Southern California working natural gas storage increases with higher cap at Aliso Canyon
On August 31, the California Public Utilities Commission (CPUC) voted to increase working natural gas storage by 67% to 68.6 billion cubic feet (Bcf) at Aliso Canyon, which increased the Southern California Gas Company’s (SoCalGas) total working natural gas storage to about 120 Bcf. Aliso Canyon is California’s largest underground natural gas storage facility and is located northwest of Los Angeles. The CPUC approved the storage capacity increase at Aliso Canyon to avoid potential energy price increases and enhance reliability for the upcoming 2023–24 winter.
In the absence of regulatory caps, Aliso Canyon has a total working natural gas storage capacity of 86.2 Bcf, making up 63% of the SoCalGas total. Aliso Canyon has been operating at reduced capacity since 2017, following a well leak in 2015 and the repair in 2016. Since Aliso Canyon was cleared to resume partial operation in 2017, the CPUC has revised the storage facility’s cap several times in response to changing market conditions. In November 2021, the CPUC capped Aliso Canyon inventory at 41.2 Bcf.
In April, SoCalGas and the San Diego Gas & Electric Company (SDG&E) petitioned the CPUC to modify the November 2021 decision. SoCalGas and SDG&E noted that increasing the storage level at Aliso Canyon would decrease the likelihood of price spikes like those during last winter. Natural gas prices at the SoCal Citygate pricing hub traded between $20.00 per million British thermal units (MMBtu) and $50.00/MMBtu for most of December 2022, partly because of low natural gas storage levels.
Several weeks of below-normal temperatures last winter on the West Coast increased heating demand, leading to relatively large natural gas withdrawals from storage. SoCalGas’s storage started the last heating season with 14% more working natural gas than its previous five-year average and ended the season with 30% less.
As of August 31, total natural gas storage in the SoCalGas system in Southern California was about 88% full, with 79.2 Bcf of working natural gas, when the previous 41.2 Bcf cap on storage at Aliso Canyon was still in place. The CPUC decision to increase Aliso Canyon’s working natural gas storage capacity is providing an additional 23% of capacity as of September 1, allowing Aliso Canyon to increase its natural gas inventory in the remaining weeks of the injection season that runs through October ahead of this coming winter heating season.
Our Southern California Daily Energy Report provides daily metrics on the region’s electricity demand, energy prices, and natural gas sendouts, receipts, and inventories.
Principal contributor: Katy Fleury
Tags: natural gas, storage, California, states, inventories/stocks