California regulators have taken steps to smooth the way for thestate’s first merchant underground natural gas storage field, thefirst wells for which are being drilled beginning this week about50 miles north of Sacramento in a depleted dry gas field in ruralnorthern California.

Wild Goose Storage is drilling four initial wells – one verticaland three horizontal – and is on target to begin operations inApril of next year, according to Paul Amirault, vice president ofbusiness development for the facility’s owner, Alberta Energy western Canada. He said the project has all of its requiredregulatory and environmental permits.

The administrative clean-up issues dealt with by the CaliforniaPublic Utilities Commission June 18 involved whether themarket-based storage field should be required to have a cost-basedminimum rate and pay the costs of future upgrades of Pacific Gasand Electric’s transmission pipeline facilities connected to thestorage field.

In both cases there were no additional requirements placed onthe state’s first nonutility storage field, Amirault said. WildGoose will file a minimum rate only as a formality, and it will notbe closely examined by regulators, Amirault said. The issue of whopays for upgrades will be worked out in the future, if facilityexpansion is required.

For now, both PG&E and Wild Goose agree there is amplecapacity on PG&E’s transmission pipeline (Line 167) that willbe connected to the storage field by a four-mile pipeline built bythe storage field backers. Wild Goose expects initially to offer 14Bcf of inventory capacity, with firm withdrawal capability of 200MMcf/d and injection capability of 80 MMcf/d.

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