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Sempra’s Natural Gas Pipeline Proposal Rejected by California Regulators

California regulators on Thursday rejected a long-standing proposal to build an upgraded natural gas transmission pipeline between the systems of Sempra Energy's two utilities, Southern California Gas Co. (SoCalGas) and San Diego Gas and Electric Co. (SDG&E).

The proposed 36-inch diameter project, which was to run 47 miles, was estimated to cost $639 million.

Sempra management expressed disappointment in the rejection, as it "denies the public a complete analysis of a project to replace a nearly 70-year-old pipeline in favor of costly testing that will result in significant community impacts with negligible benefits."

The proposed pipeline as designed would replace an existing 16-inch line, but the California Public Utilities Commission (CPUC), which has looked at different proposals from Sempra over the past three years, decided proposed Line 3602 was not needed for either safety or reliability reasons.

The utilities' most recent gas supply forecast and the commission's reliability standard for gas planning "do not demonstrate that there is a need for the pipeline," a CPUC spokesperson said

The five-member CPUC ordered SoCalGas and SDG&E to "pursue other options for supply" in smaller volumes and for shorter periods of time, meaning more spot market purchases.

Also in the CPUC order are mandates for the utilities to ensure the existing 16-inch Line 1600 conforms to "all state laws and rules" applying to gas transmission pipeline, the spokesperson said. The utilities countered that "because the CPUC has refused to evaluate these alternatives and costs and closed the application prematurely, customers living along the existing pipeline route and the public will not have the benefit of reviewing a full evaluation of alternative routes."

Despite the rejection, Sempra's spokesperson said SoCalGas and SDG&E will work with CPUC safety staff to implement a construction plan that addresses the safety requirements as quickly as possible.  

"Operating a safe natural gas system is critical to providing safe and reliable energy to our customers, and which fuels our economy," said the spokesperson. The system serves 880,000 homes and businesses in San Diego.  

This latest proposal called for the new pipeline to run from the Rainbow Station in the northern end of  San Diego County to the Miramar connection closer to the center of the San Diego metropolitan area.

Three years ago, the utilities' proposed an $855 million project, including a rebuilt compressor station and a 65-mile, 36-inch diameter north-south pipeline link. At the time, the utilities argued that the project would provide a second transmission link into the southern end of the state.

There continues to be only one pipeline link between SoCalGas and SDG&E, which provides the gas utility service to most of the southern half of California.

Also at the time, a statewide multi-billion-dollar transmission pipeline enhancement program was being carried out by Sempra's utilities and Pacific Gas and Electric Co. (PG&E), all of which were being implementing over several years as a CPUC requirement following the 2010 PG&E transmission line rupture in San Bruno, CA.

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