TITLE
Recommendation to authorize City Manager to execute a settlement agreement and all other necessary documents to settle the City of Long Beach's challenge to the Southern California Gas Company's motion before the Public Utilities Commission for an interim order to establish daily balancing requirements.
DISCUSSION
On October 23, 2015, SoCalGas discovered a leak at one of its injection and withdrawal wells at its Aliso Canyon natural gas storage facility located in the northern part of the San Fernando Valley. The leak was eventually sealed on February 11, 2016, but not before massive amounts of methane and other greenhouse gasses were released into the atmosphere. Soon after the leak was detected, the California Division of Oil, Gas and Geothermal Resources (DOGGR) and the PUC ordered SoCalGas to greatly reduce the amount of gas held at the facility. SoCalGas estimates that it may take several months or possibly years before the Aliso Canyon storage facility can resume normal operations.
Aliso Canyon plays a major roll in maintaining system reliability, especially maintaining a steady flow of natural gas to electric generation facilities. Electric generation is not a steady load, and on summer days tends to peak during the late afternoon and early evening hours. As electricity use peaks, generators need an increased supply of natural gas to meet demand. SoCalGas uses storage withdrawals to meet the demand of electric generators during peak hours while maintaining its system reliability. Aliso Canyon is the largest source of storage supply available to the Los Angeles basin and, therefore, plays a critical role in maintaining the electric grid reliability.
To help ensure an adequate supply of natural gas to maintain system reliability, on March 1, 2016, SoCalGas and San Diego Gas and Electric (SDG&E) filed a motion before the PUC to establish an interim order establishing temporary daily balancing requirements. Under this motion, SoCalGas and SDG&E wo...
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