The Record – Front Page
By Jeff Hood

March 25, 2000

LODI – Higher energy costs for Californians would be the ultimate result if a recommendation to reject a natural-gas storage plan for northern San Joaquin County is upheld, attorneys for the project argued.

A denial of the Lodi Gas Storage project by the California Public Utilities Commission would “make it impossible to develop any new utility infrastructure, including natural gas, electricity or telecommunications projects which are designed to address the general needs of the state, a region or a city,” the attorneys wrote.

Their comments were in reply to a proposed decision issued this month by Janet Econome, an administrative-law judge for the commission, which has the final say on whether the project goes forward. Econome recommended denial of Lodi Gas Storage’s application to become a public utility, saying the firm failed to show a need for the project, and that it is incompatible with community interests and does not benefit the area, among other reasons.

The company wants to pump natural gas into a depleted gas field when prices are low and withdraw it when prices are high, selling at a profit.

Comments on Econome’s recommendations are due Wednesday. Attorneys for Pacific Gas and Electric Company, electricity generator Calpine Corp., a pipefitter’s union and the CPUC’s Office of Ratepayer Advocates are among those who wrote in favor of Lodi Gas Storage.

Representatives of the California Farm Bureau Federation and residents near the project backed Econome’s recommendation. CPUC commissioners may act on Lodi Gas Storage’s application at their April 6 meeting in San Francisco.

Attorney Karna E. Harrigfeld, who represents several owners of property adjacent to planned Lodi Gas Storage facilities, praised the proposed decision but added the environmental impact report does not meet state standards, because it doesn’t adequately describe LGS’ alternatives.

Also, Harrigfeld takes issue with the mitigation measures described in the environmental report. “They are listed in summary fashion with insufficient analysis of their feasibility or effectiveness,” she wrote.

Farm Bureau attorney Ronald Liebert said the project puts the burden on landowners, who receive little if any benefit. Liebert cites eminent-domain powers that Lodi Gas Storage could use to force property owners to sell their land.

“LGS has asked the commission to let the market decide whether its project is warranted and to permit LGS to sell its products at market-based prices,” Liebert wrote. “In other words, LGS wants all the benefits afforded a private, unregulated entity plus the ability to exercise the public power of eminent domain.”

But energy companies and the Office of Ratepayer Advocates disagreed. Calpine, which operate gas-fired generating plants, said adopting the proposed decision would be a “significant step backward” from the CPUC’s history of encouraging competitive natural-gas markets and deter other companies from entering the state. Gas storage would ensure steady supplies, keeping electricity prices down, Calpine attorneys wrote.

And PG & E attorneys wrote that a reliable power supply in the state could be jeopardized by upholding Econome’s proposal, because neighborhood groups could block infrastructure projects. Those who would be affected by the project have been notified that they have until next week to file responses to the comments with the CPUC.