California Rejects Sempra’s Proposed $621 Million Gas Line

  • California PUC says company failed to demonstrate project need
  • Line would have delivered gas within Southern California

California regulators rejected a proposal by Sempra Energy to build a $621 million natural gas pipeline in Southern California, saying the company failed to demonstrate a need for the project.

The five-member California Public Utilities Commission voted unanimously Thursday to deny the North-South line proposal at a meeting. Sempra’s Southern California Gas Co. and San Diego Gas & Electric utilities had said the pipeline could help alleviate potential gas shortages by delivering more gas from its northern system to its southern one, which serves an area that includes the city of San Diego.

Commissioner Mike Florio said there were less costly ways to address gas reliability needs such as using modified gas contracts and tariffs.

“It just doesn’t seem sensible to me, at a time when we are looking to decrease our reliance on fossil fuels, that we would spend $621 million on a new pipeline that just moves gas around," Florio said at the meeting.

California has increased its scrutiny of natural gas infrastructure after a series of high-profile incidents. In 2010, an explosion of a PG&E Corp. gas line in a San Francisco suburb killed eight people and destroyed 38 homes. Earlier this year, Sempra stopped a nearly four-month gas leak at its Aliso Canyon facility near Los Angeles that forced the evacuation of thousands of residents. As a result of the leak, California officials have warned of potential gas shortages that could lead to blackouts this summer.

Southern California Gas is “profoundly disappointed with the commission’s decision,” the company said in an e-mail statement. “We remain concerned about energy reliability for our southern system customers -- homes, businesses and power plants in the high-growth areas of San Bernardino, Riverside, San Diego and Imperial counties.”

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