Law judge rejects SoCal Gas' North-South pipeline
OREANDA-NEWS. April 07, 2016. A California administrative law judge has rejected SoCal Gas' proposed North-South natural gas pipeline, a 65-mile (105 km) line SoCal said it needs to ensure future gas supply to serve San Diego.
The tentative ruling, which is subject to action by the California Public Utilities Commission, said SoCal Gas and San Diego Gas & Electric successfully demonstrated a need for enhanced system reliability on SoCal's southern pipeline system, but failed to show a need for the proposed 36-inch pipeline that SoCal wants to build from the city of Adelanto, California, through the San Bernardino National Forest, to the city of Moreno Valley.
The applicants "have not proven either that gas demand is increasing or that customer supplies are decreasing to such an extent as to pose significant risk to the ability of SoCalGas to meet daily minimum flow requirements using existing tools available to it," the judge said in the proposed decision.
SoCal said the North-South pipeline would add 800 MMcf/d (23mn m?/d)of capacity between its north and south systems, taking supply delivered at the Needles, Kramer Junction, Wheeler Ridge and Kern River Station receipt points or from a storage field at an estimated cost of nearly \\$700mn.
The judge rejected most of SoCal's arguments, siding with customer groups and ratepayer advocates who said less-costly solutions, including baseload contracts and tighter balancing requirements could bolster gas supply on the southern system. The judge said three competing pipeline projects could enhance operation of the southern system at a lower cost and with fewer safety risks than SoCal's North-South Project
SoCal's strongest argument for construction of the pipeline "is that it ensures against such disruptions of supplies coming into California via the El Paso Natural Gas (EPNG) pipeline at Blythe," the judge said. "But even if we accept that argument, it is clear from the record that the alternative physical solutions proposed by TransCanada, Transwestern and EPNG all provide redundant pipeline capacity at a significantly lower cost than the North-South pipeline."
The judge was also unmoved by SoCal's argument that Mexico's growing appetite for gas could result in a drop in supply available to serve consumers and power plants in California's Inland Empire, Imperial Valley and San Diego.
In late 2013, the Sempra utilities asked state regulators for favorable rate treatment for the proposed North-South Project, citing reliability events in 2011 and 2013, increased gas demand for power generation following the shutdown of the crippled San Onofre nuclear station and the need to support California's expanding renewable mandate. Hearings were held last summer.
The CPUC may consider the proposed ruling when it meets in May.