Public Interest Advocates Urge CA Attorney General and LA City Attorney to Investigate Natural Gas Supply Manipulation To Justify Reopening Dangerous Aliso Canyon Natural Gas Storage Facility

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Jan 25, 2017, 12:21 ET

SANTA MONICA, Calif., Jan. 25, 2017 /PRNewswire-USNewswire/ -- Consumer Watchdog, Food & Water Watch, and Bill Powers of Powers Engineering today urged CA Attorney General Xavier Becerra and LA City Attorney Mike Feuer to open an investigation into allegations that Southern California Gas is manipulating natural gas supplies to justify the premature reopening of the Aliso Canyon natural gas storage facility that suffered the biggest methane well blowout in US history.

"As you know, making material misrepresentations to game an energy market can constitute an unfair business practice," the groups wrote. "We urge you to investigate such abuses by Southern California Gas, which alleges that it must draw from Aliso Canyon because of the weather, implying increased demand and lack of supply when, in fact, there is ample, cheap natural gas available via pipelines. We also believe that you need to look into the conduct of Kinder Morgan that manages the pipelines and is under current investigation by the Federal Energy Regulatory Commission for inflating the price of natural gas."

Read the letter here:
http://www.consumerwatchdog.org/resources/lettertobecerrafeuersocalgas1-24-17.pdf

The letter pointed out that state regulators (the PUC, California Energy Commission, Independent System Operator) and the LA Department of Water and Power put out a summer power reliability plan that threatened 14 days of blackouts that never happened, in large part because of effective mitigation measures that were extended indefinitely based on the regulators' view that the measures were working.

"Among those measures was ordering utilities to closely balance supply with demand via pipeline deliveries, rather than balancing on a monthly basis as was the practice with Aliso Canyon in operation in the past," the letter said.

"We believe that the utility is ignoring such mitigation measures, especially the measures that require close balancing of pipeline supply with demand, in order to create an inescapable need to withdraw large volumes of gas from storage facilities," the letter continued.

"SoCalGas issued a warning of shortages on December 18 and again on January 22 when gas demand is actually forecast to be relatively moderate compared to historic SoCalGas peak winter demand days. In fact, the utility projects a peak far lower than SoCalGas stated it could handle before having to turn to Aliso in the regulators' winter action plan. But we find that SoCalGas is allowing supply and demand to get way out of balance.

The US Energy Information Administration shows that SoCalGas is keeping its orders for natural gas pipeline deliveries flat – and planning to reduce them significantly this week- while demand is increasing with the colder, wet weather.

At the same time, SoCalGas's own data shows they are forecasting a big jump in demand for each day this work week, but the utility is not planning on increasing pipeline gas supplies. In fact, it will transport less gas via pipeline as the week wears on, while increasing how much it withdraws from storage from its other Southern California storage facilities to make up for the shortage.

The utility's gas supply deliveries will be 30 percent lower than demand by Thursday this week. SoCalGas is violating several winter mitigation measures that regulators put in place to ensure that the area can meet demand with no need for Aliso at all. In doing so, the company is creating the misimpression of a shortage where none exists in order to make the case for its business objective: keeping Aliso open."

SOURCE Consumer Watchdog