BILL ANALYSIS Ó
AB 2798
Page A
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
AB 2798
(Gatto) - As Introduced February 19, 2016
SUBJECT: Energy conservation: power facility and site
certification: notice of intention
SUMMARY: Requires a notice of intention to construct a power
facility submitted to the California Energy Commission (CEC) to
include information on the extent to which the facility will
increase or decrease reliance on underground natural gas
storage.
EXISTING LAW:
1)Requires CEC certification of sites and related facilities if
they are to be used as a power facility. (Public Resources
Code Section 25500)
2)Requires each person proposing to construct a thermal
powerplant or electric transmission line on a site to submit
to the CEC a notice of intention to file an application for
the certification of the site and related facility or
facilities. (Public Resources Code Section 25502)
AB 2798
Page B
3)Requires the notice of intention to include a statement by the
applicant with the following information:
a) A description of the location of the proposed sites;
b) A summary of the proposed design criteria of the
facilities;
c) The type or types of fuels to be used;
d) The methods of construction and operation;
e) The proposed location of facilities and structures on
each site;
f) A preliminary statement of the relative economic,
technological, and environmental advantages and
disadvantages of the alternative site and related facility
proposals;
g) A statement of need for the facility and information
showing the compatibility of the proposals with the most
recent electricity; and
h) Any other information that an electric utility deems
desirable to submit to the CEC. (Public Resources Code
Section 25504)
4)Authorizes the CPUC to regulate gas corporations, including
underground storage. (Public Utilities Code Sections 216(a),
221, 222, 227, and 228)
5)Requires gas storage facilities to receive a Certificate of
AB 2798
Page C
Public Convenience and Necessity (CPCN) before constructing a
gas storage facility. Requires that the CPUC grant a CPCN on
the grounds that the present or future public convenience and
necessity requires or will require the gas storage facility.
(Public Utilities Code Section 1001, et seq.)
6)Requires the Department of Conservation to maintain
surveillance over underground gas storage facilities to insure
that the original reserves are not lost, that drilling of new
wells is conducted properly, and that no damage occurs to the
environment by reason of injection and withdrawal of gas.
(Public Resources Code Section 3403.5)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "AB 2798 was introduced in response to the
recent Aliso Canyon gas leak. The leak has been called the
largest environmental disaster since the BP oil spill due to
the large amounts of methane released into the atmosphere. Not
only did this disaster significantly increase greenhouse gas
emissions, it also impacted thousands of families living near
the Aliso Canyon gas storage facility who were forced to
evacuate their homes for up to four months until the leak was
controlled. The smell of mercaptans, an odorant commonly added
to natural gas for detection purposes, caused nosebleeds,
headaches, and nausea for many members of the community. It is
critical that power facilities are only sited and expanded
when there is a true demand for additional energy. However, if
additional facilities are needed, is important that the CEC
take into account how that facility may increase reliance on
natural gas storage, particularly when these storage
facilities have aging infrastructure and are located so close
AB 2798
Page D
to families and homes."
2)Background: A leak was discovered on October 23, 2015, at a
natural gas well located at the Aliso Canyon storage facility,
owned and operated by Southern California Gas Company
(SoCalGas). SoCalGas made several unsuccessful well "kill"
attempts. On December 4, 2015, SoCalGas began drilling a
relief well to intercept and cap the leaking well near the
bottom of the well. Through November and December 2015,
Division of Oil, Gas & Geothermal Resources of the Department
of Conservation (DOGGR) and the CPUC issued orders establish a
moratorium on natural gas injection at Aliso Canyon, to
provide data, retain evidence, and track costs of the effort
to plug the well. The Air Resources Board began collecting
and publishing data on methane emissions caused by the leak.
On January 6, 2016, the Governor issued a Proclamation<1>
directing various state entities to oversee SoCalGas' actions
to stop the leak, protect public safety, ensure accountability
and strengthen oversight of natural gas storage facilities. On
February 11, 2016 SoCalGas temporarily controlled the leak by
injecting mud from a relief well intersecting the bottom of
the leaking well. Gaining control of the leak has drastically
reduced the amount of leaking methane. DOGGR announced a
permanent seal of the well on February 18, 2016.
The long-term impacts of the Aliso Canyon storage facility
leak are still forthcoming. According to data published in
the peer-reviewed journal Science, "at its peak, the nearly
four-month leak released roughly 100,000 tons of
methane-effectively doubling the methane emissions rate of the
entire Los Angeles Basin." The article goes on to state that
this was the largest methane leak in United States' history.
In early March, the Los Angeles Times reported that, despite
--------------------------
<1> https://www.gov.ca.gov/news.php?id=19264
AB 2798
Page E
the fact that the leak had been sealed three weeks earlier,
authorities shut down a local park to keep the public away
until SoCalGas crews could scrub away oily residues found on
playground equipment. The Los Angeles Department of Public
Health stated that they had received more than 700 complaints
during the leak, including headaches, upset stomachs and
respiratory issues, and that more than 300 people called after
the leak had been sealed to report continued health problems.
3)Power Facility Certification Process: According to the Public
Resources Code Section 25504, a person proposing to construct
a thermal powerplant or electric transmission line must submit
a notice of intention to file an application for the
certification of the site and related facility or facilities
to the CEC. The notice of intention must include information
such as a description of the location of the proposed sites; a
summary of the proposed design criteria of the facilities; the
type or types of fuels to be used; the methods of construction
and operation; the proposed location of facilities and
structures on each site; a preliminary statement of the
relative economic, technological, and environmental advantages
and disadvantages of the alternative site and related facility
proposals; a statement of need for the facility and
information showing the compatibility of the proposals with
the most recent electricity. The CEC reviews this information
and determines whether or not to approve the certification to
build the power facility.
4)Gas Storage Well Infrastructure: There are six operators of 12
storage facilities in California with 343 active wells. At
Aliso Canyon there are 39 pre-1954 wells and 98 pre-2006 wells
(including the pre-1954 wells). Honor Rancho storage facility
has no pre-1954 wells and 41 pre-2006 wells. La Goleta
storage facility has 13 pre-1954 wells and 20 pre-2006 wells
(including the pre-1954 wells). Playa del Rey storage
facility has 41 pre-1954 wells and 51 pre-2006 wells
(including the pre-1954 wells). Data on the age of wells at
AB 2798
Page F
other natural gas storage facilities in California was not
available.
Injection of natural gas to a storage facility increases
pressure on the aging infrastructure of a storage well.
Existing law does not require the notice of intention to
include information on the extent to which the facility to be
built will increase or decrease reliance on underground
natural gas storage. It could be beneficial to have this
information to help the CEC determine if increased reliance on
natural gas will be damaging to existing storage well
infrastructure. This information could help prevent future gas
leaks similar to the leak at Aliso Canyon.
5)Related Legislation:
SB 380 (Pavley) 2016: Places a moratorium on injecting natural
gas into the Aliso Canyon gas storage facility and establishes
requirements for resuming natural gas injections at the Aliso
Canyon gas storage facility, as specified. Pending in the
Assembly Appropriations Committee.
AB 2788 (Gatto) 2016: Requires that emergency regulations
adopted by DOGGR in response to the Aliso Canyon gas leak
remain in effect until the adoption, amendment, or repeal of
the regulations is verified by DOGGER. Pending in the Assembly
Natural Resources Committee.
AB 2798
Page G
AB 2763 (Gatto) 2016: Explicitly includes language in the
provisions specific to the issuance a CPCN the definition of
gas plant applies to those provisions. Pending in the Assembly
Utilities and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
Opposition
None on file.
AB 2798
Page H
Analysis Prepared by:Darion Johnston / U. & C. / (916) 319-2083