SDG&E and SoCalGas Pipeline
Safety & Reliability Project - Line 3602
Certificate of Public Convenience and Necessity (CPCN)

 

Background

On September 30, 2015, SDG&E and SoCalGas submitted a joint Application to the CPUC requesting approval for:    

  • A CPCN authorizing SDG&E to construct the proposed project.     
     
  • Recovery of the project revenue requirements in customer rates.
     

The Applicants’ proposal purports to address safety, reliability, and system capacity concerns and consists of:   

  • Construction of Line 3602:   A new 47-mile long, 36-inch natural gas transmission Pipeline from Rainbow Station to Miramar in San Diego County. 
     
  • Line Replacement:  Line 3602 would replace a 16-inch natural gas transmission pipeline from Rainbow Station to Miramar, which will be downgraded to a lower-pressure distribution pipeline.      

The utilities estimate construction costs to be $596 million with a forecasted annual revenue requirement of $82.7 million. However, the amount requested for rate recovery is based on actual costs that will be incurred, not the estimated costs presented in the application. The Project has no proposed cost cap.  

If approved, the proposed Project could increase the SoCalGas Backbone Transmission Service (BTS) rates by 45.3% over current levels. BTS rates are applied to both SDG&E and SoCalGas customers, as the CPUC set a “postage-stamp” style system where customers pay a common rate to deliver gas from the Citygate to any receipt point. 

 

Utilities' Amended Application 

On January 22, 2016 the CPUC issued a Ruling updating the proceeding schedule, and requiring the utilities submit an amended Application by March 21, 2016.  

 

 

ORA’s Position

ORA has reviewed the SDG&E/SoCalGas' amended application and recommends that the CPUC deny the utilities’ request to approve the CPCN to construct the Line 3602 Pipeline because SoCalGas and SDG&E have failed to demonstrate that the pipeline is necessary to address the SDG&E Southern System safety, reliability, and system capacity issues. 

Specifically, as directed by the CPUC's January 2016 Ruling, the utilities fail to: 

  • Provide specific Ten-Year forecasted information regarding the area served by proposed Line 3602 
      
  • Provide Ten-Year historic monthly daily annual maximum volumes through Line 1600 
      
  • Use the Proponent’s Environmental Assessment (PEA) definitions in SoCalGas/SDG&E’s comparison for cost effectiveness of other alternatives. 

Additionally, ORA filed a Motion to Dismiss the Application for Line 3602, and requested the CPUC order the utilities to pressure test Line 1600 as soon as possible. SoCalGas/SDG&E’s costs would be subject to reasonableness review.  

 

See ORA's:  

June 17, 2016 Motion to Dismiss the Line 3602 Application  

April 21, 2016 Protest to the Amended Application  

October 30, 2015 initial Protest to the Application  

 

 

CPUC Proceeding Docket

See the Proceeding docket to find a record of the case. 

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