A California regulator late Thursday proposed that the state regulatory commission abandon the long-standing, now outdated, Southern California Gas Co. unbundling settlement for its in-state transmission pipeline and storage system.

Sempra Energy’s SoCalGas utility and all the major stakeholders wrote to the California Public Utilities Commission recently urging that the much-delayed implementation be dropped in lieu of the new statewide natural gas investigation just getting under way, a SoCalGas manager told an industry conference in Long Beach Thursday.

Noting that there clearly is a “benefit to adding non-traditional supplies,” such as liquefied natural gas (LNG) to SoCal’s 3.875 Bcf/d backbone pipeline system (with a storage capability that pushes its peak-load throughput to more than 6 Bcf/d), Beth Musich, LNG program manager for the Sempra utility, said that the ongoing CPUC gas investigation will address the unbundling of SoCal’s transmission/storage system and the need for a “simple system of firm trade-able capacity rights” flowing from the interstate pipelines to the burner-tip.

“(A trade-able rights system) doesn’t exist for us today,” Musich said. “Right now, who gets into our system is set by the upstream, interstate pipeline. We send the nominations to them, then upstream they confirm whose gas gets sent.”

Also as part of the so-called OIR (Order Instituting Rulemaking) by the CPUC is the integration of new receipt points into the SoCal pipeline system. Potential LNG receiving terminals at Long Beach Harbor or offshore Ventura County or supplies from North Baja will create these points, she said. “The system will provide our customers with the ability to choose their supply source and keep rates competitive (with more gas-on-gas competition).”

Three years after the first state regulatory decision on SoCal’s comprehensive settlement, whose origins date back to 1998, a state regulatory administrative law judge last month released a proposed decision aimed at implementing the basic provisions of the original settlement by April 1. After a tumultuous three to five years during which settlement parties balked at numerous implementation attempts, the judge proposed to close the case.

An implementation order was on the CPUC meeting agenda Wednesday, but the item was held, and following the meeting Commissioner Loretta Lynch issued an alternate order calling for the regulatory commission to vacate its previous orders and deal with the settlement issues as part of the OIR, which calls for some initial filings by the state’s major natural gas distribution utilities next month..

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