BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Adopt Rules and Procedures Governing Commission- Regulated Natural Gas Pipelines and Facilities to Reduce Natural Gas Leakage Consistent with Senate Bill Rulemaking Filed January 15, 2015 REPLY COMMENTS OF ENVIRONMENTAL DEFENSE FUND ON THE ADMINISTRATIVE LAW JUDGE S RULING ENTERING NEWLY REVISED NATURAL GAS LEAK ANNUAL REPORTING REQUIREMENTS INTO THE RECORD AND SEEKING COMMENTS Timothy J. O Connor Senior Attorney and Director Phone: (415) toconnor@edf.org Amanda Johnson Attorney, Oil and Gas Phone: (415) ajohnson@edf.org Dated: February 24, 2016

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Adopt Rules and Procedures Governing Commission- Regulated Natural Gas Pipelines and Facilities to Reduce Natural Gas Leakage Consistent with Senate Bill Rulemaking Filed January 15, 2015 REPLY COMMENTS OF ENVIRONMENTAL DEFENSE FUND ON THE ADMINISTRATIVE LAW JUDGE S RULING ENTERING NEWLY REVISED NATURAL GAS LEAK ANNUAL REPORTING REQUIREMENTS INTO THE RECORD AND SEEKING COMMENTS I. INTRODUCTION II. The ( EDF ) respectfully submits these reply comments to the California Public Utilities Commission ( CPUC or the Commission ) addressing the Administrative Law Judge s ( ALJ ) January 26 th Ruling ( January 26 th Ruling ) entering newly revised natural gas leak annual reporting requirements into the record and seeking comments. DISCUSSION EDF thanks the ALJ and the Safety and Enforcement Division staff for their time an effort on incorporating the comments of the parties and increasing the transparency of utility emissions. EDF will discuss each of the parties comments in turn, and appreciates their contribution to this proceeding. However, at the outset we must highlight that the Joint Utilities (Southern California Gas Company SoCalGas, San Diego Gas and Electric Company SDG&E and Southwest Gas Corporation SWG ) comments consist mostly of an attempt to limit the information gathered by the annual reports and decrease the transparency and accuracy gained by the new annual reporting requirements and to this we must specifically object. A. EDF s Reply to the Joint Utilities Comments a. Joint Utilities Comments on the Change to a Calendar Reporting Year The Joint Utilities commented on the change in the reporting year from the fiscal to calendar year they suggest this change should result in a delay to the deadline for reporting, stating they may not have the data available for the entirety of EDF argues that if this is the case, each member of the Joint Utilities must clearly demonstrate, with evidence to support, the reasons they cannot include the data. The Joint Utilities have known of this reporting requirement since the beginning of last year, and 1 Joint Utilities, Comments of SoCalGas, SDG&E and SWG on ALJ s ruling entering newly revised natural gas leak annual reporting requirements into the record and seeking comments 3 (Feb. 17, 2016). ( Joint Utilities Comments ). 1

3 have known of possible changes to the reporting requirements since discussions began before the first reporting period. The other reporting parties comments (Pacific Gas & Electric Company PG&E, and the Independent Storage Providers ISPs ) purportedly have no problem meeting the May 15 th deadline. 2 If there is some information that is not available for the 2016 reports (on 2015 data), the Joint Utilities should be required explain why they do not have it, and how they will change their practices to ensure that the data is captured for the 2017 reports. b. Addition of a Row to Report Catastrophic Failures The Joint Utilities dispute the addition of a row to report catastrophic failures for three reasons, 1) what constitutes a catastrophic failure is vague and 2) that reporting such emissions could distract from the intent of SB 1371, and 3) it could expand the scope. 3 EDF argues that none of their reasons justify the deletion of the row to report catastrophic failures. 4 EDF agrees that what might constitute a catastrophic failure is vague, however clarifying the definition could fix that issue, giving utilities the proper notice to report. 5 On the definition argument, EDF recommends the Commission consider establishing a definition of catastrophic failure to reduce ambiguity. Here, a definition that takes into account the inability to repair the leak within a certain period of time, or the volumetric flow rate of the leak would satisfy. On the scope argument, EDF expressly disagrees, citing the broad scope of SB 1371 to require the CPUC to minimize leaks as a hazard while improving transparency and accountability to the public. 6 2 PG&E, Comments of PG&E on Administrative Law Judge s ruling entering newly revised natural gas leak annual reporting requirements into the record and seeking comments (Feb. 17, 2016) ( PG&E s Comments ); ISPs, Initial Comments of ISPs on ruling entering newly revise natural gas leak annual reporting requirements into the record and seeking comments (Feb, 17, 2016) ( ISPs Comments ). 3 Joint Utilities Comments at 4. 4 In order to correct the record, EDF disputes the footnote arguments made by the Joint Utilities stating that EDF s suggestion of a reporting row for catastrophic failures was procedurally improper, and that the procedural issue is reoccurring. First, if the Joint Utilities actually believed that EDF s comments were procedurally improper they could have filed a motion to strike, which they did not. In fact, Rule 14.3(d) which they cited to prove improper procedure does not apply to these comments, it only applies to comments on proposed or alternate decisions. Here there was no decision, the ALJ merely requested comments on the topic of reporting requirements. And second, EDF suggested the row when it learned of the massive Aliso Canyon Storage Facility leak. Prior to that leak, the need for reporting of large scale pollution events was known, but the scope of the catastrophic leak at Aliso Canyon was not known. The April 22 nd EDF Reply Comments responded to statements made by SoCalGas at the workshop in between the initial commenting period, and reply comments. Though those statements are not a part of the written record, SoCalGas made them in front of all the parties and the ALJ. Again the Joint Utilities did not file a motion to strike, and the cited Rule 14.3(d) does not apply. 5 Though the utilities claim the definition is vague, they recognize the these kind of events require specialized consideration and collaboration with various regulatory agencies, suggesting that they do understand what the Commission intended by catastrophic leak. The Aliso Canyon Storage Facility leak clearly falls within the catastrophic leak definition, to remove any ambiguity the Commission might want to draw a line as to how excessive a leak must be to qualify, as EDF suggests. 6 CAL. PUB UTIL. CODE 975(b)(1);

4 The SB 1371 bill text clearly requires the determination of a system-wide leak rate, 7 which includes all leaks on the utilities systems, especially those massive leaks that contribute to a large portion of the utilities emissions. If the scope of SB 1371 were as narrow as the Joint Utilities claim it to be, it would be impossible to minimize leaks as a hazard, and it would purposefully undercount system-wide emissions resulting from events like Aliso Canyon and any of the other potentially large leaks that may occur on the Joint Utilities systems on an ongoing basis. The Joint Utilities also make the claim that they are unaware of any established methodology used to determine the release of methane. 8 However, this point seems inaccurate in so far as SoCalGas has funded, and thus is aware, of the measurements taken by airplanes, towers and satellites at Aliso Canyon. 9 Similarly, this purports to run counter to express statements of SoCalGas that they themselves can measure the size and will mitigate the catastrophic leak at Aliso Canyon. 10 Finally, contrary to arguments presented, the reporting of leaks to the Commission is also not inconsistent with other regulatory regimes. 11 For the reasons stated, the Commission should reject the Join Utilities argument to delete the catastrophic failures reporting requirement, and should consider clarifying the definition of what constitutes a catastrophic failure. c. Improving the System-Wide Gas Leak Rate Calculation The Joint Utilities recommendations for changing the proposed System-Wide Gas Leak Rate Calculation misrepresent SED s characterization of throughput, seek to obscure the actual amount of emissions by breaking it down into emissions factor categories, and would not comply with SB The issue with the original calculation based on PHMSA s LAUF, was that inaccuracies among the many factors could obscure the leaked emissions, not that the throughput had no relevance. 13 The Joint Utilities argument that throughput is irrelevant because there are few emission sources that can be directly correlated to throughput 14 is inaccurate. EDF supports the proposed system-wide leak ratio because it clearly illustrates the amount of emissions compared to the amount of gas used, which is plainly relevant to determining the beneficial use of methane. The Joint Utilities suggestions to remove 7 975(e)(6). 8 Joint Utilities Comments at 5. 9 Aliso Canyon Natural Gas Leak: Preliminary Estimate of Greenhouse Gas Emissions, ARB.ORG (Feb 21, 2016) 10 What We Are Doing: Our Five Commitments to the Community, SOCALGAS.COM (last visited Feb. 24, 2016). 11 Though the California Air Resources Board ( CARB ) and the Division of Oil, Gas & Geothermal Resources ( DOGGR ) may have overlapping authority, the Commission provides the rates received by utilities for that gas lost and therefore have a need to know the extent of such leaks. 12 Joint Utilities Comments at R , Administrative Law Judge s Ruling Entering Newly Revised Natural Gas Leak Annual Reporting Requirements into the Record and Seeking Comments, Attachment 1, 2 (Jan. 26, 2016). 14 Joint Utilities Comments at 7. 3

5 throughput and break down the calculation into a chart of individual components would clearly limit the transparency of emissions calculations. 15 SB 1371 requires a calculation 16 of system-wide leak rate, which under a plain reading should encompass all of the emission on the system. EDF recommends the Commission require the utilities to report the ALJ s proposed system-wide leak rates, 17 as well as add the additional system-wide leak rate for storage facilities with throughput as a denominator. 18 d. Add Standardized Emission Factors EDF agrees with the Joint Utilities that standardized emissions factors are necessary and that a process should be put in place to update or remove their use when direct measurements are available. 19 EDF does not agree that the calculation of engineering estimates, as the Joint Utilities suggest, requires coordination among utilities. CARB and the Commission have set out factors for the engineering estimates that should be used to calculate emissions, and the utilities should not deviate from them. e. Joint Utilities Attachment A. The Joint Utilities suggest changes to the reporting requirement spreadsheets represent their increasingly narrow view of the scope of this proceeding, as does their recommendation to delete any column they claim does not contribute to emissions estimates. 20 All of the categories and columns the Joint Utilities suggest deleting are relevant to determining trends in emissions, and should not be removed from reporting requirements. Columns such as the total number of days until permanent repair, in every spreadsheet, should not be deleted because they ease the regulatory burden, so that CARB and the Commission need not do the calculation for each leak. The Joint Utilities also question whether the age of a pipe has relevance and suggest deleting that column. 21 It is clear that older pipes are likely to fail more, and in its last general rate case (2015) SoCalGas stated that the age of pipes is relevant in that all components of the gas distribution system have a finite useful life that must be observed, and repairs anticipated. 22 There is an inherent tension between testimony in that proceeding that age of pipes is relevant to leak proneness and comments here that age of pipes is not relevant. The reporting requirements must not be limited to information that is used to calculate emission factors as Joint Utilities request. SB 1371 was intended to make more 15 Joint Utilities Comments at 6-8. However, EDF does not join in the argument that the Commission must use the utility suggested emissions factors (e)(6). 17 Ruling, Attachment 2 at EDF, Comments Of EDF on the ALJ s Ruling entering newly revised natural gas leak annual reporting requirements into the record and seeking comments 8-9 (Feb 17, 2016). 19 Joint Utilities Comments at Id. at Attachment A. 21 Id. at Attachment A. 22 A , Frank Ayala Revised Direct Testimony FBA-6. 4

6 III. transparent the opaque way utilities operate their systems and manage leak repair, and the Joint Utilities proposed changes to the reporting spreadsheets would be contrary to that intention. B. EDF s Reply to PG&E s Comments a. Component Emissions and Pipe Schedule Information EDF does not agree with PG&E s recommendation that the bleed rate and manufacturer information be voluntary and only provided if it is readily available. The bleed rate of a pneumatic device is clearly relevant to the actual emissions from that device, and though it may take effort on the front end, compiling this information into an accessible form will allow utilities and regulators to make the appropriate decisions to reduce methane emissions. b. Revised Emissions Factors EDF does not agree with any of PG&E s suggested changes that require use of an emissions factor instead of an engineering estimate. 23 Using actual measurements about each leak is always better than emission factors. Because there are few components where engineering estimates are requested, calculating emissions based on an engineering estimate should not be overly burdensome. EDF also agrees that in 2017 the calculation for meter sets should change and be based on leaks found, not all meter sets on the system. C. EDF s Reply to the ISPs Comments a. Attachment 2 EDF agrees with the ISPs recommendation that the system-wide leak rate and other references to leaks throughout the reporting documents be changed to include emissions where that is intended. 24 EDF supports their first option of adding emissions to those areas such as the system-wide leak and emission rate, and not the second option narrowing the reporting requirements to leaks as defined. b. Attachment 3 EDF agrees with the ISPs recommendation that and additional column be added that would provide the option for a respondent to explain or comment on each line. 25 EDF also believes that the ISPs request to use PG&E s pipeline quality specifications 26 is reasonable, however EDF believes that all listed components should still be required. CONCLUSION For the reasons stated above, EDF respectfully requests that the Commission consider these reply comments on the ALJ s January 26 th Ruling entering newly revised natural gas leak annual reporting requirements into the record and seeking comments. 23 PG&E s Comments at ISPs Comments at Id. at Id. at 6. 5

7 Respectfully signed and submitted on February 24, ENVIRONMENTAL DEFENSE FUND /s/ Timothy J. O Connor Timothy J. O Connor Senior Attorney and Director Phone: (415) toconnor@edf.org /s/ Amanda Johnson Amanda Johnson Attorney, Oil and Gas Phone: (415) ajohnson@edf.org 6