CPUC Ought to Set a Date for Closing Aliso Canyon
A proposed choice on the gasoline facility offers an excessive amount of deference to SoCalGas concerning the way forward for gasoline demand and misses a possibility to set a transparent mandate.
The Aliso Canyon gasoline storage facility blowout in 2015-16 was the biggest methane gasoline leak within the historical past of the USA. Along with the local weather results from the methane leakage — 109,000 metric tons, the equal of burning over 1 billion gallons of gasoline — there have been large well being impacts on neighboring communities and even all through California. In 2019, Governor Gavin Newsom known as on the California Public Utilities Fee (CPUC) to speed up the closure of Aliso Canyon. Nevertheless, following excessive gasoline costs within the winter of 2022-23, the CPUC permitted Southern California Gasoline Co. (SoCalGas) to as a substitute increase the quantity of gasoline saved at Aliso Canyon.
Now, the CPUC has issued a proposed choice that (if finalized) will preserve Aliso Canyon open till statewide peak gasoline demand falls under a prescribed stage that may be met with different assets. On this kind, the proposal misses the mark.
The pure gasoline saved in Aliso Canyon may be withdrawn throughout instances of excessive demand, to be used by electrical energy mills and by direct gasoline shoppers. Within the proposed choice, the CPUC finds that Aliso Canyon’s gasoline storage is at the moment wanted to assist mitigate worth spikes for each electrical and gasoline prospects however leaves open the potential for closing the ability after gasoline demand declines, in accordance with assembly California’s local weather objectives. After a requirement forecast reveals projected peak demand remaining under a particular threshold, a continuing may be opened to probably shut the ability.
The proposed choice is probably going appropriate that gasoline demand (for each direct finish makes use of and electrical energy era) is such that the state isn’t ready to close Aliso Canyon down instantly, particularly within the context of rising concern about power payments in latest months. There does look like proof that Aliso Canyon can, and has just lately, prevented worth spikes throughout instances of maximum demand, most notably throughout days of maximum chilly.
Nevertheless, the proposed choice offers solely an excessive amount of credence to SoCalGas’s assertions and modeling concerning future gasoline use; minimizes and ignores impacts to native communities; and misses a possibility to set a transparent deadline and mandate for closure of the ability.
The proposed choice does communicate usually concerning the purpose of transitioning away from reliance on gasoline towards renewable and electrified alternate options, nevertheless it fails to set a transparent deadline for Aliso’s closing, as a substitute ruling that the “choice to shut Aliso Canyon completely requires a exhibiting of long-term and constant pure gasoline demand discount in order that reliability and simply and cheap charges should not in danger.” As an alternative, the proposal would require monitoring “progress towards lowering peak day gasoline demand” and lowering the allowed storage at Aliso by means of an “incremental course of” involving biennial experiences from CPUC employees. The proposed choice units a selected threshold of peak day gasoline demand (4,121 MMcfd) utilizing the California Gasoline Report, counting on the CEC’s course of for evaluation. The choice additionally leaves open the potential for even rising storage limits at Aliso, if an financial evaluation finds that worth spikes are doubtless. The proposed choice dismisses arguments from environmental justice and neighborhood advocates — in addition to Southern California Edison — arguing that Aliso Canyon isn’t wanted now (or is probably not wanted by 2027).
On the entire, the proposal offers an excessive amount of deference to SoCalGas’s positions and factual assertions on the long run state of gasoline demand. Notably, SCG has truly reversed course on its projections for gasoline demand between the 2022 and 2024 California Gasoline Reviews, projecting in 2022 that gasoline demand in SoCal would lower at an annual price of 1.5 % from 2022 to 2035, whereas extra just lately projecting an annual decline in gasoline demand of solely 0.7 % between 2024 and 2040, regardless of a big enlargement in constructing decarbonization insurance policies between 2022 and 2024. (Evaluate 2022 report at 115 with 2024 report at 104). SoCalGas’s gasoline demand modeling ignores the equipment emissions requirements that California air companies have dedicated to adopting, that are anticipated to dramatically cut back gasoline demand as soon as applied.
In the meantime, as compared, PG&E extra fairly projected a bigger lower in gasoline demand in its more moderen report, reflecting key insurance policies that may affect gasoline demand, just like the California Power Code and zero-emissions equipment guidelines (projecting 2.5% annual decline in gasoline demand from 2022 to 2035 within the 2022 report, at 48, rising to a 3% annual decline from 2024 to 2040 within the 2024 report). (Evaluate 2022 report at 48 with 2024 report at 38).
If the CPUC adopts this proposed choice and depends on any such self-serving modeling from SoCalGas in different proceedings, will probably be permitting SoCalGas to bury its head within the sand, ignoring the adjustments which might be on the horizon as our state decarbonizes and electrifies. On this case, the hurt will likely be primarily be borne by the native communities close to Aliso who’ve suffered from ongoing well being and security results for years. Although there are large native fairness harms, there are at the least some countervailing systemwide advantages. There’s at the least cheap proof that Aliso could assist alleviate worth spikes for ratepayers on each the electrical and gasoline aspect systemwide, and Aliso Canyon has already been constructed and its capital prices have been included into charges. (Although the CPUC should stay vigilant to make sure there’s not market manipulation on gasoline costs that might lead to windfalls to SoCalGas and different stakeholders.)
Nevertheless, if the CPUC defers to equally skewed evaluation from SoCalGas in different price circumstances or gasoline planning proceedings, the hurt will likely be way more sweeping. For instance, if the CPUC makes use of the overly optimistic gasoline utilization projections from SoCalGas in deciding whether or not to approve new pipelines, that might lead to overinvestment, which might drive up gasoline payments for ratepayers all through the state. In these circumstances, along with the native well being and security harms, in addition to the broader local weather impacts, there would even be harms to all gasoline customers’ power payments. And, certainly, SoCalGas does look like inflating its gasoline demand projections in different proceedings as effectively (see, e.g., stakeholder feedback within the pending Sempra price case).
Total, whereas the short-term consequence (momentary continued operation of Aliso) might be cheap, it might be preferable if the CPUC set a clearer dedication to closing the ability, ideally by a date sure. Of broader concern is the large deference the proposed choice offers to SoCalGas’s evaluation and assumptions about the way forward for gasoline use. Stakeholders might want to stay vigilant to make sure that the CPUC doesn’t grant equally unbridled deference to SoCalGas in different proceedings.