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CPUC Approves New CA Merchant Storage Facility

A third nonutility underground natural gas storage field in the state was approved last Thursday by the California Public Utilities Commission, whose lead regulator on the case said the quick action on the proposal will allow the state to have an extra 1 Bcf of gas in storage before the next winter heating season begins in November.

Existing merchant operator Lodi Gas Storage gained CPUC approval to develop the 7 Bcf Kirby Hills Storage Project in a depleted oil and gas field in Solano County between the San Francisco Bay area and Sacramento. It will have the immediate capability of injecting or withdrawing 50 MMcf/d and eventually increasing that to 100 MMcf/d.

On a 5-0 vote with little comment, the CPUC gave the go-ahead for Lodi to develop the three-part facility: a receiving and metering station near two major Pacific Gas and Electric Co. transmission lines (400 and 401 lines), a 5.9-mile connecting pipeline, and a gas storage site connected to the metering station by the pipeline.

As part of the action, the state regulatory commission approved a mitigated negative declaration study as part of the state's environmental quality act requirements. Under the approval, Lodi Storage will have to meet the conditions of this study, according to Commissioner John Bohn, who praised the regulatory staff for "working very quickly" on this project.

"The hard work of these dedicated individuals allowed this item to be ordered out in early March, meaning construction will start sooner, the project will be finished sooner, and there will be an additional billion cubic feet or more of gas available for next winter," Bohn said.

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