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California Regulators Nix SoCalGas North-South Pipeline

California regulators on Thursday nixed a proposed pipeline project that was intended to support the southern gas distribution system of Southern California Gas Co. (SoCalGas). The ongoing shut-in of the Aliso Canyon storage field diminished the value of such a project, the California Public Utilities Commission (CPUC) said.

"Because of the leak at Aliso Canyon [see Daily GPIJuly 7], 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 regulators said.

The CPUC previously delayed its decision on the $621.3 million North-South Pipeline (see Daily GPI, May 13). The project would have consisted of a new natural gas pipeline between the town of Adelanto and the Moreno Pressure Limiting Station, as well as rebuilding the Adelanto Compressor Station, in part, to increase reliability by allowing the Honor Rancho, a storage field on the northern system, to help support deliveries on the southern system.

The CPUC determined that 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 basic issue is whether it is in the public interest to construct the North-South Pipeline Project," said CPUC Commissioner Mike Florio, who was assigned to the proceeding. "SoCalGas was unable to demonstrate that there is a need for the North-South Project given that it would not bring additional gas into Southern California but merely provide a means for reallocation of existing supply."

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