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Calif. regulators working to ensure energy reliability given Aliso Canyon impacts

Californiaregulators are juggling a number of priorities in trying to ensure reliableelectricity and natural gas service following the limitations placed on theAliso Canyon natural gas storage facility.

AlisoCanyon is the "leading gas resource" for Southern California,California Public Utilities Commission member Catherine Sandoval said July 24during a discussion at the National Association of Regulatory UtilityCommissioners summer meeting in Nashville, Tenn. The Los Angeles basin hasabout 9,800 MW of natural gas-fired generation. About 75% of the 'sgas-fired capacity is supplied by Aliso Canyon resources, as is about 70% ofthe gas-fired capacity controlled by the California ISO, Sandoval said.

Aleak within the storage facility was capped in February, but the facility nowonly holds about 15 Bcf of natural gas out of a capacity for more than 86 Bcf,Sandoval noted. In April, the ISO and other state officials warned thatCalifornia could face service curtailments and because of the reducednatural gas availability.

"Itis our sincere hope we get through this year without blackouts," she said,adding that the state's highest electricity demand typically comes in Septemberor October.

ThePUC and other state agencies have taken a variety of measures to maintainreliability, Sandoval said. Among them is prudently using the gas resourcesavailable. LADWP, for example, has imported more power from outside SouthernCalifornia to lessen demand on its gas-fired resources and, during a recent hotspell, got a waiver to use older, diesel-fueled resources, she said.

In aperhaps-unexpected tie-in to the 2014 polar vortex that affected the U.S.Northeast and Mid-Atlantic, Sandoval said tariff changes have been made todiscourage suppliers from sending gas to other regions with weather-drivenspikes in demand and prices by allowing both short-term and long-term contracts.

Addressingthe reliability concerns has prompted a good deal of coordination andcooperation, Sandoval said, with electric and gas utilities working together toput system needs ahead of individual economic opportunities. State regulatorshave also worked with utilities and agencies outside their jurisdiction, suchas LADWP and port authorities.

Regulatorshave also taken several steps to reduce electricity and natural gas use throughenergy efficiency, demand response and distributed energy efforts, including avote in June directedat all three of the state's investor-owned utilities but particularlySouthern California Edison Co.,an Edison Internationalsubsidiary.

In alater vote in June, the PUC adopteda proposal by Sandoval that specifically covers distributed energy resourcesthat addresses, among other things, interconnection policies for renewableresources and the tying of renewables to storage. Solar, California'snow-predominant renewable energy resource, slows production after about 4 p.m.,she said, while the state's peak demand hours have shifted from mid-afternoonto between 4 and 9 p.m.

ThePUC has accelerated demand response programs such as one that allows utilitiesto cycle off air conditioners, but "pretty soon, we're going to have tolook beyond air conditioning," Sandoval said. For example, in wintermonths, demand for natural gas increases for home heating, though sheacknowledged that demand is not as high as in the Northeast or Mid-Atlantic.

subsidiary ownsand operates the Aliso Canyon facility.