Aliso Canyon Natural Gas, California, Update -- December 31, 2019

Update regarding Aliso Canyon.

The article is over at S&P Global, Platts, dated December 31, 2019.

The headline FERC makes Cal-ISO gas constraint tool permanent as Aliso Canyon limitations persist.

The lede:

California Independent System Operator has received the go-ahead to make its maximum gas burn constraint a permanent operational tool to help avoid blackouts in Southern California amid continued limited operations at the Aliso Canyon natural gas storage facility.

When conditions warrant, the constraint allows Cal-ISO to limit the amount of natural gas that can be burned by power plants in the Southern California Gas and San Diego Gas & Electric regions.

The provision:

Cal-ISO was previously authorized to use the tool on a temporary basis. The Federal Energy Regulatory Commission Monday approved the grid operator's October 31 proposal (ER20-273) to make permanent three tariff provisions associated with the constraint.

One of the tariff provisions authorizes enforcement of the constraint, while another gives Cal-ISO the authority to override competitive path assessments based on actual system conditions in order to deem certain transmission constraints uncompetitive when the gas constraint is enforced. The last provision permits Cal-ISO to suspend virtual bidding if the bids are introducing adverse market outcomes in conjunction with the use of the gas constraint.

Assessment:

Available gas capacity to serve customers based on best and worst case scenarios for pipeline supplies coupled with potential storage field utilization ranges from 3.77 to 4.11 Bcf/d with the support of Aliso Canyon, and 3.20 to 3.54 Bcf/dD if Aliso Canyon supplies are unavailable, according to the assessment.

Scenario this year:

Under no scenario does SoCal Gas expect to have adequate supplies to handle the 1-in-10-year cold day demand forecast, which would prompt curtailments of core customers. But the utility "does not believe ... that core service is at risk this winter season" because, with the exception of the worst case pipeline supply scenario without Aliso Canyon, supplies are projected to be sufficient to meet the 1-in-35-year peak day demand, the report said.