Given the events in Japan and last September's fatal natural gas pipeline rupture in California, residents in and around California state's capital are stirring up eleventh-hour doubts about a proposed underground gas storage facility south of their city. Some Sacramento residents will not accept a final environmental report listing as remote the chance of a leak or accident at the proposed facility.

Sacramento city officials are seeking assurances that in the event of a potential disaster the city will have sufficient funding and resources to respond on the ground. The project backers contend they have assured the city for the past three years they will help pay for any "gaps in services."

In October 2009, the California Public Utilities Commission (CPUC) held a hearing on the Sacramento project, which falls within the city boundaries 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. SMUD relies heavily on gas-fired generation and needs some of the proposed storage capacity (see Daily GPI, Oct. 15, 2009).

The 379-acre project is being considered by a CPUC administrative law judge who is expected to recommend a decision for the five-member regulatory panel this spring. Backers also need to obtain a special-use permit from the city, which so far has not taken a position on the proposed facility, most of which lies underneath 700 homes.

Many of the homeowners long ago accepted $500 "signing bonuses" and the promise of annual payments from the storage operator in exchange for giving up their rights to oppose the project. Others have remained opposed within a local property owners association.

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, in the past has indicated to NGI that he was facing skeptical residents with concerns based on the initial 800-page draft environmental impact report (EIR). Sacramento's city attorney in a filing in February urged the CPUC to require more mitigation measures in the final EIR.

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