Dive Brief:

• The California Public Utilities Commission has opened a two-phase investigation to consider the future of the Aliso Canyon gas storage facility, and will weigh dramatically cutting its use or shutting it down altogether.
• The investigation is at the direction of state lawmakers, and comes as the state is considering allowing Southern California Gas to resume operation of the facility.
• A leak at the facility was discovered in 2015, forcing the evacuation of nearly 6,000 residents and leading to emergency orders to help maintain power reliability in the region. Last year SoCal Gas agreed to pay $4.3 million under a settlement with the District Attorney's Office for Los Angeles County.

Dive Insight:

Even as the CPUC collects public comments on re-opening the Aliso Canyon facility, it is also under direction by the California Senate to consider shutting it down.

In a statement, the commission said Senate Bill 380, required opening the proceeding and for the commission to consult with the State Energy Resources Conservation and Development Commission, the California Independent System Operator, local utilities and other agencies.

“We have acted quickly and innovatively in the past 15 months to address reliability in the region impacted by the closure of Aliso Canyon, including staff analyses of reliability for winter and summer needs and fast-tracking the approval of energy storage units at key locations, all while conducting our investigation of the leak,” Commissioner Liane Randolph said in a statement. 

According to the U.S. Energy Information Administration, gas generation was down about 20% during June, July and August last year, due to the facility going offline, but was replaced largely by carbon-free sources and power imports. The state has rushed out battery storage projects to avoid energy shortages, but did allow the Los Angeles municipal utility to burn diesel in its gas generators last summer in the case of shortfalls. 

The new Aliso Canyon investigation will take place in two phases. In the first, the commission will consider whether it is feasible to reduce or eliminate the use of Aliso Canyon. The second phase, according to the commission's statement, will consider "whether the CPUC should reduce or eliminate the use of Aliso Canyon, and if so, under what conditions and parameters and in what time-frame."

A final decision is expected in the middle of next year, but the commission warned it had slated a full two years for the proceeding to complete all work.