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Heading into 2017, the ratepayer advocacy group UCAN was opposed to SDG&E’s plan to build a new pipeline. Now, it supports the project – but even SDG&E disagrees with some of the group’s reasoning.
Two years into a regulatory battle over a $600 million natural gas pipeline that San Diego Gas & Electric wants to build, ratepayer advocacy groups have found themselves divided about the project and the safety of an existing pipeline.
SDG&E wants to build a new 36-inch pipeline to replace an aging 16-inch pipeline that brings gas into the county. The company believes the project would increase the safety and reliability of the region’s natural gas system.
In fall 2015, SDG&E asked the California Public Utilities Commission for permission to build the pipeline along with Southern California Gas Company. SoCalGas and SDG&E have the same parent company, San Diego-based Sempra Energy.
Right now, the CPUC is hearing from everyone with an interest in the case, a lengthy process that has generated a voluminous paper trial full of technical reports, conflicting testimony and disputes over mundane issues of administrative procedure.
Hanging over the dispute is the specter of San Bruno, a San Francisco suburb where in 2010 a Pacific Gas and Electric pipeline exploded, killing eight people and injuring dozens more.
New regulations following that explosion are why SDG&E is at a crossroads, deciding whether to spend $120 million to test its old 16-inch line or $600 million to build a 36-inch line to replace it.
According to SDG&E, the cost to test and ensure the safety of the old 16-inch pipeline is so high that it might as well just build a new, bigger pipeline – particularly if those tests find that the old line needs major repairs. But the company also wants to keep the 16-inch pipeline in the ground and send some gas through it at a much lower pressure, something that could reduce the risk of it exploding or the consequences if it did.
SDG&E has straddled a fine line when it talks about the safety of the old pipeline, which was built in 1949. SDG&E is confident the pipeline is operating safely today, said company spokeswoman Jennifer Ramp. That’s in part because the company has already partly reduced the pressure of the gas flowing through it, but Ramp said that “does not address long-term concerns about its safety, which primarily arise from the manufacturing process of the time period.”
Several ratepayer and environmental groups have taken a skeptical view of the new, larger line, arguing that demand for natural gas is expected to drop in coming years. Plus, they reason, if the line isn’t unsafe, why replace it?
But one group, the San Diego-based Utility Consumers’ Action Network, has broken ranks.
Heading into 2017, the group, known as UCAN, was opposed to a new pipeline.
“Looking forward to 2017, UCAN is opposing SDG&E’s attempt to raise customer’s [sic] rates to build a new $639 million gas pipeline,” its executive director, Donald Kelly, wrote in a newsletter. “UCAN’s pipeline expert is analyzing the plan to help us recommend other more cost effective alternatives to SDG&E’s costly new pipeline proposal.”
Typically, groups hire expert witnesses who agree with their already stated positions.
But in this case, UCAN changed its entire position based on its expert witness’ analysis. Now, it supports SDG&E’s plan to build a bigger pipeline.
The expert, Margaret Felts, has helped divide UCAN from the rest of the ratepayer advocacy groups involved in the case.
The Southern California Generation Coalition, a front group for the Imperial Irrigation District and the Los Angeles Department of Water and Power, among other public entities that use energy, said “it is difficult to fathom why a SDG&E ratepayer advocacy organization like UCAN would support Line 3602,” a reference to the new pipeline. The Generation Coalition said UCAN’s main argument for replacing the pipeline – that the line has been in the ground for more than 50 years – is frail.
Not only that, but Felts has taken a position of caution beyond anything argued by SDG&E itself. She said the old line is dangerous and “should be removed from service as soon as practicable because the physical condition of the line makes it risky to continue operation,” even at a lower pressure.
That part of her analysis argues against SDG&E’s position that the line is safe to operate now and in the future at a lower pressure, a position that Felts said she took based on material that SDG&E provided as part of the CPUC proceedings.
SDG&E argues that its plans to lower the pressure on the old line “effectively avoids the risk of a propagating rupture.”
Felts faced a lengthy cross-examination in early October by attorneys from the San Francisco-based Utility Reform Network and the Protect Our Communities Foundation, which is based in San Diego. Like the Generation Coalition, they have been fighting against the new, larger pipeline.
One of the board members of Protect Our Communities, Bill Powers, has expressed bafflement that UCAN has taken the position it has, and has urged reporters to question UCAN’s motives. Kelly, the group’s leader, has not been available for comment in recent days.
But attorneys for other ratepayer advocates, along with a CPUC administrative law judge, questioned some of Felts’ numbers, her understanding of some of SDG&E’s material and an assertion she made that pipelines are only designed to last 50 years, the latter of which raised concerns for the Generation Coalition.
While Felts said some pipelines can operate for longer than 50 years, she argued that generally pipeline operators should be thinking about replacing lines that are 50 years or older. The 16-inch pipeline is 68 years old.
The Generation Coalition is worried that adopting Felts’ position could create a standard for the CPUC to impose an “unbearable as well as wholly unnecessary burden on SoCalGas and SDG&E ratepayers” – essentially a justification for companies to move forward with costly pipe replacements even if the pipe in question is functioning fine.
SoCalGas and SDG&E operate 2,800 miles of transmission lines that are over 50 years old, said Catherine Yap, an expert witness for the Generation Coalition. She estimated that replacing all those lines could cost more than $18 billion.
The Generation Coalition has been skeptical of the need for major new gas pipelines. It points to an industry study that found 85 percent of pipeline accidents don’t have anything to do with a pipeline’s age.
But it and other opponents are on a fine line of their own. What if a ratepayer group argues against replacing a pipeline, then that pipeline explodes?
Investigators found the San Bruno pipeline explosion was the result of a defective pipe – not age. But Felts, who also did some expert witness work on the San Bruno investigation, argues that if the San Bruno pipeline had been replaced earlier, shortly after it turned 50 years old, “they would have replaced it before it failed.”