Sissonville, W.Va. — Gas line explosion destroyed part of an interstate highway and damaged nine homes (2012).

Accordingly the public has raised questions, including:

• What pipelines and other underground utilities are near my home, my job and the schools my children attend?
• Are these pipelines safe now or being made safe?
• How will I know when utility pipelines have been tested and replaced if they are not safe?³

Local government leaders are also asking questions, such as:

• What pipeline infrastructure exists under city streets and within the other public rights of way?
• What authority do local public agencies have over pipelines conveying flammable, explosive materials within their borders — regardless of whether the lines are located in the public right of way?
• What should we expect from California pipeline operators now under orders (following the San Bruno disaster) from state and federal regulators to undertake multiyear, billion-dollar programs to overhaul aging and neglected transmission and distribution infrastructure?⁴

The Pipeline and Hazardous Materials Safety Administration is the federal agency that administers the national regulatory program to ensure the safe transportation of natural gas, petroleum and other hazardous materials by pipeline operators. The California Public Utilities Commission (CPUC) is certified by the Pipeline and Hazardous Materials Safety Administration to enforce those safety regulations within California.⁵ CPUC General Order 112-E adopts and automatically incorporates all updates to federal pipeline safety regulations. Beyond General Order 112-E’s specific requirements, the California Public Utilities Code also requires that public utilities provide and maintain “adequate, efficient, just and reasonable” service and facilities necessary for the “safety, health, comfort and convenience” of their customers and the public.⁶

But cities also have critical legal and practical authority to help protect the public against potential damage from the failure of aging and neglected pipelines and other utility infrastructure. Thus, suggested actions for cities include seven key elements.

1. Locate, review and strengthen your city’s franchise agreements with underground utility owners and operators.

Find the city’s existing franchise agreement(s) with publicly owned and/or privately owned utilities, and audit the operators for compliance with their terms and applicable federal and state requirements. Review each franchise agreement carefully with legal counsel to identify opportunities to strengthen city protections.

The California Constitution authorizes cities to “grant franchises for public utilities or other businesses on terms, conditions and in the manner prescribed by law.”⁷ For example, municipalities can elect to grant a franchise to natural gas utilities under either the Broughton Act of 1905⁸ or the Franchise Act of 1937.⁹ These statutes set forth the procedures to be followed when municipalities grant franchises.¹⁰ Charter cities may have additional legal authority in granting franchises. But federal and state law pre-empts local regulation of design and construction, even in franchise agreements authorizing the use of municipal streets and rights of way.¹¹ However, cities have a strong interest in protecting public property and residents. To accomplish that goal, municipalities may wish to:

• Require franchisees to disclose products and quantities of products transported over pipelines; and
• Make any failure to comply with safety or environmental laws a breach of the franchise agreement.

Franchise agreements are contracts.¹² As a result, a city cannot unilaterally modify the terms of its franchise agreement.¹³ Therefore, cities should avoid lengthy or perpetual terms that prevent requirements from being updated in a timely manner as laws, regulations, development patterns, safety practices and pipeline technology change. Franchisees are strictly liable for all damage caused in connection with the use or operation of a franchise, or by any pipeline or other facility failure, regardless of whether such damage was wholly or partially caused by a third party.¹⁴ This strict liability language under the Public Utilities Code should be expressly included in the franchise agreement.

2. Gather information on the infrastructure beneath city streets and rights of way.

Ask each franchisee or operator for current information, including relevant maps and records, regarding the physical location and characteristics of pipelines and other lines operating within the jurisdiction. Specifically request details and records regarding:

• Which products a pipeline carries;
• Its capacity and operating pressure;
• The materials it is made of;
• The method of welding used;
• The precise location of the pipeline and shut-off valves; and
• The location of the nearest utility yard with personnel qualified to shut off the gas (or other product conveyed via the pipeline) who are available to service the line in the event of an emergency 24 hours a day — and their contact information.

Ask franchisees to:

• Provide the city with copies of all environmental reports they file with environmental agencies;
• Immediately notify the city in the event of a spill or environmental or safety threat; and
• Remediate damage according to applicable environmental laws.

3. Familiarize yourself with operator safety plans.

Federal and state laws require pipeline operators to “prepare and follow” a procedural manual for operations, maintenance and emergencies.¹⁵ Pipeline operators are also obligated to adopt an emergency plan in compliance with federal and state laws.¹⁶

Ask each operator for a copy of its safety plan as it relates to pipelines that run within city borders. Critically evaluate that safety plan with emergency responders. Follow through with the operator to ensure that it has the tools and correct personnel in place to execute its safety plan. Meet with the franchisee or operator and review the plan and the likelihood of failure scenarios on the relevant pipelines. Review responses and shut-off procedures. Ensure that there is a lead contact person at the utility in case of an emergency. Consider requiring each franchisee to notify the city of any safety violations it self-reports or any violations the CPUC charges a franchise with committing. Request copies of all safety-related reports and communications the operator files with the CPUC.

4. Review and evaluate operator public awareness plans.

Under federal and state law, each natural gas operator must also establish and implement a public awareness program that effectively informs the public and emergency response agencies about the utility’s operations.¹⁷ Therefore, evaluate each operator’s public awareness program and determine the degree of public education that may be appropriate given the nature of the underground facilities and product being transported.

5. Participate in a disaster preparedness exercise.

Carry out a disaster exercise in the city, and require the participation of the utility and operator under the franchise agreement. It is in the public’s best interest for cities to be prepared to handle a large-scale emergency involving flammable and explosive gas.

6. Develop a coordinated strategy for reviewing and permitting planned pipeline and other utility safety work in your community.

Although cities are pre-empted from regulating the “design and construction” of utility pipelines, authority over the location of such pipelines and the “use and repair of the public streets by any public utility” could remain within the purview of municipalities as they issue encroachment and other permits.¹⁸ Encroachment permits should include conditions of safety requirements and indemnity provisions.

7. Review the CPUC’s safety plans and determine how they impact your city.

The CPUC recently approved natural gas safety plans that involve large-scale repair, testing and construction on natural gas pipelines statewide. For example, PG&E’s 2012–14 Pipeline Safety Enhancement Plan alone provides for pressure-testing 783 miles of natural gas pipeline, replacing 186 miles of pipeline, upgrading 199 miles of pipeline to allow in-line inspection, and installing 228 automated shut-off valves.

Gather information about how CPUC-mandated natural gas safety plans may affect your community’s infrastructure. Consider the repair, testing and construction activities proposed for your community and develop a comprehensive approach for reviewing and permitting the planned improvements, including conditions the city prefers related to the location, use and repair of affected city streets.

Conclusion

Cities should not rely solely on natural gas and other utility pipeline operators to maintain and operate safe systems. Nor should cities trust that utilities will provide city staff with necessary details before an emergency occurs. A city has legal options with its pipeline operator if the operator fails to provide safe service to city residents. Cities may also petition the Pipeline and Hazardous Materials Safety Administration and CPUC to investigate potential safety violations under the law. Cities would be well served by taking a more active role in gathering information on natural gas and other utility infrastructure in their communities and requiring operators to comply with applicable federal and state laws, franchise agreements and local permitting conditions to the extent possible or feasible.

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Footnotes:

[1] Cal. Gov. Code § 4216

[2] See www.call811.com.

[3] http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M040/K531/40531580.PDF

[4] See CPUC Decision 12-12-030.

[5] 49 U.S.C. §60101(a).

[6] Cal. Pub. Util. Code § 451.

[7] Art. XII, section 8.

[8] Cal. Pub. Util. Code §§ 6001-6017.

[9] Cal. Pub. Util. Code §§6201-6205.1.

[10] Cal. Pub. Util. Code §§ 6001-6017; Cal. Pub. Util. Code §§6201-6205.1; Southern Pacific Pipe Lines, Inc. v. City of Long Beach (1988) 204 Cal. App. 3d 660, 666.

[11] Olympic Pipe Line Company v. City of Seattle, (2006) 437 F. 3d 872, 881; Southern Pacific Pipe Lines, Inc. v. City of Long Beach (1988) 204 Cal. App. 3d 660, 667-68.

[12] County of Alameda v. Pacific Gas & Electric Co., (1997) 51 Cal. App. 4th 1691, 1699.

[13] Id.

[14] Cal. Pub. Util. Code §6296

[15] See 49 CFR 192.605 and GO 112-E, incorporating the same.

[16] See 49 CFR 192.615 and GO 112-E, incorporating the same.

[17] See 49 CFR 192.616 and GO 112-E, incorporating the same.

[18] Cal. Pub. Util. Code § 2902; See also, Southern Cal. Gas Co. v. City of Vernon (1995), 41 Cal. App. 4th 209.

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This article appears in the June 2013 issue of Western City
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