CA Bills Seek to Boost Gas Supply, Cut Prices

Acknowledging that federal regulators hold most of the trump cards related to lowering natural gas costs, the California legislature nevertheless has produced four bills aimed indirectly at cutting consumer costs by developing more underground storage (AB 78X), producing more in-state gas supplies (AB 73X), eliminating anti-competitive tariffs (AB 23X), and shortening new pipeline permitting processes (AB 42X).

"We can, and should, do a few things to make things better in California," said state Assemblyman Joe Canciamilla, chair of the natural gas cost and availability subcommittee. "There are a lot of factors that played a role (in California's gas prices being much higher than elsewhere), and most of those have to be corrected by the Federal Energy Regulatory Commission."

A spokesperson for the subcommittee chairman said the first hearing on the legislative quartet of bills probably will be held May 7, and if the legislation gets expedited treatment and support from two-thirds of the legislators, it could become law next month.

AB 23X would direct the California Public Utilities Commission to review all "current and proposed gas tariffs" to make sure they provide sufficient incentives for investment in new natural gas infrastructure. It is aimed at issues such as Southern California Gas Co.'s "residual service load (RSL)" tariff that is blocking proposed new interstate pipelines into the southern half of the state from signing up large end-use customers.

AB 42X would require the CPUC to complete its permitting process on all new pipelines in 12 months by creating an expedited environmental review process for all projects that are "determined not to cause adverse impacts on the environment." AB 73 X will attempt to increase the use of in-state supplies by facilitating lower Btu, below-pipeline-quality gas for selected industrial uses. AB 78X is aimed at speeding up the development of additional underground storage to "smooth out the demand" on constrained interstate pipeline capacity.

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