CA Regulators Investigate Gas, Power Systems

With the growing inadequacies in both natural gas and electricity delivery systems that emerged as part of the summer's wholesale electricity market problems, California regulators Thursday ordered separate statewide investigations of both infrastructures with an emphasis on the gas side in Sempra Energy's territory in the southern end of the state.

The California Public Utilities Commission's upcoming review of the electricity infrastructure, which duplicates some other efforts around the state, is mandated by the electricity relief measures (AB 970) passed by the state legislature last summer. The natural gas investigation was prompted by an emergency request by San Diego Gas and Electric in the midst of the summer's electricity controversy. SDG&E asked to change its gas curtailment rules so the three power plants it serves would be curtailed before large commercial and industrial customers.

SDG&E withdrew its emergency request, which the CPUC showed no sign of approving, last month, but the widespread protests the request drew from merchant generators, environmental groups/agencies and consumer groups raised "a number of questions and issues that require further investigation by this commission," said Richard Bilas, the CPUC commissioner assigned to the utility request.

"We believe an investigation into the adequacy of SoCalGas's and SDG&E's gas transmission systems is warranted," said Bilas, noting that SDG&E since the early 1990s has been contemplating serving the expanded electric generation load south of the border in North Baja at Rosarita Beach.

"We are also extremely concerned that the decision to add load on SoCalGas's and SDG&E's systems may have undermined SDG&E's ability to provide reliable service to its customers," he said before the CPUC voted 5-0 for the statewide study.

CPUC President Loretta Lynch expressed strong support for the investigation, noting "for the first time in almost a decade, California is faced with the potential of insufficient natural gas capacity. This was something that was inconceivable even a few years ago. Certainly the dynamics of the natural gas market have changed as well as the electricity market.

"In this investigation, I certainly intend to take a close look at California's natural gas utility infrastructure to make sure that they continue to meet the increasing demands for natural gas service."

The regulators unanimously passed the electricity investigation, too, although there was one partial dissent from Commissioner Henry Duque, who is concerned that part of the investigation duplicates efforts by the Cal-ISO to bring temporary peaking generation into the state by next summer, and that the CPUC is not acting swift enough on utility requests for bilateral contracts, a side issue of the infrastructure study.

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