CA Public Utilities Commission proposal could close Aliso Canyon gas storage site

The California Public Utilities Commission Wednesday released a proposal that calls for biennial assessments of appropriate gas levels at the Aliso Canyon Natural Gas Storage Facility in Porter Ranch, and sets a usage-demand level that could trigger the site's closure.

Many residents in the area have been clamoring for the closure of the Southern California Gas Co. facility, the site of the largest gas leak in U.S. history. The proposal released by the CPUC Wednesday acknowledges the "downward trajectory" of demand for natural gas in the state, and for the first time it sets a demand level which, when reached, would trigger a proceeding to consider the possible permanent closure of the facility.

But the target level of 4,121 million metric cubic feet per day (MMcdf) may not be reached until 2030.

According to the CPUC, the 2024 California Gas Report forecasts peak demand this year at 4,618 MMcfd, and it is projected to fall to 4,197 MMcfd in 2030.

"When the peak demand forecast for two years out decreases to 4,121 MMcfd and the biennial assessment shows that Aliso Canyon could be closed without jeopardizing reliability or just and reasonable rates, a proceeding will be opened to review the conclusions of the assessment and address any relevant issues related to permanent closure and decommissioning," according to the CPUC.

Under the proposal, the CPUC will issue biennial assessments beginning in June 2025 with a recommendation for the appropriate storage level at Aliso Canyon, based on trends in demand and reliability. If the assessment recommends a reduction in capacity, SoCalGas would be "required to file an application for the CPUC to review this recommendation in a formal proceeding."

The proposal notes that based on current demand, Aliso Canyon "is currently needed for natural gas and electric reliability and cost containment."

The CPUC is expected to consider the proposal at its Dec. 19 meeting.

The Aliso Canyon leak began Oct. 23, 2015, and wasn't capped until mid- February 2016. Nearly 100,000 tons of methane and other substances were released into the atmosphere over 118 days. Thousands of residents were forced from their homes.

The CPUC last year announced a $71 million settlement with SoCalGas over the leak

In September 2016, SoCalGas pleaded no contest to a misdemeanor count of failing to immediately report the gas leak. Three other misdemeanor charges - - one count of discharging air contaminants and two more counts of failing to report the release of hazardous materials - were dismissed as part of the deal.

Under its $4 million settlement agreement with prosecutors, SoCalGas was required to install and maintain an infrared methane monitoring system at the Aliso Canyon site - estimated to cost between $1.2 million and $1.5 million - and to retain an outside company to test and certify that the monitoring system and real-time pressure monitors to be placed at each gas well are working properly.

The agreement also mandated the hiring of a half-dozen full-time employees to operate and maintain the new leak-detection systems 24 hours a day at a cost of about $2.25 million over three years.

The agreement also called for the company to revise and adopt new reporting policies for actual and threatened releases of hazardous materials to the appropriate agencies, and mandated training courses on proper notification procedures for all of the utility's employees who work at natural gas storage facilities within Los Angeles County.