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Calif. regulator tells SoCalGas to 'immediately' refill gas storage

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Calif. regulator tells SoCalGas to 'immediately' refill gas storage

The California utility commission told Southern California Gas Co. on March 13 to immediately begin injecting as much natural gas as possible into storage fields to avoid possible service disruptions.

"Given the withdrawals from all storage fields during winter 2017-18 and the limited availability of the Aliso Canyon storage field ... overall storage inventory is critically low," the California Public Utilities Commission said in a March 13 letter to the company.

The CPUC told SoCalGas to immediately draw up a comprehensive plan for refilling the utility's three non-Aliso fields — Playa del Rey, Honor Rancho and La Goleta — which have a total capacity of almost 53 Bcf. In early March, SoCalGas said it had about 28.2 Bcf of gas left in storage.

The Aliso Canyon underground gas storage field is the biggest SoCalGas storage facility but has been under heavy restrictions since it experienced a leak from October 2015 to February 2016. California regulators have imposed limits on how much gas can be injected into the field — 24.6 Bcf out of the field's normal 86 Bcf capacity — and instructed SoCalGas to use the field as an "asset of last resort," which only allows withdrawals from the field when there are no other options for getting enough gas into the system.

With depleted storage levels in the wake of uncommonly cool temperatures during the latter part of February and early part of March, the CPUC expressed concern that SoCalGas did not have enough gas to ensure reliability for customers heading into summer, especially if the utility faces high demand levels.

SoCalGas will have to do several things for the CPUC: lay out minimum month-end storage targets for the rest of 2018, starting with May; project how much gas the company will need to procure to ensure system reliability; and estimate how much the utility's gas acquisition department will need to spend to carry out the accelerated injection program. The regulator told SoCalGas to file its plans by March 20.

The CPUC on March 13 also defended the legality and appropriateness of its recent decision to allow SoCalGas to withdraw more volumes from Aliso Canyon on a temporary basis. California state Sen. Henry Stern criticized the CPUC's willingness to allow the utility to use the facility to meet demand, objecting to what he said was a "lack of evidence presented to support this decision, the lack of preparation in anticipation of a winter cold snap, and the lack of transparency behind this decision."

The commission's four-page response letter to Stern said the CPUC made the decision based on the "best data available," with the guidance of public directives and in the interest of preventing disruptions to gas and electric service. SoCalGas, with the CPUC's support, has pushed customers to reduce gas use during the winter, offering tools and rebates to encourage demand cuts.

Gas supply constraints have affected power and gas prices in the region. The CPUC said it is obligated to do what it can to ensure just and reasonable rates for customers.

"The commission continues to review the situation in SoCalGas' service territory and to monitor the utility's efforts to inject gas into the other storage facilities to restore inventories," the CPUC letter said. "Once inventories at those facilities have stabilized and the threat of cold weather has subsided, SoCalGas should not be withdrawing from Aliso unless the other facilities are fully utilized."