CPUC Rules Long Beach LNG Subject to State Law

The California Public Utilities Commission voted unanimously to order liquefied natural gas developer Sound Energy Solutions (SES) to submit to state jurisdiction and file an application for a certificate of public convenience and necessity. ?Unlike interstate pipeline regulations by FERC, SES is merely a ?person? subject to the exclusive jurisdiction of this commission in terms of company compliance,? said CPUC attorney Harvey Morris at the commission?s April 22 meeting. The new order also allows the commission to begin investigating the safety and environmental impacts of the company?s planned Long Beach terminal, as well as its potential for market power, prior to putting steel in the ground. The CPUC also voted to seek a rehearing on the Federal Energy Regulatory Commission?s April ruling asserting it has exclusive jurisdiction over Mitsubishi subsidiary SES?s project. FERC?s decision is riddled with ?legal errors,? Morris said. The CPUC insists it has authority over SES and its construction of a terminal because of its potential safety, environmental, and market impacts on Californians (see Circuit , March 26, 2004). The terminal would process 600 MMcfd, totaling 10 percent of the state market and 25 percent of Southern California?s market, according to Morris. CPUC president Michael Peevey said the vote should not be interpreted as assuming California is not pro-LNG. ?The question is where the facility should be sited,? he said. ?Safety should be paramount.? He and the four other commissioners are concerned about building an LNG facility in a densely populated region. Peevey and CPUC member Geoffrey Brown criticized FERC for rebuffing regulators? request to work cooperatively on the siting of the facility. The only way to maintain jurisdiction is to assert local concerns, Brown said. ?There is no question that LNG is a dangerous commodity in the wrong hands.? After the CPUC intervened in the proceeding at FERC on the matter, other state agencies also sought to intervene, including the California Coastal Commission and the South Coast Air Quality Management District. FERC spokesperson Tamara Young Allen said the agency would not respond until it has had time to review the state ruling. CPUC member Loretta Lynch will visit the Long Beach community next week to get input on safety and environmental concerns as well as on whether LNG supplies would crowd renewables out of the market.

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CPUC Rules Long Beach LNG Subject to State Law

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