CPUC Delays LA County Gas Hookup Moratorium

10 Jan 2018

Updated Jan. 11, 2018.

Strong opposition from local businesses and elected officials pushed the California Public Utilities Commission Jan. 10 to postpone enacting a gas hookup moratorium in Los Angeles County for new commercial and industrial buildings through the end of March.

Fearing gas shortages because of outages of three pipelines that supply the area, plus diminished storage capacity at the SoCal Gas Aliso Canyon natural gas storage facility after a massive methane leak two years ago, the commission proposed the moratorium last month. It planned to vote Jan. 11,  but the item was included on the hold hold list by CPUC President Mike Picker for “further review.”

Los Angeles County Supervisor Kathryn Barger urged the commission to reject the proposed moratorium late last year.

Barger was joined by the Building Industry Association of Southern California, the Valley Industry & Commerce Association, and the Contract Cities Management Association.

“Preventing new usage of gas will directly impact future industrial and commercial development – eliminating customer choice for energy service, increasing energy costs and creating economic hardship,” the Valley Industry & Commerce Association told the CPUC in a comment letter.

According to the association, the moratorium would delay some 700 new business projects from opening, including healthcare facilities. The new facilities, it said, will employ thousands of people.

The moratorium, wrote Marcel Rodarte, Contract Cities Management Association executive director, “is a clear sign that someone [at the CPUC] missed Economics 101 the day the professor taught about supply and demand.” Rodarte urged the commission to focus on increasing the gas supply instead of restricting access to gas.

He also pointed out that the hookup ban would apply to some projects that include affordable housing. The executive director further questioned whether the CPUC has legal authority to impose a ban on new gas service connections, calling it the purview of local government instead.

SoCal Gas also commented that the moratorium could cause “unprecedented economic harm” in the area.

CPUC officials could not be reached for comment on the proposal, but wound up discussing it at their meeting on Jan. 11.

Commissioner Carla Peterman, whose concerns were echoed by three of the other five who serve on the commission, questioned how much gas would actually be saved by the moratorium and how many projects it would wind up affecting.

CPUC President Mike Picker, who backed the moratorium, acknowledged that it might not save as much gas as initially thought.

Meanwhile, the commission’s voting delay also came after its own staff on Jan. 9—along with the California Energy Commission, California Independent System Operator, and Los Angeles Department of Water & Power— downgraded their earlier assessment, which raised the prospect of gas shortages this winter.

The latest assessment by the agencies says that due to a warm winter so far “the risk of gas service curtailments in January appears to be significantly reduced.” Meanwhile, the National Weather Service continues to forecast a warmer than normal winter in the area.

—William J. Kelly

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