Western Undeterred By Grueling Regulatory Process
Expressing frustration but continuing its resolve, Texas-based
Western Hub Properties is ironing out some "technical issues" of
financing with California regulators and now expects to start
construction in February on its delayed Lodi gas storage field in
The merchant storage project will be operating by this time next
year, said Western Hub's California-based manager, Jim Fossum, who
added that with faster approvals, the project could have been in
service during this summer's electricity generating crunch and the
current gas and power shortages.
Despite the regulatory struggle, he said the company still plans
to go through with its other California storage project near
Bakersfield and the natural gas hub called Wheeler Ridge. Western
has acquired leases on the property it needs and will start more
detailed engineering of the proposed site over the first three to
six months of next year. The company intends to make a filing with
state regulators in summer of 2001.
In both the approved Lodi project and the proposed Wheeler Ridge
storage field, Western is not concerned about lining up customers,
said Fossum. The projects are not contingent on contracts, he said.
"Now that we are a bona fide (certified plant) utility under the
California Public Utilities Commission, we are getting some
technical things worked out with the commission staff and nailing
down the last small pieces of property, Fossum said. "Everything is
basically ready to go at Lodi"
"We have to file with them documents that verify certain aspects
of the project's financing. We can't move ahead with the financing
until the CPUC approves it.
"If we had not encountered all of the roadblocks that we have
had, we could have helped with the problems this last summer, and
we could be helping with problems right now." He added that the
project would not be operational in time to have any impact on the
upcoming summer electricity demand and corresponding heavy natural
gas demand to fuel power plants.
Lodi and the Wheeler Ridge storage project are being designed as
high-deliverability storage facilities. Lodi will have about 9 Bcf
of working capacity, building to 12 Bcf. Initially, Fossum said,
Lodi should have about 400 MMcf/d injection capability and 500
In the southern half of the state, Western for some time has
been doing reservoir studies near Wheeler Ridge and now has a
"couple of reservoirs that we think might work," Fossum said.
"We're in the preliminary planning phase."
The Wheeler Ridge project would have an ultimate working
capacity of 12 to 16 Bcf and similar 500 MMcf/d deliverability at
its peak. He said Western hopes to have something operational in
the Wheeler Ridge area by the end of 2002.
Richard Nemec, Los Angeles
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