BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA

Order Instituting Investigation pursuant to Senate Bill 380 to determine the feasibility of minimizing or eliminating the use of Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electric reliability for the region.

Investigation 17-02-002 (Filed February 9, 2017)

THE PROTECT OUR COMMUNITIES FOUNDATION OPPOSITION TO THE PETITION FOR MODIFICATION OF D.20-11-044 BY THE INDICATED SHIPPERS

Tyson Siegele Energy Analyst The Protect Our Communities Foundation 4452 Park Blvd. #309 San Diego, California 92116 Email: tyson@protectourcommunities.org

Dated: June 28, 2021

FILED06/28/2104:59 PM

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BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA

Order Instituting Investigation pursuant to Senate Bill 380 to determine the feasibility of minimizing or eliminating the use of Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electric reliability for the region.

Investigation 17-02-002 (Filed February 9, 2017)

THE PROTECT OUR COMMUNITIES FOUNDATION OPPOSITION TO THE PETITION FOR MODIFICATION OF D.20-11-044 BY THE INDICATED SHIPPERS

Pursuant to the Commission’s Rules of Practice and Procedure, Rule 16.4(f), The Protect

Our Communities Foundation (“PCF”)1 provides this opposition to the Petition For Modification

Of D.20-11-044 By The Indicated Shippers (“PFM”) that was filed on May 26, 2021.2 This

response is timely filed in accordance with ALJ Zhang’s May 28, 2021 Ruling.

I. INTRODUCTION

Over a year and a half ago, Governor Newsom directed President Batjer to shut down the

Aliso Canyon facility using “the fastest and most workable path toward closure of the facility.”3

Governor Newsom stated, “I am concerned that the Commission's current proceeding will not

yield the fastest and most workable path toward closure of the facility.”4 Unnecessarily

1 The Protect Our Communities Foundation previously used the acronym POC, but now uses the acronym PCF. PCF respectfully requests that the parties and the Commission refer to it by its name or by the acronym PCF. 2 I.17-02-002, Petition For Modification Of D.20-11-044 By The Indicated Shippers (May 26, 2021) (“PFM”). 3 Gavin Newsom, Governor of California, letter to Marybel Batjer, President CPUC (November 18, 2019), available at: https://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/News_Room/NewsUpdates/2019/Nov%2018%202019%20Letter%20to%20President%20Batjer.pdf. 4 Ibid.

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increasing the interim storage capacity, as the PFM requests, lacks any factual or legal basis and

would be a step in the wrong direction. The request made in the PFM will move the Commission

further away from Governor Newsom’s direction to close Aliso Canyon as soon as possible.

The Indicated Shippers’ (“IS”) – a group of companies that profits from fossil-fuel-based

operations – has signaled its opposition to shutting down Aliso Canyon by requesting to

unnecessarily increase the facility’s maximum storage limit. However, the IS’s position not only

directly conflicts with the governor’s directive, but also with the most recent data and the best

interests of Californians.

II. THE COMMISSION MUST REJECT THE PFM BECAUSE PCF HAS NOT YET BEEN AFFORDED THE OPPORTUNITY TO PRESENT ITS CASE AND BECAUSE THE TWO DOCUMENTS CITED IN THE PFM ARE NOT PROPER SUBJECTS OF OFFICIAL NOTICE.

The Commission may only make changes to its prior decisions “upon notice to the

parties, and with an opportunity to be heard as provided in the case of complaints.5 Here, the

disputes recognized by the Commission in D.20-11-044 have not yet been resolved,6 and PCF

continues to await any meaningful opportunity to present its own evidence, or to cross-examine

and refute evidence presented by others.7 The Commission cannot lawfully change the interim

storage level without providing for a full and fair opportunity to PCF to make its case.

5 Pub. Util. Code, § 1708; California Trucking Assn. v. Public Utilities Comm. (1977) 19 Cal.3d 240, 244 [“The phrase ‘opportunity to be heard’ implies at the very least that a party must be permitted to prove the substance of its protest rather than merely being allowed to submit written objections to a proposal.”].) 6 D.20-11-044, p. 6 (“POC disagrees with the Energy Division’s assumptions and inputs in the reliability analysis. POC proposes alternative inputs which suggest no need for Aliso Canyon.”); id. at p. 6, 12-13; id. at p. 7 (“In response to SoCalGas’ comment regarding the additional gas necessary for winter reliability, POC’s reply comments state that increasing Lines 235 and 4000 to rated operating pressure would provide the necessary additional gas.”). 7 Caesar's Restaurant v. Industrial Acc. Commission (1959) 175 Cal.App.2d 850, 855 (“The right to [a fair and open hearing] is one of ‘the rudiments of fair play’ (citation) assured to every litigant by the Fourteenth Amendment as a minimal requirement.”).

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Additionally, the PFM seeks increased storage levels based on erroneous requests that the

Commission take official notice of (1) the Phase 2 Modeling Report and (2) a Summer 2021

Technical Assessment by Southern California Gas Company (SoCalGas).8 As discussed below,

both documents are very much disputed and thus cannot be officially noticed pursuant to

Evidence Code section 452(h) as the PFM suggests.9

Additionally, before taking official notice of any matter that is “of substantial

consequence to the determination” of the proceeding, the Commission would be required to

provide PCF and others with a reasonable opportunity to present evidence relevant to the

propriety of taking official notice before judicial notice may be resorted to by decision-makers.10

PCF continues to await such an opportunity.

In any event, the Commission cannot take official notice of the truth of the contents of

either document.11

8 PFM, p. 1-2. 9 PFM, p. 2, fn. 6. Additionally, although IS does not request that official notice based on Evidence Code section 451(c), the Commission could not take official notice of either document as an official act. See Evid. Code, § 452, subd. (c); Childs v. California (1983) 144 Cal.App.3d 155, 162; see also LaChance v. Valverde (2012) 207 Cal.App.4th 779, 783 (email from attorney general is not judicially noticeable). 10 Evid. Code, § 455 (“. . . (a) If the trial court has been requested to take or has taken or proposes to take judicial notice of such matter, the court shall afford each party reasonable opportunity, before the jury is instructed or before the cause is submitted for decision by the court, to present to the court information relevant to (1) the propriety of taking judicial notice of the matter and (2) the tenor of the matter to be noticed. (b) If the trial court resorts to any source of information not received in open court, including the advice of persons learned in the subject matter, such information and its source shall be made a part of the record in the action and the court shall afford each party reasonable opportunity to meet such information before judicial notice of the matter may be taken.”). 11 Evid. Code, § 452, subds. (c), (h); Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 889; Childs v. California (1983) 144 Cal.App.3d 155, 162-163 (“the court cannot take judicial notice of self-serving hearsay allegations”).

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III. THE PFM REQUESTS AN INCREASED STORAGE LIMIT BASED ON A FAULTY ANALYSIS AND INCORRECT AND INCOMPLETE INFORMATION.

The IS uses faulty, incorrect and incomplete information to assert that the Aliso Canyon

interim storage capacity should be increased. The IS incorrectly claims (1) that “new facts and

circumstances have arisen,”12 (2) that Aliso reduces ratepayer costs, (3) that increasing the use

of Aliso could provide just and reasonable rates (4) that Phase 2 Modeling requires increased

storage levels, (5) that the Texas blackouts demonstrate the need for Aliso, and (6) that the

Commission should rely upon documents authored by SoCalGas. PCF responds to each of these

misguided and misleading arguments in the subsections below.

A. The September 2021 Expected Completion of Line 4000 Remediation Will Increase Flowing Supplies and Enable Reduction of the Existing Storage Limit.

IS claims that the Aliso Canyon storage limit of 34 Bcf established in the 715 Report

issued on July 2018 is outdated, and further incorrectly asserts that new information justifies a

higher storage limit.13 While PFC agrees that the July 2018 715 Report’s information is

outdated, the most recent information should lead the Commission to reduce the storage limit

rather than increase the storage limit.

Prior to the Line 235 rupture and the resulting reduction in gas supply delivered through

L235 and L4000, the Commission found that the Aliso Canyon storage limit should be set to

24.6 Bcf.14 When considering and establishing the 24.6 Bcf limit, the Commission accounted for

“an unprecedented level of outages on the SoCalGas system that include[d] all of the major

12 PFM, p. 1. 13 PFM, p. 3. 14 Public Utilities Code Section 715 Report, Aliso Canyon Working Gas Inventory, Production Capacity, Injection Capacity, and Well Availability for Reliability, Final Supplemental Report for Winter 2017-18, (December 11, 2017). p. 1.

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system elements: storage facilities, pipelines, and compressor stations.”15 Thus, the 24.6 Bcf

limit already accounted for the unjustified inefficiencies associated with SoCalGas’s operations.

Line 235 ruptured after the Commission had already noted the ongoing “unprecedented level of

outages.”16

After the Line 235 rupture, the 715 Report published July 2018 recommended the Aliso

Canyon capacity limit be increased to 34 Bcf “due to 1) continuing pipeline outages on the

Southern California Gas Company (SoCalGas) system; 2) consideration of the impact that

declines in inventory at the non-Aliso storage fields have on their withdrawal capacity; 3) an

examination of whether monthly 1-in-10 peak day demand can be met with forecasted storage

inventory levels; and 4) limited injection capacity at the non-Aliso fields, which makes it

difficult to inject gas into storage.”17 Thus, it was only after the L235 and L4000 outages that the

Energy Division recommended an increase in Aliso Storage to 34 Bcf.

The Phase 2 Modeling report failed to incorporate into its modeling the return of service

of L235 and L4000. However, the report did note “SoCalGas plans to complete remediation

work on Line 4000 in the Northern Zone by September 2021, which would increase its receipt

capacity, although not to its historic level.”18 The existing 34 Bcf limit assumes L235 and L4000

outages and thus the existing limit accounts for outages that are no longer anticipated for the

2021-2022 winter. SoCalGas completed L235-2 remediation on August 18, 2020,19 and

15 Ibid. 16 Ibid. 17 Public Utilities Code Section 715 Report, Aliso Canyon Working Gas Inventory, Production Capacity, Injection Capacity, and Well Availability for Reliability Summer 2018 Supplemental Report Public Utilities Code Section 715, (July 6, 2018). 18 Phase 2 Modeling Report, p. 87. 19 Southern California Gas Company Pipeline/Station Maintenance Schedule (August 18, 2020), (L235-2 Pipeline remediation was marked as completed/expired on 08/17/2020).

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SoCalGas’s most recent Daily Operations report lists L4000 remediation with an end date of

September 30, 2021.20

Currently Envoy lists the L235 and L4000 capacity reductions at 900 MMcfd. Returning

those lines to full or close to full operating pressure will result in the Northern Zone approaching

its full rated capacity.21 An increase of 900 MMcfd would also increase the total system flowing

pipeline capacity by at least 31%.22 Thus, not only should the Commission reject the PFM, but

the Commission should consider lowering the interim storage limit to 24.6 Bcf, which was the

conclusion of the 715 Report issued on December 2017 when L235 and L4000 were operational.

B. The Price Spike Arguments in the PFM Fail to Account for Lines 235 and 4000 Remediation and the Operational Flow Order Rules.

The argument in the PFM that “Increasing the Aliso Canyon storage level to 54.88 Bcf

would reduce the risk of increased costs to core and noncore customers,”23 fails to take into

account both changes to gas system rules and greater flowing capacity availability for the

upcoming winter.

One of the factors eliminating the concern of gas price spikes is L235 and L4000 re-

entering service. The California Independent System Operator’s Department of Market

Monitoring (“DMM”) has previously established that when SoCalGas keeps its pipelines

maintained and operable, customer pricing remains unaffected even with the current storage limit

20 Phase 2 Modeling Report, p. 87; SoCalGas Envoy, Maintenance Schedule, (“L-4000 Necessary Remediation. Safety/Reliability.” 720 MMcfd capacity reduction, end date “09/30/2021 11:59:59 PM PCT”), available at https://scgenvoy.sempra.com/#nav=/Public/ViewExternalSystemMaintenance.getMaintenanceLedger%3Frand%3D9 [last accessed June 25, 2021]. 21 SoCalGas’s Envoy system still lists Line 3000 with “operational restrictions” with an end date “TBD” and 190 MMcfd of capacity reduction. 22 Total SoCalGas system pipeline capacity equals 3,780 MMcfd according to the SoCalGas 2021 Summer Technical report. Thus 3,780 MMcfd – 900 = 2,880 MMcfd. Then 900 MMcfd / 2,880 MMcfd = 0.3125 = 31%. 23 PFM, p. 3.

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on Aliso Canyon. Figure 1, a reprint of a chart created by DMM, illustrates the difference

between SoCal Citygate prices and the SoCal Border prices.

Figure 1: Gas Price Differential SoCal Citygate vs SoCal Border [Reproduction of DMM chart]24

After the Aliso Canyon blowout, the price differential between SoCal Citygate and SoCal

Border pricing remained approximately zero (see the left side of the dashed red line). It was not

until the rupture of L235 that the price difference between SoCal Citygate and SoCal Border

emerged (see the right side of the dashed red line).

As described in Section III(A) above L235 and L4000 are scheduled to re-enter service in

September, which should result in cost differentials between SoCal Citygate and SoCal Border

dropping to approximately zero. Thus, the price concerns raised by IS will have been eliminated.

24 A.14-06-021, Response To Joint Petition For Modification Of The Department Of Market Monitoring Of The California Independent System Operator Corporation, (September 4, 2018), Figure 1 Impact of Potential OFO Noncompliance Charges on Next Day SoCal Citygate Prices, p. 3.

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Additionally, the Operational Flow Order (“OFO”) rules established in mid-2019 protect

against increasing gas prices. D.19-05-030 revised the OFO structure for SoCalGas and SDG&E

territories. Figure 2, a reproduction of a slide presented by the Southern California Generation

Coalition (SCGC) in a workshop in R.20-01-007, shows the immediate gas price response to the

OFO structure change, which occurred before the Aliso Canyon Withdrawal Protocol took

effect.25

Figure 2: Gas Pricing Response to OFO Structure Revision [Reproduction of SCGC slide in R.20-01-007]26

Figure 2 shows that after the OFO reform the 2019 summer and 2019-2020 winter saw

only minor gas price differential increases, despite the fact that L235 and L4000 were being

operated at 900 MMcfd below their designed capacity. Prior to the OFO change, price

differentials spiked to nearly $30/Dth. After the OFO change there was no summer price

differential, and the winter price differential only rose to approximately $3.5/Dth at its peak.

25 R.20-01-007, Track 1B Staff Workshop, Presentation by Southern California Generation Coalition, (July 21, 2020), p. 194. 26 R.20-01-007, Track 1B Staff Workshop, Presentation by Southern California Generation Coalition, (July 21, 2020) p. 194 (The page has been cropped to only provide the chart).

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Either the return to service of L235 and L4000 or the OFO structure change in D.19-05-

030 serve to eliminate the outdated cost concerns asserted by IS in the PFM. Thus, because

flowing pipeline capacity will dramatically increase for the 2021-2022 winter and the OFO

structure will be in place for the winter, IS’s price spike claims are unfounded.

C. Assessing the True Costs of Aliso Canyon Reveals that Closure Provides Ratepayers Just and Reasonable Rates.

IS references the “Commission’s foundational duty to ensure just and reasonable utility

rates for ratepayers” and insists that to meet its duty the Commission should “increase the

maximum allowable inventory to address economic impacts on customers.”27 PCF disagrees

with the IS claim that changes to Aliso’s storage limit result in just and reasonable rates. The

expansion of usage of a facility such as Aliso Canyon that damages Californians’ health, risks

Californians’ safety, and contributes to the $1.1 trillion28 per decade in California climate change

costs cannot be considered to have been priced justly or reasonably. The Commission in D.20-

11-044 acknowledges issues remaining in dispute regarding state directives requiring the

reduction of greenhouse gas emissions,29 issues that directly relate to Phase 2 issues,30 and the

PFM does nothing to change this reality.

27 PFM, p. 15. 28 2018 Statewide Summary Report California’s Fourth Climate Change Assessment (“Climate Change Assessment”), Publication number: SUM¬CCCA4-2018-013, Table 6, p. 42 (110 billion per year x 10 years = 1.1 trillion per decade), available at https://www.climateassessment.ca.gov/; see also Interagency Working Group on Social Cost of Greenhouse Gases, United States Government, Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 (February 2021), available at https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf; 29 D.20-11-044, p. 7 (“…closing Aliso Canyon as soon as possible would assist with the Governor’s carbon neutrality directive B-55-18 and Health and Safety Code Section 38566.”) 30 I.17-02-002, Order Instituting Investigation (February 9, 2017), p. 7 & fn. 2 (recognizing SB 32 codifies the mandate in Executive Order B-30-15 to reduce greenhouse gas emissions in California to 40 percent below 1990 levels by 2030).

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A joint group of California agencies has determined that California climate change costs

exceed $110 billion per year or $1.1 trillion per decade.31 Those extraordinary costs do not

include the increase in wildfire costs due to climate change. Harvard research fellow Drew

Michanowicz stated in the LA Times that “[t]he blowout at the Aliso Canyon natural gas storage

well was one of the worst environmental disasters in U.S history.”32 Additionally, there are

health consequences for nearby residents. UC Berkeley, UCLA and other universities have

begun cataloging the myriad health consequences to people living in close proximity to oil and

gas facilities such as Aliso Canyon.33

The Commission should not, as the PFM would have it, make Aliso-related decisions

without considering both the unprecedented harm the facility caused that led to this proceeding,

and the recent science that establishes an increasingly urgent need to reduce natural gas use in

order to avoid the most catastrophic climate change impacts. The National Oceanic &

Atmospheric Administration (“NOAA”) reports that despite the global pandemic, the annual

increase in atmospheric methane in 2020 was the largest annual increase recorded since

systematic measurements began in 1983.34 The following graphic depicts the dangerous trend in

the monthly mean global atmospheric burden of methane:

31 Ibid. 32 LA Times, The Aliso Canyon gas leak was a disaster. There are 10,000 more storage wells out there just like it (May 14, 2018), see https://www.latimes.com/opinion/op-ed/la-oe-michanowicz-aliso-canyon-gas-leak-20180514-story.html. 33 Los Angeles Times, In California, you can drill for oil next to a home. Activists hope to change that, (August 13, 2020), see https://www.latimes.com/environment/newsletter/2020-08-13/boiling-point-california-rejected-oil-well-safety-bill-boiling-point. 34 NOAA, Despite pandemic shutdowns, carbon dioxide and methane surged in 2020 (April 7, 2021), available at https://research.noaa.gov/article/ArtMID/587/ArticleID/2742/Despite-pandemic-shutdowns-carbon-dioxide-and-methane-surged-in-2020.

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Recently, the United Nations Environment Programme published a report establishing an

increasingly critical need for specific measures targeting methane reduction in order to achieve

the greenhouse gas emission reductions necessary to avoid the most catastrophic climate change

impacts. The UN report explains that “[r]educing human-caused methane emissions is one of the

most cost-effective strategies to rapidly reduce the rate of warming and contribute significantly

to global efforts to limit temperature rise to 1.5 degrees above pre-industrial levels, particularly

in the fossil fuel sector.35

Additionally, as PCF has repeatedly advocated, the economic arguments made

throughout this proceeding have not accounted for the cost savings of closing the facility.36 The

Energy Division reports do not address or purport to address the cost savings that will result from 35 UN Environment Programme et al., Global Methane Assessment – Benefits and Costs of Mitigating Methane Emissions (May 6, 2021), p. 8, 87-88, available at https://www.unep.org/resources/report/global-methane-assessment-benefits-and-costs-mitigating-methane-emissions. 36 I.17-02-002, The Protect Our Communities Foundation Reply Comments Regarding the Questions in the Assigned Commissioner’s Phase 3 Scoping Memo and Ruling (February 14, 2020), Attachment 1 (Bill Powers, P.E., Powers Engineering, Technical Assessment – Is Aliso Canyon Needed to Ensure Natura Gas Reliability in Southern California (April 8, 2016)); id. at Attachment 2 (Bill Powers, P.E., Powers Engineering, Technical Assessment – Critical Review of Aliso Canyon Winter Risk Assessment and Action Plan (August 31, 2016)).

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closing Aliso Canyon. In D.20-11-044 itself the Commission acknowledged PCF’s fact-based

analysis that the facility is “a financial burden to ratepayers,” PCF’s “additional analysis on the

amount of gas necessary for…just and reasonable rates,” and PCF’s “projected cost savings if

Aliso Canyon is closed,”37 and the PFM does nothing to resolve these issues.

Any one of the concerns listed above undercut the claim that increasing the storage limit

will result in more just and reasonable gas rates and highlight the urgent need to close Aliso

Canyon. IS’s proposal to increase the use of Aliso Canyon, a large methane storage facility, will

lead to less just and less reasonable rates for Californians because the methane stored there will

continue to amplify the costs and health consequences of climate change. Further, the closure of

Aliso Canyon will also provide a ratepayer benefit, rate reductions previously estimated by PCF

at approximately $70 million per year.38

D. The Phase 2 Modeling Report Cannot Be Officially Noticed and Remains Internally Inconsistent and Based on a Flawed Analysis.

The PFM incorrectly stated that “the Phase 2 Modeling Report demonstrates a need for

an increased maximum allowable inventory.” First, as noted in PCF’s response to the Phase 2

Modeling Report, the modeling report data shows that if minimum local generation were used on

just 34 days per decade, that Aliso Canyon could be shut down without affecting gas or electric

system reliability. The Modeling Report itself stated that “with minimum local generation

37 D.20-11-044, p. 6-7, 12-13. 38 I.17-02-002, The Protect Our Communities Foundation Reply Comments Regarding the Questions in the Assigned Commissioner’s Phase 3 Scoping Memo and Ruling (February 14, 2020), Attachment 1 (Bill Powers, P.E., Powers Engineering, Technical Assessment – Is Aliso Canyon Needed to Ensure Natura Gas Reliability in Southern California (April 8, 2016)); id. at Attachment 2 (Bill Powers, P.E., Powers Engineering, Technical Assessment – Critical Review of Aliso Canyon Winter Risk Assessment and Action Plan (August 31, 2016)).

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hydraulic modeling simulations for winter 2020, 2025, and 2030 were successful without the use

of Aliso Canyon Underground Storage Field” [emphasis added].39

Second, the Phase 2 Modeling Report contained errors that have yet to be corrected. For

example, the Phase 2 Modeling Report modeled summertime use of minimum local generation

measures. PCF detailed this modeling error in its comments40 on the Phase 2 Modeling Report,

and TURN supported PCF’s analysis in reply comments on the report.41 The Phase 2 modeling

error lead to erroneous conclusions in the report – conclusions that IS cites to in the PFM.

Moreover, the Phase 2 Modeling Report failed to include the effect of L235 and L4000

returning to service, used data that masked the effect of warming winter weather related to

climate change,42 and used receipt point utilization below historical averages.43 Each of these

inaccurate assumptions led to an overstated need for storage and the PFM’s conclusion that

increased Aliso Canyon storage is needed.

The Phase 2 Modeling Report contained significant errors that have yet to be corrected

and used pipeline capacity assumptions that are now outdated. Because of the errors and

outdated assumptions used in the Phase 2 Modeling Report, the Commission must not rely on the

report to establish new interim Aliso Canyon storage limits. 39 Phase 2 Modeling Report. P. 67. 40 I.17-02-002, The Protect Our Communities Foundation Comments On The Energy Division Aliso Canyon Modeling Report, (March 19, 2021), p. 5-7. 41 I.17-02-002, Reply Comments Of The Utility Reform Network On The Phase 2 Modeling Report, (April 12, 2021), p. 1-2. 42 I.17-02-002, Energy Division’s Staff Responses to Workshop #3 Informal Comments (October 9, 2020), (Staff responded that the temperatures used to determine the demand on the for peak days was to use “50 years of historical data.” PCF disagrees with this approach because the according to the National Oceanic and Atmospheric Administration (NOAA), the last seven years are the hottest seven years on record and NOAA expects that trend to continue, see https://www.ncei.noaa.gov/news/projected-ranks.). 43 Phase 2 Modeling Report, p. 63 (“Similar to the 1-in-10 peak design day, the three MLG modeling scenarios in Simulations 07-09 assumed 85 percent receipt point utilization on the Northern and Southern Zones and 100 percent on the Wheeler Ridge Zone.”); I.17-02-002, Presentation, Aliso Canyon OII Phase 3 Research, Workstream #2 Approach: Portfolios Framework and Research Methods, (March 30, 2021) p. 30, (FTI found that on high demand days the RPU typically exceeds 95%.) see https://www.cpuc.ca.gov/AlisoOII/.

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E. The February “Artic Blast” Arguments Lack Evidentiary Support and Fail to Provide Any Basis for Increasing the Aliso Canyon Storage Limits.

The PFM states that “the February 2021 Arctic Blast extreme weather event led to receipt

point utilization numbers even lower than those assumed in the Phase 2 Modeling Report.”44 In

referencing the receipt point utilization (RPU) from the Artic Blast event, IS attempts to use a

single data point to justify its position on RPU rather than evaluate the full range of data that

accompanied the Arctic Blast event.

First, the Envoy data for February 2021 shows that the largest withdrawals from

SoCalGas storage occurred on February 16, 2021 at 957 MMcfd.45 The Phase 2 Modeling Report

notes that the non-Aliso storage withdrawal capacity equals 1,330 MMcfd. Thus, even in

response to one of the worst out-of-state gas shortages in history, the required storage withdrawal

capacity stayed 28% (373 MMcfd) below the combined withdrawal capacity of non-Aliso

SoCalGas storage facilities. Additionally, the average withdrawal from storage during February

2021 equaled just 382 MMcfd. That means during a winter month when California was limited

to low gas supply from Texas and New Mexico, the SoCalGas storage withdrawal rate stayed

well below the withdrawal capacity of its non-Aliso storage fields, even on the highest storage

withdrawal date.

SoCalGas has also noted that during extreme weather events in the winter it redirects firm

gas supply across the west rather than select to receive the full gas supply that it has purchased.46

SoCalGas described its operations during the Polar Vortex event of 2014 by saying that “[d]uring

44 PFM, p. 10. 45 SoCalGas, Envoy Data, Daily Operations February 2021, available at https://scgenvoy.sempra.com/#nav=/Public/ViewExternalArchive.showArchive%3FarchiveType%3Ddaily_operations%26rand%3D480 [last accessed June 28, 2021]. 46 I.17-02-002, Opening Comments Of Southern California Gas Company (U 904 G) To Aliso Canyon I.17-02-002 Phase 3, Workshop No. 2 Presented By FTI Consulting And Gas Supply Consulting, (April 20, 2021), p. 22.

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this event, SoCalGas’s Gas Acquisition department similarly redirected some of its firm natural

gas supplies to the higher-priced markets that were hard hit by the extreme weather conditions,

thus helping to support reliability in states east of California while concurrently reducing core

procurement ratepayer costs” [emphasis added].47 It is not known by PCF at this time whether

SoCalGas redirected pipeline supplies out-of-state in February 2021, which would have the

effect of artificially lowering the RPU. The fact that SoCalGas can voluntarily redirected gas

during a non-emergency event in California must be considered when the Commission evaluates

the significance of the RPU.

IS’s analysis of RPU rates differs from the analysis provided by FTI in FTI’s March 30,

2021 presentation. FTI’s analysis of historically high sendout days in SoCalGas territory found

an RPU greater than 95%.48 Thus, when gas demand in Southern California is high, the RPU

reflects that high demand condition by fully utilizing the pipeline capacity. The high RPU

percentage on high demand days in California refutes IS’s claims.

IS presents no evidence to support its claim that the Arctic Blast justifies Aliso Canyon.

In reality, the Arctic Blast coincided with a relatively low gas demand month in Southern

California. The low gas demand in Southern California meant that SoCalGas could drop the RPU

percentage during the event, rely on non-Aliso storage, and still comfortably maintain a reliable

gas supply. FTI provided a reasonable analysis of RPU because FTI correctly evaluated RPU

during high demand conditions in Southern California. High demand conditions are the only

conditions under which the pipeline infrastructure needs to achieve high RPU. The Commission

must reject IS’s argument related to RPU and the Arctic Blast for lack of any evidence.

47 Ibid. 48 I.17-02-002, Presentation, Aliso Canyon OII Phase 3 Research, Workstream #2 Approach: Portfolios Framework and Research Methods, (March 30, 2021) p. 30, see https://www.cpuc.ca.gov/AlisoOII/.

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F. The SoCalGas Technical Assessment Cannot Be Officially Noticed.

IS claims that SoCalGas’s Summer 2021 Technical Assessment represents facts “not

reasonably subject to dispute” and as such should be accepted by the Commission for official

notice.49 As explained in Section II above, the Summer 2021 Technical Assessment is not a

proper subject of official notice.

SoCalGas’s Technical Assessment provides opinions and preferences from a company

monetarily incentivized to keep Aliso Canyon open. Because SoCalGas would make more

money if Aliso Canyon were to stay open, that inherent conflict-of-interest informs all of

SoCalGas’s work and advocacy around Aliso Canyon, including its technical reports. Thus,

SoCalGas’s technical report should be given no more weight than SoCalGas’s comments and

reply comments in the proceeding.

SoCalGas’s Technical Assessment minimizes or ignores conditions that would lead to the

conclusion that Aliso Canyon could be used less or shut down entirely. For instance, SoCalGas

failed to analyze, or even mention the fact, that the gas pipeline capacity during the 2021-2022

winter season is scheduled to greatly exceed the summer capacity or previous winters’ capacities,

or that SoCalGas has instituted a “[v]oluntary decrease of maximum operating pressure” on other

pipelines.50

The Commission must reject IS’s request to take official notice of SoCalGas’s Summer

2021 Technical Assessment.

49 PFM, footnote 6, p. 2. 50 SoCalGas Envoy, [Last accessed June 26, 2021], (The Envoy data shows a 202 MMcfd capacity reduction. “L2000 - Planned Outage - Voluntary decrease of maximum operating pressure on L2000 Southern Transmission Zone by approximately 20%. This change is being made to further improve and maintain the safety of So Cal Gas pipelines. Note: Original Job start date 8-5-2011.”).

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IV. THE COMMISSION SHOULD DRAW DIFFERENT CONCLUSIONS FROM THE ARCTIC BLAST EVENT THAN THE PFM PROPOSES.

If evidence relating to the Artic Blast is properly presented to the Commission in the

future, PCF will establish the Commission should draw much different conclusions than IS

suggests from the Arctic Blast event including conclusions related to climate change and gas

system reliability.

A. Aliso Canyon should be closed to reduce the intensity of extreme weather in the future.

Climate change causes increasingly more extreme weather and costs Californian’s over

$110 billion per year.51 As a result, California should redouble its efforts to avert the worst

impacts of climate change. Methane use causes GHG emissions and GHG emissions cause

climate change. Climate change causes extreme weather events such as the Arctic Blast. Thus, to

reduce future extreme weather events California should reduce methane use and retire methane

infrastructure as quickly as possible rather than use extreme weather events as a justification for

increasing methane use.

B. Gas supply and infrastructure has proven unreliable and dangerous.

During the Arctic blast unreliable gas infrastructure and human error52 lead to the deaths

of 151 people.53 SoCalGas procures most gas from outside of California, and California

51 2018 Statewide Summary Report California’s Fourth Climate Change Assessment (“Climate Change Assessment”), Publication number: SUM¬CCCA4-2018-013, Table 6, p. 42 (110 billion per year x 10 years = 1.1 trillion per decade). Available at https://www.climateassessment.ca.gov/. 52 The Texas Tribune, Paperwork failures worsened Texas blackouts, sparking mid-storm scramble to restore critical fuel supply, (March 18, 2021), (James Cisarik, chairman of the Texas Energy Reliability Council, told legislators “In my opinion, if we had kept the supply [of natural gas] on, we would’ve had minor disruptions.”; “Christi Craddick, chair of the Railroad Commission, told lawmakers during testimony the week after the storm that outages ‘caused a domino effect,’ adding that ‘any issues of frozen [natural gas] equipment could have been avoided had the production facilities not been shut down by power outages.’”; “By the end of the week, Oncor had added 168 new natural gas facilities to its ‘critical’ list — a nearly five-fold increase from just a few days prior.”), see https://www.texastribune.org/2021/03/18/texas-winter-storm-blackouts-paperwork/.

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regulations on gas do nothing to reduce the likelihood of faulty gas infrastructure and human

error in states like Texas.

Throughout the proceeding SoCalGas and others have noted that gas only travels at 20-30

miles per hour.54 The slow speed that gas moves paired with the long distances that gas must

traverse to reach the California coastal populations would indicate that gas is a less desirable

choice for California energy needs, especially when California depends on unreliable gas

infrastructure. In addition to Texas’s unreliable gas infrastructure, SoCalGas’s infrastructure has

proved to be unreliable as demonstrated by the Aliso Canyon blowout, the L235 rupture, and the

nearly four years over which SoCalGas has failed to return L235 and L4000 to full flowing

capacity.

V. THE COMMISSION CAN OPERATIONALIZE MINIMUM LOCAL GENERATION MEASURES TO REDUCE PEAK GAS DEMAND IN SOUTHERN CALIFORNIA ON PEAK COLD DAYS.

IS states that “the risks to reliability justify an updated interim decision increasing the

maximum allowable capacity of Aliso Canyon to 54.88 Bcf.”55 However, IS ignores the Phase 2

Modeling that demonstrates how minimum local generation can effectively reduce Southern

California gas demand on peak cold days. In fact, the Phase 2 Modeling shows how minimum

local generation could successfully replace Aliso Canyon if minimum local generation measures

were used on only 34 days per decade.

53 Dallas News, Number of Texas deaths linked to winter storm grows to 151, including 23 in Dallas-Fort Worth area, (May 1, 2021), see https://www.dallasnews.com/news/weather/2021/04/30/number-of-texas-deaths-linked-to-winter-storm-grows-to-151-including-23-in-dallas-fort-worth-area/ 54 I.17-02-002, Opening Comments Of Southern California Gas Company (U 904 G) To Aliso Canyon I.17-02-002 Phase 3, Workshop No. 2 Presented By FTI Consulting And Gas Supply Consulting, (April 20, 2021), p. 2; I.17-02-002, Opening Comments Of The Indicated Shippers On Phase 3, Workshop #2, (April 20, 2021), p. 8. 55 PFM, p. 2.

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The 2016 Aliso Canyon Winter Risk Assessment Technical Report described minimum

local generation measures as a strategy that maintains system reliability.

The winter power flow case was modeled to study the minimum generation required in the LADWP and California ISO systems to maintain electric system reliability. The fleet of resources dependent on gas supplied by SoCalGas inside the Los Angeles Basin and the Southern System were kept at minimum while maintaining reliability of the electric system. Additional assumptions include maximizing the electric transmission capability for imports into the southern electric system while maintaining electric system reliability. [emphasis added]56

As noted above, three times in the span of a paragraph, minimum local generation

maintains reliability. Moreover, it maintains reliability without the pollution, climate change

effects or health risks posed by Aliso Canyon and methane. While fossil-fuel-based companies

including IS and SoCalGas assert that the continued use of Aliso Canyon represents the only way

to provide reliable energy to Southern California, the Commission itself has co-authored reports

like the 2016 Aliso Canyon Winter Risk Assessment Technical Report, that detail reliable

alternatives to continued use of Aliso Canyon and other fossil fuel infrastructure.

VI. CONCLUSION

PCF recommends that the Commission either reduce or lower the interim storage limit

for Aliso Canyon because each of IS’s claims in its PFM are misleading or wholly incorrect as

detailed above. Further, any increase to the Aliso Canyon storage limit ignores Gubernatorial and

Legislative direction to close the facility as soon as possible. An increase to the interim storage

limit would likely result Aliso Canyon’s eventual closure taking longer and costing more than if

the Commission maintains the interim storage limit at 34 Bcf. The current storage limit provides

56 California Energy Commission, Aliso Canyon Winter Risk Assessment Technical Report, (August 23, 2016), p. 32.

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sufficient capacity for reliable gas and electricity service until the Commission implements the

minimum local generation measures that will allow Aliso Canyon to be closed permanently.

Respectfully submitted,

/s/ Tyson Siegele____________________

Tyson Siegele - Energy Analyst Protect Our Communities Foundation 4452 Park Boulevard, #309 San Diego, CA 92116 P: 619-693-4788 Tyson@ProtectOurCommunities.org

Dated: June 28, 2021

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