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CA Regulators’ 2014 Focus on Pipe Safety, Replacing Nuke Power

California regulators start the new year with a focus on two areas: gas pipeline safety issues continuing since the San Bruno transmission line failure and explosion three years ago (see Daily GPI, Sept. 13, 2010), and how to deal with the closure of the San Onofre Nuclear Generating Station (SONGS) in Southern California (see Daily GPI, June 10, 2013).

A final decision on the proposed $2.25 billion San Bruno penalty (see Daily GPI, June 7, 2013) for Pacific Gas and Electric Co. (PG&E) could come in the spring, according to Michael Peevey, president of the California Public Utilities Commission (CPUC).

Replacing SONGS' 2,200 MW in Southern California's heavily populated load center and determining who pays for the cost of the nuclear plant's decommissioning are overriding issues in the start of what will be a long regulatory process at the CPUC, said Peevey as part of a year-end report in the Los Angeles Times on the final day of 2013. It’s no secret that natural gas has emerged as part of the controversy surrounding SONGS' closure (see Daily GPI, Dec. 23, 2013).

While the question of how much SONGS' closure and related costs its majority owner/operator Southern California Edison Co. is permitted to collect from captive utility customers is a long way from being resolved, the decisions on how much, if any, new gas-fired generation are proving equally contentious.

A preliminary plan outlined last fall among the CPUC and other state agencies dealing with energy policy called for half of the replacement power for SONGS to come from new gas-fired generation and the rest from renewable energy and energy efficiency. At the CPUC's final business meeting of 2013, however, Peevey and his four colleagues were bombarded by community representatives who expressed opposition to any new gas-fired plants.

Regarding PG&E and pipeline safety, Peevey has said a preliminary decision on the controversial multi-billion-dollar penalty will be issued in February by the administrative law judges in the CPUC regulatory proceedings that have been ongoing for more than a year. After a comment period, the proposal will go to the five-member CPUC in March or April, Peevey said.

Since San Bruno, safety issues and the state's extensive gas transmission and distribution system are a much bigger part of the CPUC's focus, Peevey indicated. He also pointed out that pushing renewable energy use for power generation ultimately to the 50% level and reducing greenhouse gas emissions are the ultimate goals.

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