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California Energy Officials Revisit NatGas Outlook With Concerns About Storage

California energy officials are reviewing a draft long-term natural gas outlook released last November and reassessing their assumptions following the shutdown of the state's largest gas storage facility due to a recently sealed well leak.

Officials at the California Energy Commission (CEC) on Wednesday told NGI that by early April a plan will be presented outlining the reliability of future gas supplies in Southern California, given the still-uncertain situation with Southern California Gas Co.'s (SoCalGas) 86 Bcf capacity, 3,600-acre Aliso Canyon underground storage facility (see Daily GPIFeb. 18).

In addition, CEC staff are working on an update to the draft 2015 Natural Gas Outlook embodied in the latest iteration of the state's Integrated Energy Policy Report. The draft last November projected that a falloff in gas-fired power generation would accompany a decline in gas demand, driven by growth in renewable energy resources and energy efficiency over the next 15 years (see Daily GPINov. 6, 2015).

Before the leak was sealed, leaders at the CEC joined with the California Public Utilities Commission and the California Independent System Operator to brief Gov. Jerry Brown on the leak. They responded to Brown's call for the agencies to jointly "take all actions necessary to ensure the continued reliability of natural gas and electric supplies during the moratorium on gas injections into Aliso Canyon."

Many local and state elected officials are siding with nearby residents that want Aliso permanently closed.

At the time of the agencies' letter to Brown, the immediate issue was making sure gas system reliability was available throughout this winter to core gas utility customers, given Aliso was shut down with 15 Bcf of supplies sitting in its working inventory. The state officials were helped out by record warm February weather in the state.

The CEC and the others are still concerned about having enough gas for summer peak load power supply needs.

"There is good reason to be concerned that reliability of supply may be critical for electric generators in the Los Angeles Basin, especially those served by Los Angeles Department of Water and Power," the agencies told Brown.

They committed to completing a 2016 summer assessment by April and holding a public, joint agency workshop in Los Angeles to describe the reliability risks and present a plan for mitigating those risks.

The last assessment of gas storage completed by the CEC was in 2008, and it concluded that there was demand for new storage in California. The report is available on the CEC website.

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