In keeping with a state law passed last year (SB 380), California regulators said Friday they will launch an 18- to 24-month investigation to determine whether to reduce or eliminate operations at Aliso Canyon, the state's largest underground natural gas storage facility.

The California Public Utilities Commission (CPUC) is expected to vote at its next meeting (Feb. 9) to establish an investigation into "the feasibility of minimizing or eliminating the use of" the Southern California Gas Co. (SoCalGas) 86-Bcf capacity Aliso field. Two public hearings on the controversial 3,600-acre facility are scheduled for Wednesday and Thursday in the San Fernando Valley section of Los Angeles.

The CPUC's proposed order instituting investigation (OII) calls for two phases. The first would complete an analysis of whether it is feasible to reduce or eliminate the use of Aliso Canyon and still maintain gas and electric reliability for the region. The second phase would take into consideration the first phase results and consider "whether the CPUC should reduce or eliminate the use of Aliso, and if so, under what conditions and parameters and in what time frame," a CPUC spokesperson said.

A final decision is expected by mid-2018, but the CPUC has slated a 24-month time frame from opening the proceeding to completing all work, the spokesperson said. CPUC expectations are that the first phase analysis would include an assessment of potential impacts on utility rates, which would be accomplished through stakeholder participation in public workshops.

Last week, Sempra Energy withdrew small volumes of gas from Aliso to avoid the possibility of curtailing some of its largest industrial and commercial customers because of cold weather, which increased demand to its highest daily peaks so far this winter.

SB 380 mandated that the CPUC open a statewide proceeding by July 1. The CPUC plans to consult with the state Energy Commission, the California Independent System Operator, local public sector utilities, the state Division of Oil, Gas and Geothermal Resources and relevant government entities.

"The CPUC expects and welcomes involvement and input from a wide range of interested entities to inform its decision-making process," the spokesperson said. A CPUC administrative law judge would be assigned to oversee the proceedings and to set a pre-hearing conference and hearing schedule.