A state regulatory judge last Friday indicated that he is recommending that the California Public Utilities Commission (CPUC) give a green light to a proposal to develop an underground natural gas storage field under a residential neighborhood in the southeast corner of Sacramento, but the assigned CPUC member has filed an alternative.

The proposed 379-acre project has drawn its share of opposition locally (see Daily GPI, March 16, 2011). The full five-member CPUC cannot take up the proposal until late April due to the commission's 30-day comment period rules for proposed decisions.

Last Friday, Commissioner Timothy Alan Simon released his alternative and a summary of differences with the recommendation of Administrative Law Judge (ALJ) Richard Smith. Simon is the current chair of the natural gas committee for the National Association of Regulatory Utility Commissioners.

Like the ALJ, Simon also would grant Sacramento Natural Gas Storage LLC approval to build its storage facility, but he would add several financial and philanthropic conditions for the storage developer. Those conditions include additional insurance and surety bond requirements; establishment of a community charitable foundation and modest contributions, educational benefits, parks/recreation development and recruitment of more minority and disabled veteran workers and subcontractors.

The project has been in the development stages for several years, and the environmental impact report (EIR) has been criticized since a CPUC hearing was held nearly three years ago. The 7.5 Bcf facility is proposed for acreage that 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).

Both Smith's proposal and Simon's alternative found the need for the additional gas storage and acceptable mitigation in the EIR. Potential leakage from the repressurizing of the depleted Florin gas field; potential impacts on groundwater quality; and temporary noise pollution at wellhead sites during construction of the project all were cited.

"The proposed project will mitigate the potential risks and consequences of a disruption of natural gas supply to SMUD and [it] advances the state's energy policies," said the ALJ's proposed decision, adding that there are numerous mitigation measures incorporated in the proposed project by Sacramento Gas Storage, which has a contract with SMUD and has provided $500 "signing bonuses" to nearby residents who forfeited their rights to oppose the project.

Besides the SMUD connection, the new storage project will be interconnected with the Pacific Gas and Electric Co. (PG&E) natural gas system.

The storage project would consist of: an underground gas storage reservoir; a wellhead site; a control center and compressor station site; a buried 16-inch diameter gas pipeline (about 3,500 feet long between the wellhead and compression site; and another 16-inch diameter line from the compressor station to transmission pipelines operated by SMUD (Line 700) and PG&E. (Lines 400-401).

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