Michael Shaw

Aliso Canyon report paints dark picture for L.A. energy

By Michael Shaw, VP, Government Relations

Capitol Update, April 8, 2016 Share this on FacebookTweet thisEmail this to a friend

Several state agencies that deal with aspects of California's energy policy and planning process jointly developed a report that indicates customers in the L.A. Basin could face upwards of 14 days of electrical service disruption in the coming summer as well as curtailment of natural gas deliveries into next winter.

In October 2015, Southern California Gas (SoCalGas) reported that a well at the Aliso Canyon Natural Gas Storage Facility in northern Los Angeles county had failed leading to the accidental release of a significant amount of methane. The leak took nearly four months to plug and led many residents of the Porter Ranch community to leave the area temporarily.

A number of legislative bills followed that would impose restrictions, or outright bans, on natural gas storage at Aliso Canyon as well as statewide. CMTA advocated for responsible policy that ensures public safety and energy reliability for this critical area of the state. Governor Jerry Brown, through his agency with oversight of natural gas and oil wells, began a process to develop safe, timely steps to inspect and restore the facility to operation as quickly as possible.

The report, known as the Aliso Canyon Action Plan, describes the critical nature of this facility to the natural gas and electricity picture in much of Southern California and most specifically the greater L.A. Basin. The plan lays out a number of steps to address the possibility of the facility not being available this summer or the coming winter. However, a key element of the plan places a significant burden on noncore natural gas customers, including large industrial users and refineries, by requiring them to predict exactly how much gas they will use each day and stay within a narrow five percent margin regardless of operational changes.

This "daily balancing" requirement, already filed with the California Public Utilities Commission by SoCalGas, would impose a 150 percent penalty if the customer's natural gas use was outside the five percent margin. CMTA's Energy Committee filed comments in mid-March criticizing the imposition of the proposed rules due to their significant financial impact.

CMTA will be present Friday, April 8th in Woodland Hills for the Aliso Canyon Action Plan workshop hosted by the state energy agencies. As one of only a couple large energy user representatives on the agenda, CMTA will provide a strong voice for manufacturers who stand to face severe impacts from reductions in natural gas deliveries and reliable electricity supplies.

Please contact Michael Shaw at mshaw@cmta.netwith questions or information about the impacts to your company. 

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