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Arroyo Grande introduces Phillips 66 pipeline franchise; company agrees to notify city if lines are reactivated
Summary
Council introduced an ordinance to grant Phillips 66 a franchise to construct, operate and maintain certain pipeline segments; staff noted inspection records and detection systems, and Phillips 66 representatives agreed to negotiate added language to notify the city prior to any pipeline reactivation.
The Arroyo Grande City Council on Nov. 25 introduced an ordinance granting Phillips 66 Pipeline LLC a franchise to construct, operate and maintain pipeline segments within the city and directed staff to seek added language requiring notification if pipeline segments are reactivated for transport.
Assistant City Manager/Public Works Director presented maps of the affected pipeline segments and explained the required three-step public-utilities-code process; the introduction is the second step, with final adoption scheduled for Dec. 9 if the council proceeds.
Staff reviewed inspection and safety information from the Office of the State Fire Marshal. The city has received a 2024 inspection summary showing compliance with state and federal maintenance requirements; staff also requested ten years of back inspection records and expects to receive those documents on Dec. 5. The presentation emphasized multilayered detection and response systems including SCADA and a "real-time transient model" that uses flow, pressure and temperature data to detect anomalies.
The draft franchise includes protective terms such as a $2,000,000 bond in favor of the city and a requirement that the grantee repair at its own expense any damage resulting from its operations, including remediation of leaks. Council members asked whether the city could require notice if Phillips 66 reenergizes (restarts) inactive pipeline segments and whether additional safety reporting could be included in the franchise.
Renee Flores, operations manager for Phillips 66 midstream operations in California, joined on the call and said notifications to the Office of the State Fire Marshal are standard for any line startup and that "it wouldn't be an issue to notify the city" as well. City staff and Phillips representatives said they will work to incorporate a notification provision into the franchise agreement.
Councilmember Marvaglia moved to introduce the ordinance with the addition discussed; the motion passed by roll call vote with all members voting yes. The city will return the ordinance for final adoption on Dec. 9 with additional inspection records and any negotiated notification language included in the staff report.
