With the economic viability of added underground natural gas storage in California already verified by utility and merchant developers currently pursuing proposals, state regulators later in October will hold a one-day hearing on a unique, urban-based storage project in the heart of the state capital, Sacramento. The California Public Utilities Commission (CPUC) will use the public input as part of its ongoing review and environmental assessment.

Separately, the CPUC is getting close to approving a major new independent storage project, Gill Ranch, a 20 Bcf capacity project in the northern end of the San Joaquin Valley west of Fresno. It is a collaborative project headed by a unit of Portland, OR-based Northwest Natural Gas and San Francisco-based Pacific Gas and Electric Co. (see Daily GPI, Aug. 5).

Rick Daniel, the president of Northwest Natural Gas Storage, told a gas industry meeting in Irvine Tuesday that the CPUC should give the go-ahead for the project later in October, and in any event he expects to have the facility operating by August next year.

The CPUC's Oct. 27 hearing will deal with the request from Sacramento Natural Gas Storage for approval to construct and operate the storage facilities within the City of Sacramento and partly within an adjacent unincorporated area of Sacramento County, all of which is served by the Sacramento Municipal Utility District (SMUD), a countywide public power entity.

Sacramento Natural Gas Storage has a contract with SMUD, which relies on a lot of gas-fired generation. SMUD needs some of the space in the proposed 7.5 Bcf facility in the old Florin Gas Field under what is now a park and industrialized area in the south portion of the state capital (see Daily GPI, April 15).

Unlike the other independent storage projects in Northern California that were developed under undeveloped former gas field properties, Sacramento Natural Gas Storage is having to obtain leases from hundreds of residential and other property owners. While many have signed up, there is still organized opposition in the community as residents raise concerns about safety and environmental issues.

So far residents living on a portion of the surface of the proposed 379-acre storage facility are voicing concerns. Jim Fossum, the project's president and a former project manager for Texas-based Western Hub Properties, which built the Lodi Underground Storage Project in an abandoned gas field south of Sacramento, indicated to NGI earlier in the year that he was facing skeptical residents with concerns based on the 800-page draft environmental impact report that is circulating on the project.

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