Storage Market Review Likely Despite ISP Clearance; PG&E Warns Price Cap Could Create $3 Billion Liquidity Requirement

On February 12 parties filed comments responding to the CPUC's proposed decision in I.23-03-008, which addresses the winter 2022–2023 natural gas price spike.

Recall that, rather than pursuing commodity price intervention, the PD pivots toward bill-shock mitigation by defining a “gas price spike event” as a 150% increase relative to the ten-year monthly average, triggering a temporary cap on core procurement charges, amortization of under-collections, and enhanced customer notice requirements.

The PD also enhances oversight of procurement incentive mechanisms (the Core Procurement Incentive Mechanism and the Gas Cost Incentive Mechanism) by requiring formal applications for any shareholder rewards and expands transparency through standardized monthly storage inventory reporting.

PD Lands in CPUC’s Natural Gas Price Spike Investigation

The PD finds that the winter 2022–2023 natural gas price spike resulted from a convergence of adverse market conditions.

CALIFORNIA REGULATORY INTELLIGENCEMC

Parties broadly accept the PD's conclusion that the winter 2022–2023 gas price spike was driven by market conditions rather than misconduct by any single regulated utility or storage provider. (Although the Sierra Club argues that SoCalGas either contributed to the spike or retained 21.6 Bcf of excess storage capacity, beyond reliability needs.)

Beyond this broad consensus, parties disagree over how the Commission should respond going forward.