FERC Warns of Tight So Cal Gas Supplies, and Risks of Extreme Heat and Fires

20 May 2021

It’s not just California regulators who are worried about the supply of electricity in the state and the West this summer. Federal regulators also are watching resource reliability and potential peak demand. In addition to drought and high wildfire risk, Southern California faces the additional problem of tight gas supplies, according to the Federal Energy Regulatory Commission’s 2021 Summer Assessment released May 20.

It notes that ongoing repairs to Southern California Gas’s Line 4000, which carries 720 million cubic feet per day (MMcfd) of natural gas into the Los Angeles area from the desert, will be out of commission along with Line 3000 May through September. “The transmission outages will likely limit SoCalGas’s access to supply from the Topock/Needles interconnect with Transwestern Pipeline Company.” Aliso Canyon natural gas storage field’s capacity will remain at 34 Bcf. The design capacity of the old storage field is 84 Bcf. It suffered a months-long well blowout five years ago, releasing huge amounts of methane.

In addition, increased competition for gas supplies is expected to raise prices in both Southern and Northern California from June through September. PG&E Citygate prices, for example, are up 39%, or $1.07/MMBtu above summer 2020 futures prices as of March 10.

The summer assessment also warns that extremely low snowpack levels in California that are melting earlier “may reduce available hydropower this summer but could be partially offset by power imports from the north, where snowpack levels are above those in California.”

State energy regulators and California’s grid operator expect to see about 4,000 MW of additional resources come online this summer. Of that amount, 1 GW is battery storage. Solar is expected to provide 22% and wind 9% of the California Independent System Operator’s capacity. There also is another 100 MW of additional gas power from plant upgrades.

The grid operator also is seeking federal regulatory approval for two reliability must-run contracts. One is with the 250 MW Midway Sunset and the other is with the 34.5 MW Kingsburg Cogeneration plant. RMR contracts are controversial because of their high price tag.

Sparring over pipeline GHG impacts

Earlier in the meeting, Commission Chair Rich Glick and Commissioner James Danly had a very heated debate over the role of greenhouse gas emission impacts of natural gas pipelines. Before FERC were two gas pipeline projects. Danly introduced a last minute amendment that stated the decisions do not set precedent.

Glick and Commissioners Neil Chatterjee and Allison Clements were outraged by the last minute amendment.

Chatterjee said that when he worked in the Senate, he and his colleagues engaged in similar acts, but that FERC is a regulatory body that is not supposed to engage in like political acts. “This is not a game,” he said.

Danly insisted that the commission was acting beyond its statutory authority.

In spite of the objections, the amendment was approved 3-2 for the two natural gas pipelines proposed by companies in Nevada and Minnesota. Glick, Danly and Commissioner Mark Christie voted to include the amendment.

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