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CPUC blocks Sempra utilities' $621M North-South gas pipeline project

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CPUC blocks Sempra utilities' $621M North-South gas pipeline project

The California Public Utilities Commission shot downSempra Energyutilities' proposed North-South gas pipeline expansion project.

The CPUC concluded that there were a number of other viableoptions that would be far less costly to ratepayers but could provideequivalent reliability improvements, agreeing with an administrative law judge'sApril recommendations.

Southern CaliforniaGas Co. and San DiegoGas & Electric Co. had wanted to build a $621.3 million projectcomprising new pipe and additional compression. The utilities argued that theproject would improve gas reliability in Southern California by betterconnecting the Honor Rancho gas storage field with the rest of the companies'gas system.

The CPUC agreed that the utilities had shown that theirsouthern system needs to be more reliable, but the commission said they failedto show that the North-South project specifically would be the best way toaccomplish that goal.

The commission noted that SoCalGas' "weakened" the case for the North-South pipeline. The multi-monthleak cut into the amount of stored gas in the northern part of the companies'system, making even less fuel available for transportation to the southern partof the system.

"The leak at Aliso Canyon underscores a fundamentalweakness of the application, namely, that construction of the North-Southpipeline would bring no additional gas into southern California but merelyprovide a means for reallocation of existing supply," the decision said.

The CPUC could use other tools, such as energy storage andefficiency pushes, to improve reliability without adding more gas, the decisionsaid.