Aliso Canyon Workshop Comments: Demand, Supply Risk, and Cost
Three parties filed April 28 opening comments following an Aliso Canyon Biennial Assessment Workshop earlier this month. (See CRI's workshop report here.)
MC
At issue: The CPUC is deciding how much natural gas must remain in storage at Aliso Canyon to maintain reliability without imposing unnecessary costs on ratepayers. There are three main variables at play: how much demand should be assumed, how much supply can fail at once, and how to measure the cost of getting the levels wrong.
- Sierra Club presses for an inventory level of 30 Bcf.
- SoCalGas opposes any reduction to the field's inventory level and proposes a new economic framework designed to quantify ratepayer harm.
- The Indicated Shippers anchor the record with Commission-validated cost figures and push to slow the timeline.
Sierra Club
Sierra Club advances the most aggressive inventory position. Its 30 Bcf figure traces to a workshop exchange where Dr. Issam Najm got Energy Division staff to confirm that 19 of 27 winter 2025-2026 reliability scenarios required only 44% of capacity (about 30 Bcf against the 68.6 Bcf maximum). Those scenarios already use SoCalGas's 1-in-10 peak day forecast, which actual demand has exceeded once in 22 years.
Sierra Club attacks SoCalGas's peak demand forecast at the input level instead of assessing its mathematical structure. SoCalGas uses temperature data back to 1950 despite acknowledging warming trends in 2024 California Gas Report Workpapers. Sierra Club argues this selection of data inflates demand and pushes to replace SoCalGas's forecast with the California Energy Commission's independent forecast (year-ahead now, with 5- and 10-year products incorporated as the CEC develops them).
On Receipt Point Utilization (RPU), Sierra Club aligns with Energy Division and uses SoCalGas's workshop slides against it. SoCalGas concedes on one slide that 100% RPU is reasonable when pipeline capacity is reduced, then on another applies low RPU values on top of outage assumptions. The two positions contradict each other.
At its core, Sierra Club's safety argument is an appeal to statute. Public Utilities Code §451 and Senate Bill 380 (which references "safety" more than 20 times) place safety above reliability. Sierra Club argues that the following instances are not mere facts, they support a claim that the CPUC must prioritize safety over reliability.
- The 2015 Aliso Canyon blowout
- A 2017 Line 235 explosion
- A December 2025 Castaic landslide
- A peer-reviewed UCLA study on adverse pregnancy outcomes
- Ongoing emissions, including carcinogens
On economics, Sierra Club defends the current threshold framework (a simple comparison that notes inventory reductions when SoCal Citygate forward prices exceed 50% above Henry Hub and historical levels). SoCalGas wants to replace this framework. Sierra Club's filing concedes that the framework's analysis is basic but argues more complexity would only delay biennial reviews.
Sierra Club also notes that existing triggers were adopted in the CPUC's 2024 Biennial Assessment decision (D.24-12-076) over party objections they were biased toward keeping Aliso open. Sierra Club's argument, distilled to its purest form: if a framework that is geared toward retention still supports reduction, the case for reduction is stronger, not weaker.
SoCalGas
SoCalGas criticizes the idea of any inventory reduction and proposes a replacement framework designed to produce the first quantified ratepayer harm number.
SoCalGas's RPU critique points to actual conditions:
- 46% during 2021 Winter Storm Yuri;
- 36% during the 2024 Arctic Blast;
- 36% during the 2025 Southwest Winter Storm; and
- 25% during 2026 Storm Fern.
SoCalGas's pipeline critique is specific. Energy Division reduced pressure while maintaining full receipt capacity, left constrained assets in the model, and averaged outage impacts. SoCalGas counters with event data:
- A 655 MMcfd loss on Line 4000/4002;
- 150 MMcfd capacity loss on Line 5000 maintenance; and
- 650 MMcfd lost during the December 27, 2025 Line 225 force majeure at Wheeler Ridge.
SoCalGas also argues that Energy Division chose the wrong outage scenario for winter 2030-2031 (Line 235 West, east of Quigley) because parallel paths like Line 335 readily reroute that flow. Further, reliability for 2030-2031 depends on upgrades that are not complete:
- Quigley;
- Honor Rancho; and
- Ventura (which is necessary to refill La Goleta every summer).
Until these projects are proven under peak conditions, SoCalGas says, any reduction is premature.
SoCalGas's economic critique attacks a logical flaw in Energy Division's analysis. ED's threshold comparison uses forward prices as evidence that storage reductions are economically safe, but those forward prices already assume Aliso Canyon stays open at current inventory levels. This analysis cannot measure what would happen to prices if Aliso were cut, because the prices it relies on assume Aliso isn't cut. Jean Spencer conceded this point at the April 15 workshop.
In response, SoCalGas offers a new framework: a Predictive Price Impact Analysis and Storage Behavior and Price Volatility Analysis, which combines multi-basin price spreads and simulation-based modeling. This design would isolate the storage premium and output a "theoretical premium to ratepayers of reduced storage capacity." SoCalGas ties that value to a real mechanism. The Unbundled Storage Program is fully subscribed at 25 Bcf and returns 100% of net revenues to ratepayers. A 10 Bcf reduction would be borne entirely by the Unbundled Storage Program, removing a price-mitigation tool and its associated revenues.
Strategically, SoCalGas proposes replacing the current biennial cycle with a cycle that examines projected reliability conditions five years forward. SoCalGas proposes to:
- Apply RPU after accounting for outages (rather than relative to nominal capacity);
- Replace the biennial assessment methodology's 101.5 MMcfd unplanned outage figure with a per-cycle determination; and
- Model outages by asset removal.
SoCalGas is looking to place the first authoritative ratepayer harm number into the evidentiary record under a method the CPUC has invited it to develop.
Indicated Shippers
The Indicated Shippers take no inventory position and mostly adopt SoCalGas's critique. They lay the groundwork for slowing the proceeding.
The Shippers frame Aliso Canyon as critical to regional reliability and extend that argument beyond SoCalGas's territory. The state's August 2020 rotating outage (the first such event in nearly two decades) showed how gas storage backs generation when imports fall and renewables underperform. This expanded geography widens the affected ratepayer base to CAISO Northern Zone customers, whom the refiner clients don't serve.
The Shippers' strongest evidence is historical. A 2021 CPUC decision (D.21-11-008) attributes approximately $599 million in excess costs to CAISO south-zone customers and $317 million to north-zone customers due to constrained Aliso inventories. These are Commission-validated figures, not modeled outputs.
INSTANT ANALYSIS
The economic analysis that everyone agrees is inadequate is going to be replaced (or supplemented). SoCalGas has proposed the only specific replacement, and if the CPUC adopts any version of it, SoCalGas will produce the first dollar estimate of ratepayer harm associated with a reduction in Aliso inventory.
Sierra Club’s counterargument is that safety sits above all else. Its case is factual and legal, not expressed in a comparable numerical framework. SoCalGas is producing numbers, but Sierra Club is saying those numbers are largely irrelevant.
The 2030–2031 reliability picture remains unsettled. SoCalGas ties any reduction to completion of Quigley, Honor Rancho, and Ventura. Energía Costa Azul diversions of 425–440 MMcfd and Line 225 vulnerability at Wheeler Ridge compound the risk regardless of how RPU is resolved.
Reply comments are due May 5.