Routine Upgrade or Policy Precedent? PG&E's Hinkley Compressor Station Collides with General Order 177
A seemingly routine electrical upgrade at PG&E's Hinkley Compressor Station has potential to become a test case for how California will handle major gas infrastructure investments as the state moves away from fossil fuels.
On November 3, 2025 a prehearing conference convened for PG&E’s application to obtain a Certificate of Public Convenience and Necessity (CPCN) for upgrades at the Hinkley station. Administrative Law Judge Maria Sotero noted that the case is subject to CEQA and a draft Mitigated Negative Declaration has already been issued. PG&E stated that the scope is limited to obtaining the CPCN and environmental approval.
Cal Advocates emphasized that, due to significant project costs and timing prior to an approved General Rate Case, cost reasonableness and affordability must be examined in this proceeding. TURN initially raised concerns about need and demand assumptions but withdrew some earlier objections, instead supporting review of project necessity and cost scope.
- The parties and ALJ discussed whether cost recovery should be addressed now or deferred to a GRC, with PG&E asserting that while cost estimates and caps fall within CPCN review under General Order 177,* actual cost recovery should occur in rate cases.
- TURN cautioned against creating a “chicken-and-egg” problem where CEQA approval of only the full-scale project could later preclude authorizing a smaller, less costly alternative.
- Both TURN and Cal Advocates also raised concerns over potential stranded assets in light of declining gas demand and state decarbonization goals. TURN later clarified that, based on discovery and technical discussions, it no longer views the project as related to gas throughput capacity,** though broader stranded asset questions remain relevant.
ALJ Sotero requested clarity from PG&E on whether any project components are tied to gas throughput or station capacity, suggesting PG&E file supplemental information explaining each equipment component’s purpose and whether it is affected by throughput. PG&E agreed to provide this through a motion to supplement the record.
PG&E requested an expedited schedule due to emerging equipment reliability issues at the station and noted it may seek emergency treatment under GO 177 if conditions worsen. Cal Advocates opposed schedule acceleration, arguing for adequate review time.
INSTANT ANALYSIS: This proceeding could inform how the state will treat major gas investments under GO 177. It is a platform for serious discussions about cost scope, stranded assets, procedural pace, and whether "throughput-independent" equipment still risks becoming a stranded asset in a declining-gas future.
FOOTNOTES
- *GO-177, which arose in 2022, requires gas utilities to obtain a CPCN before building certain large infrastructure projects, although it contains an "emergency exemption."
- **Throughput refers to the volume of natural gas flowing through a pipeline or compressor station over time (i.e., how much gas the facility is transporting or processing). Projects associated with increasing throughput are designed to expand capacity or move more gas; projects considered “throughput-independent” are those needed simply to keep the facility operational, regardless of how much gas flows through it.
