Sempra Energy’s two natural gas distribution utilities received clearance from the California Public Utilities Commission (CPUC) to proceed with seeking approval for off-system natural gas sales over the protests of regional air pollution regulators and power generators. The CPUC concluded that air quality issues had already been considered and could not be revisited in the current proceeding.
The bigger issue of off-system delivery to various interconnection points is still to be resolved by state regulators.
Sempra’s Southern California Gas Co. and San Diego Gas and Electric Co. previously obtained the regulators’ approval for expanding their interruptible and firm off-system gas deliveries to neighboring private-sector utility, Pacific Gas and Electric Co. (PG&E). In response, the South Coast Air Quality Management District (SCAQMD) and the Southern California Generation Coalition (SCGC) raised air quality, gas quality and other environmental issues.
Included in the challenges was the global gas heating value measure, the Wobbe Index, which the CPUC had made part of its liquefied natural gas (LNG) ruling in September 2006, and the SCAQMD challenged in January 2007. Under the rules adopted by the CPUC, the Wobbe Index for any imports would be capped at 1,385, a compromise over a 1,400 level recommended by Sempra’s two utilities, whose limit at the time was 1,437 (see Daily GPI, Sept. 22, 2006).
If the CPUC approves off-system deliveries at points on the Sempra transmission pipeline system other than ones with PG&E, transportation customers of the two utilities would be able to send gas supplies to east-of-California customers. Separate protests were filed by SCAQMD and SCGC to this proposal.
Part of the protest was that the Sempra utilities will use the expanded authority so ship more of their parent company’s LNG from its North Baja receiving terminal in Mexico into the Southern California basin, backing out less-polluting southwestern U.S. supplies and putting more of the nitrogen oxide-rich LNG supplies in circulation in the state.
Now that it has decided that the air quality legal challenges cannot be revisited, the CPUC is ready to take on the larger issue of opening off-system deliveries widely on the Sempra system.
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