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Commissioner Blog: Reducing Methane Emissions from California’s Natural Gas System - An Important Step Forward

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By Commissioner Clifford Rechtschaffen

On August 15, 2019, we adopted a groundbreaking decision to reduce methane emissions from the natural gas system, demonstrating California’s continued leadership in combatting climate change.

Background

In 2014, California passed Senate Bill (SB) 1371, with the goal of minimizing methane emissions from the natural gas system. Methane, the main constituent of natural gas, is a powerful greenhouse gas, 84 times more potent than carbon dioxide over a 20-year time frame.

2015 Decision

In 2015, the CPUC initiated a Rulemaking to accomplish the goals of SB 1371. Two years ago, as part of that Rulemaking, we required California’s largest gas utilities to file annual reports tracking methane emissions from their systems, comply with 26 best practices to reduce these emissions, and file biennial compliance reports.

This was a significant step forward. But there were issues that we could not fully address for want of data and experience in implementing these new requirements.

Moving Forward

With the benefit of utilities’ compliance plans, utility experience in implementing them, and input from a range of stakeholders, including consumer advocates and environmental groups, we were able to advance further with this new decision.

Going forward, utilities are required to evaluate the cost-effectiveness of their proposed measures to reduce methane emissions and include the social cost of methane in making this evaluation. For now, we will only be using this evaluation for informational purposes. But it will allow us to identify the measures that give us the biggest bang for the buck and help ensure that we are using our limited resources as efficiently as possible in addressing climate change. Including the social cost of methane will also ensure that we don’t undervalue the benefits of potential methane reduction measures.

We also adopted a limit on the extent to which California’s two largest gas companies can recover from customers the cost of methane emissions leaked from their systems, creating an economic incentive for utilities to minimize these emissions. These methane emissions are part of what is known as “lost and unaccounted for gas,” or LUAF. Specifically, beginning in 2025, if these utilities fail to reduce their methane emissions by at least 20 percent below the 2015 baseline, they will not get rate recovery for the amount of methane emissions exceeding this target. These emission reduction levels are feasible and in-line with the utilities’ own estimates of what they will achieve over this time period.

California Leads the Way

We are one of the very first utility regulators to adopt such a measure, which ties gas companies’ environmental performance to their bottom line. It is appropriate because we are authorizing very large utility expenditures on methane reduction measures and we want them to be successful. The utilities have 5 years and two additional rounds of compliance plans to achieve this target.

While the potential economic impact on the utilities if they do not comply is modest, the message is important. Californians are paying for utilities’ methane reduction measures. We expect results.

 

Ensuring Essential Communications Support for Consumers in the Wake of a Disaster

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In our ongoing efforts to strengthen consumer protections, we adopted an emergency disaster relief program for customers of communications service providers in the wake of a disaster.

At our Voting Meeting on Thursday, August 15, 2019, the Commissioners approved an emergency disaster relief program to ensure that wireline and wireless customers who experience a housing or financial crisis due to a disaster keep vital telecommunications services and receive support.

Communications service providers are now required to implement the emergency disaster relief protections for customers in affected areas in which a State of Emergency is called by the Governor of California or the President of the United States. This means that in the case of future disasters, consumers will automatically be protected under those circumstances until the emergency is concluded.

"These consumer protections for communications customers provide a minimum set of protections for helping communities deal with the wrenching aftermath of disasters," said Commissioner Martha Guzman Aceves. "These protections include expanded access to 2-1-1, waiver of call forwarding fees, and providing Wi-Fi and loaner phones for customers in shelters."

"I support the consumer protections this decision proposes to assist to those affected by disasters and the proposals to keep communication lines open in times of need," said Commissioner Genevieve Shiroma.

We also took action today to establish a customer outreach plan to educate Californians about 211 services. This service may be particularly valuable during an emergency because it can provide an easy and accessible way to disseminate disaster-specific information. For example, 211 service could assist residents of affected areas in accessing information about evacuation, shelter, food, medical, and recovery services.

Furthermore, the interim protections for California LifeLine participants adopted in D.18-08-004 remain in effect until permanent protections for the California LifeLine Program are adopted separately in Phase 2 of this proceeding.

The CPUC's actions help ensure that the State can effectively respond to disasters that affect utility service, and addresses important consumer issues faced by communities across a range of potential threats and emergencies.

Our recent vote does not change any of the notice, communication, outreach or other requirements of the CPUC's ongoing Wildfire Mitigation Plan and De-Energization proceedings.

Read the proposal voted on.

View documents related to the proceedings.

Join the California, Nevada, Oregon, Washington, and British Columbia Public Utility Commissions for a Wildfire Dialogue

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The West Coast Utility Commissions Wildfire Dialogue will feature Commissioners from western state utility commissions, experts, and participants who will share their perspectives and evolving approaches to address rapidly changing wildfire risk aggravated by climate change and other factors. This workshop will focus on impacts to energy utilities, customers, and communities, as well as lessons learned by western states to help manage and mitigate wildfire risk.

When:
Friday, August 16, 2019, 9 a.m. - 4:30 p.m.
 
Where: Oregon Convention Center, 777 NE Martin Luther King Blvd., Portland, OR 97232
 
Cost: Free; open to the public and press
 
Registration: To register for this event, please visit: West Coast Utility Commissions Wildfire Risk Dialogue. There are two options to participate:

  • Attend in Person
  • Attend by Phone or View Online: Register online and call-in and WebEx information will be provided to you prior to the event.

Note members of the press should register using the Media-specific tickets on the registration page.

This is not a decision-making meeting for the participating Commissions and a quorum of commissioners will not be present from the California Public Utilities Commission.

More Information: www.cpuc.ca.gov/WestCoastWildfireDialogue

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