California Public Utilities Commission Votes to Approve Decision Setting the Interim Range of Aliso Canyon Natural Gas Maximum Storage Capacity at Up to 41.16 Billion Cubic Feet

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By Benjamin L. Sheinman

On November 4, 2021, the California Public Utilities Commission (CPUC) voted 4-0 to approve D.21-11-008.  President Batjer was absent from the meeting.  This decision, proposed by Commissioner Guzman Aceves, set the interim storage capacity at the Aliso Canyon Natural Gas Storage Facility (“Aliso Canyon”) at a range of between zero and 41.16 billion cubic feet.  This decision was adopted over a proposed decision by Administrative Law Judge Zhang, which would have set the interim storage capacity at Aliso Canyon at a range between zero and 68.6 billion cubic feet.

In response to a 2015 natural gas leak at Aliso Canyon, SB 380 (Pavley) (Chapter 14, Statutes of 2016) was signed into law by Governor Newsom on May 10, 2016. [23:1 CRLR 185]  SB 380 required the Commission “to open a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electric reliability for the region . . . .” In response, the Commission initiated proceeding I.17-02-002, which ordered an investigation to evaluate the “feasibility of minimizing or eliminating the use of the Aliso Canyon natural gas storage facility” “while still maintaining energy and electricity reliability for the [Los Angeles] region” at reasonable rates.  [23:1 CRLR 185]  This decision was issued pursuant to I.17-02-002.

In approving this decision, the Commission noted its sensitivity to public comments and arguments urging the immediate closure of Aliso Canyon.  However, the Commission stressed that I.17-02-002 is still open and that “[t]here remains analysis in . . . [the] proceeding concerning the portfolio of resources that could replace the services provided by Aliso Canyon in the long term.”  D.21-11-008, at 17. Additionally, the Commission stated that “the record shows that continuing to rely on Aliso Canyon is necessary to protect customers from natural gas reliability issues and rate impacts for both natural gas and electricity in the current timeframe, and until any mitigation of these potential reliability and cost risks is completed.” Id.

As such, the Commission determined that as a matter of public policy, it was reasonable to set the interim maximum gas storage level at Aliso Canyon at 41.6 billion cubic feet.  The interim storage levels remain in effect until such time as the Commission completes Phase 2 and 3 of proceeding I.17-02-002.  D.21-11-008 is effective as of November 4, 2021.

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