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    News

    Coalition of Enviro & Grassroots Energy Groups Blasts CPUC Action Hastening Entry of LNG into CA


    (Sept. 4, 2004) -- Responding a 3-2 vote by the CA Public Utilities Commission to establish rules and infrastructure to hasten the entry of Liquefied Natural Gas (LNG) into CA -- including designating a Port of LB/WLB site as one of three statewide receiving points to send regassified (no longer liquid) natural gas into utility pipelines -- a coalition of environmental and grassroots energy groups (including LB Citizens for Utility Reform) has labelled the action a "backroom deal" that will force ratepayers to underwrite the costs.

    In a written release, Ratepayers for Affordable, Clean Energy (RACE) [groups listed below] said CPUC's action includes "rate-basing" of LNG infrastructure that will ease movement of gas from Mexico to California [via an Otay Mesa connection site presumably related to a proposed Baja, Mexico LNG site], meaning the cost will be borne by households and small businesses through an additional charge on their power bills.

    In an email to LBReport.com and area activists blasting the CPUC majority, LB Citizens for Utility Reform co-chair John Donaldson said in part, "It looks as if big energy is in control once again in California. Hold on to your pocketbooks and wallets."

    Members of the coalition vowed to fight the decision. "[I]t's clear that the LNG Snake Oil salesmen are trying to make a killing in California," said Rory Cox from Pacific Environment, who said 11 members of Congress, 15 legislators and thousands of citizens had asked the CPUC to hold public, evidentiary hearings on the need for LNG. The lawmakers who requested those hearings included Congresswoman Juanita Millender-McDonald (D., LB-Carson), Assemblyman Alan Lowenthal (D., LB-SP-PV) and state Senator Betty Karnette (D., LB).

    LBReport.com was the first LB area media outlet to report that the CPUC action includes designating a Port/WLB area "Salt Works Station" site as one of the three, statewide points where regassified natural gas could connect with utility pipelines.

    LBReport.com is also the first local outlet to report that the LB "Salt Works" site is the end point for a not-yet-built pipeline that LB Energy (LB's municipal utility) has said could bring regassified (no longer liquid) natural gas to So. Cal Gas lines from a proposed LNG receiving terminal (including a regassification plant) at the Port of LB. A Mitsubishi subsidiary, Sound Energy Solutions has applied to the Federal Energy Regulatory Commission (FERC) for permission to build and operate the LNG facility.

    The specific LB aspects of the arrangement were not discussed by PUC Commissioners at their Sept. 2 meeting. The PUC order, which instituted a rulemaking to "establish policies and rules to ensure reliable, long-term supplies of natural gas to California" focused on what it called an urgent need to boost CA's LNG supplies. It was supported by PUC Commissioners Peevey (author), Brown and Kennedy. Commissioners Lynch and Wood dissented.

    In a release issued through its public affairs office, CPUC said that by "streamlining the contract approval process for California utilities, the PUC immediately increased Californiaís access to natural gas supplies by as much as 500 million cubic feet per day. In addition, the PUCís Decision designated receipt points for access to imported Liquefied Natural Gas (LNG) -- a key step in locking in contracts now for natural gas that will come on-line in the next few years."

    In the release, CPUC Commissioner Susan Kennedy said, "The time to act is now" adding that the "decisions we make today and in the coming months will determine whether there will be another energy crisis in California, and Iím going to do everything I can to prevent that crisis from happening."

    The CPCU took three major actions: authorized utilities to purchase natural gas from a wider range of supply basins; put in place up-front standards for capacity acquisition (similar to AB 57 requirements on electricity) and established receipt points for LNG and ordered utilities to interconnect with LNG facilities when they are built.

    "LNG is not expected to come on-line until 2006-2007, but the contracts for those supplies are being negotiated now. By establishing the receipt points now, the Commission sent the signal that LNG suppliers will be able to deliver their gas to California," the CPUC release said.

    Commissioner Kennedy said in the release that states will be competing to meet their natural gas requirements with LNG, and "If we donít create the market for natural gas here in California today, that gas will go elsewhere."

    CPUC has separately asserted authority over approval of the proposed LB LNG facility. FERC has asserted exclusive jurisdiction over the safety and siting process; CPUC is challenging FERC's position in federal court.

    The Port of LB via a five-member non elected (Mayor appointed, Council approved) Board of Harbor Commissioners has separate local approval authority over the LB LNG proposal, including via an EIR/EIS on which the City Council could hear appeals.

    LB's elected City Council has decisionmaking power over a not yet built LB Energy pipeline from the proposed Port of LB LNG site to So. Cal Gas lines. LB Energy could levy a franchise fee on use of the pipeline from which City Hall could receive revenue.

    The RACE coalition said it filed materials with CPUC months ago, raising their concerns about importing LNG, including "undermining of renewable energy and energy conservation, the impact on global warming, the safety of communities where the LNG terminals are sited, and the international impacts on ecosystems in places like the Russian Far East and the Amazon Rainforest."

    Ratepayers for Affordable, Clean Energy identifies itself as a "coalition of organizations dedicated to clean energy and energy efficiency in California, and concerned with the local and global impacts of California energy policy. Members include: Amazon Watch, Border Power Plant Working Group, California Alternative Energies Corporation, Center for Biological Diversity, Environment California, Environmental Protection Information Center (EPIC), Greenpeace, Local Power, Long Beach Citizens for Utility Reform, Marin Clean Alternative Energy Now, Northcoast Environmental Center, Pacific Environment, Public Citizen, Vallejo Community Planned Renewal (VCPR), Womens' Energy Matters."


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