Challenge to CPUC ‘Hot Gas’ Standards Advances

By Published On: May 18, 2007

A lawsuit over state standards on the quality of natural gas – including liquefied natural gas – may now be heard in the Second District California Court of Appeal. The legal move occurred May 11 when the California Supreme Court turned down a request by the California Public Utilities Commission and state gas utilities to assert its jurisdiction over a lawsuit contesting the standards for imported liquefied natural gas. Los Angeles-area air-quality regulators and environmental groups have asked the court to set aside the so-called hot gas standards, claiming that they are too lax and would increase air pollution. “We are pleased that the ‘hot gas’ case will proceed in the Court of Appeal,” said Sam Atwood, South Coast Air Quality Management District (SCAQMD) spokesperson. Southern California Gas and San Diego Gas & Electric supported the CPUC position that the Supreme Court should assert jurisdiction over the case, said Denise King, a spokesperson for the two utilities. Meanwhile, as the litigation proceeds, she said the utilities are trying to work out an agreement with SCAQMD to prevent “the narrowing of the gas quality specifications.” Gas utilities could deliver cooler-burning, less polluting liquefied natural gas to their customers “by injecting nitrogen into hot gas or blending hot gas with lower-heat-content domestic gas,” explained Atwood. Early this year, SCAQMD challenged standards set by the commission. They would accommodate imports of liquefied natural gas into California by allowing it to have higher levels of ethane, propane, and butane than traditional domestic pipeline gas (Circuit, Sept. 22, 2006). Unless treated, as advocated by air pollution regulators, the hotter-burning LNG could produce more nitrogen oxides, which form ozone and fine particulates in the air. Some end users, such as power plant owners, fear that a difference in gas quality may affect their machinery. Now that the Supreme Court has decided to leave the case with the appellate court, SCAQMD and environmental groups feel more confident that their arguments will be heard, said Bill Powers, Border Power Plant Working Group co-chair. The group is a member of Ratepayers for Clean Affordable Energy, which has joined in the suit against the CPUC standards. The next step will be for the appellate court to decide whether to actually consider the case, an attorney for the ratepayer group said.

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