50-Mile Gas Pipeline Replacement Approved, $677 Million Cost to be Reviewed

Published On: February 11, 2020

On February 6, 2020, the California Public Utilities Commission (CPUC) approved the replacement of Line 1600, a 50-mile natural gas pipeline, but also approved a review of the replacement cost – $677 million.

With a 4-0 vote, CPUC approval requires that the cost of the line’s replacement and testing be scrutinized in a follow-up phase, but it also rejected project alternatives. Commissioner Martha Guzman Aceves acknowledged the challenge facing regulators, noting this project was a 50-year investment. CPUC also acknowledged that while this decision seems counterintuitive, given the State’s push to decarbonize and end the use of fossil fuels, the replacement of the line is necessary.

In a letter addressed to CPUC, a collective of California environmental organizations urged the rejection of the pipeline project, stating that, because California is cutting back on natural gas use, the proposed nearly $700 million investment would be for an unnecessary line:

“This avoidable $677 million gas pipeline investment will be a stranded asset from its first day of operation… New investments in the gas system will make the transition away from fossil fuels more challenging and more costly.”

Originally constructed in 1949, Line 1600 is a 16-inch-wide pipeline. Submitted by SDG&E and SoCal Gas as a hybrid plan, the project will be done in 19 segments. The first 14 segments consist of replacing 37 miles of the line that run through more urban, populated areas. The remaining five segments will occur along 13 miles of the line located in rural areas, which will undergo high-pressure water testing. SDG&E said that some of the work in the segments can overlap to help reduce the time needed to finish the job.

The Commission also approved launching a rulemaking to delve into gas supplies and the viability of the existing infrastructure in light of the State’s efforts to reach a net-zero emission economy in 25 years.

About the Author: Jesus Arredondo

Jesus Arredondo is an Energy Industry Analyst and former State of California official. He can be reached at jesus at govreport.org