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California Gas Storage Emergency Could Be Prolonged, Regulator Says

California's largest underground natural gas storage field could eventually be closed permanently and when it might reopen is uncertain, at best, meaning state officials and the state's energy utilities could be wrestling with the aftermath of a four-month leak stopped in mid-February for some time, the California Public Utilities Commission (CPUC) President Michael Picker said Thursday.

Picker made his brief assessment of the Southern California Gas Co. (SoCalGas) Aliso Canyon storage facility as the CPUC took two actions to help conserve gas and electricity consumption to help avoid rolling power outages this summer and beyond.

Since the 3,600-acre, 86 Bcf capacity facility's storage well leak was permanently sealed (see Daily GPIFeb. 18), a collaboration of state energy agencies and Southern California utilities completed a third-party assessment that identified the risk of up to 14 days of rolling blackouts on the grid in the southern half of the state (see Daily GPIApril 5), causing the CPUC to look to emergency measures to avert the risk from becoming a reality.

In voting unanimously (5-0) to boost energy-savings among consumers, the CPUC is "going to be focusing for some time [on the aftermath of the Aliso Canyon incident]," Picker told his colleagues. "The [Southern California] energy system is built around having the storage field available in the Los Angeles Basin and it's not an easy thing to ignore."

Picker differentiated the challenges with the prospects of a permanent closure of the Aliso Canyon facility compared to several years ago when San Onofre Nuclear Generating Station (SONGS) was shut down permanently. In the latter, the CPUC and operator, Southern California Edison Co. (SCE), had to focus on summer peak electrical loads, but with Aliso, both winter gas peaks and summer electrical peaks are in play, he said (see Daily GPIJune 13, 2013).

About 60% of the supplies stored at Aliso typically are used in the winter to provide gas to SoCalGas retail customers for space heating, cooking and water heating, Picker said.

"I am not sure we can say now -- given the ongoing investigation and the testing of the well integrity -- that we know that Aliso will ever come back," Picker said. "Right now I don't think we can make that statement.

"It may be that it will, but we don't know when or under what circumstances, so the world has changed, and we're taking these first steps to address that, but it is going to be a continuing challenge for this summer, next winter and probably the following summer. This [facility and issue] are going to figure heavily in our thinking for some time to come."

The CPUC approved an $11 million stepped-up marketing, education and outreach program for the LA Basin to be headed by Sempra Energy's SoCalGas utility and overseen by several state agencies, including the California Energy Commission (CEC) and the California Independent System Operator (CAISO); $5 million of the funds will supplement added consumer conservation alerts under the CAISO Flex Alert programs.

In the second action, the state regulators authorized SCE and SoCalGas to expand and accelerate their energy efficiency programs to get more gas- and power-saving equipment and programs in operation in the areas immediately affected by the Aliso closure.

Commissioner Mike Florio said that given that "we are dealing with an emergency it is appropriate to proceed in this fashion," adding that the CPUC's expedited approach is "much more expeditious and appropriate given that we are dealing with a full-blown emergency."

Picker reiterated that the CPUC has broad powers, and Aliso "is going to be an ongoing challenge for us and we may be making changes to our approach throughout the summer months."

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