Daily GPI / NGI The Weekly Gas Market Report / Regulatory / Infrastructure / NGI All News Access

Proposed Decision Rejects SoCalGas NatGas Pipeline Link; Aliso Outage A Factor

A California regulatory judge's proposed decision Tuesday rejects longstanding plans for a $600 million large-diameter natural gas transmission pipeline link in Southern California Gas Co.'s (SoCalGas) system, and the closure of SoCalGas' Aliso Canyon underground gas storage facility was cited as a factor.

The proposed decision found that there are more economical, non-utility alternatives to SoCalGas' project.

The California Public Utilities Commission (CPUC) issued the proposed decision from Administrative Law Judge Karl Bemesderfer denying the Los Angeles-based Sempra Energy utility's proposal to upgrade a compressor station and build a 65-mile, 36-inch diameter north-south pipeline link (see Daily GPIMay 7, 2015).

The five-member CPUC could vote on the proposed decision at its May 12 business meeting.

As proposed by the utility, the project would cost $621.3 million, including a new pipeline between the high desert town of Adelanto and the utility's Moreno pressure limiting station, along with rebuilding the Adelanto compressor station.

In part, the linking of northern and southern branches is aimed at increasing the reliability of the SoCalGas system by allowing its Honor Rancho underground storage field on the northern system to help support deliveries on the southern system, according to the CPUC's assessment.

SoCalGas argued that its project was needed to bolster its southern system reliability and alleviate the potential for curtailments of customers due to a mismatches between the demand of large customers and the volume of  flowing supplies.

Bemesderfer concluded that there are more cost-effective alternatives to support the utility’s southern natural gas system, a CPUC spokesperson said. Those include separate projects to increase links to the southern system by Transwestern Pipeline, Trans-Canada Corp., and El Paso Natural Gas Co.

Bemesderfer also said that because of the prolonged leak at SoCalGas' Aliso Canyon storage facility (see Daily GPIFeb. 18), there is little stored gas available on the northern system to support deliveries on the southern system, a situation that significantly reduces the value of a new north-to-south pipeline, particularly in light of lower cost alternatives.

"The proposed decision finds that even without considering the developments at Aliso Canyon, there are multiple alternatives to the north-south pipeline that could reliably deliver additional gas supplies to the southern system at much lower cost than the proposed pipeline," the commission spokesperson said.

For a number of years, California's energy regulatory process has examined various aspects of the Southern California pipeline proposal, which at one point carried a price tag of more than $850 million. It was expected to influence price differentials among the different receipt points on the SoCalGas transmission system.

The utility project offered a second transmission link into the southern end of the state and would involve SoCalGas' affiliated Sempra utility, San Diego Gas and Electric Co. (SDG&E). Currently there is only one link between SoCalGas and SDG&E, which provide the gas utility service to most of the southern half of California.

Recent Articles by Richard Nemec

Comments powered by Disqus