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    News w/ Audio Coverage

  • CA Public Utilities Comm'n Orders Regulatory Investigation re LB LNG Proposal; CPUC Gen'l Counsel Says FERC Assertion Of Exclusive Fed'l Jurisdiction Legally Incorrect And Inapplicable To CPUC's Action

  • LB Activist Bry Myown Travels to SF To Be Heard, Says LB Is Apparently Being Made "Test Case" For Rest of Nation On LNG Siting & Safety

    (April 22, 2004, updated April 24 & 26) -- In a high visibility confrontation with federal authorities carrying local, statewide and potentially national implications, the CA Public Utilities Comm'n put itself on a collision course with the Federal Energy Regulatory Commission (FERC) as CPUC Commissioners voted unanimously at their April 22 meeting to adopt an "Order Instituting Investigation" (a regulatory proceeding) into a proposal by Mitsubishi subsidiary "Sound Energy Solutions" (SES) to build a Liquefied Natural Gas (LNG) facility in the Port of LB.

    LB activist Bry Myown travelled to San Francisco to attend the CPUC proceeding. In her comments to the Commission delivered on behalf of LB Citizens for Utility Reform, the Sierra Club and LB Citizens Advocating Responsible Development, Ms. Myown said LB is apparently being made a "test case" nationally on how future LNG facilities will be sited. She thanked the CPUC for its actions to date...and urged support for CPUC's position by CA's Governor, federal delegation and state legislators.

    The unanimous CPUC vote followed a bluntly worded presentation by CPUC General Counsel Harvey Morris, who said CPUC's order could lead to discovery proceedings...and indicated he considers FERC's order asserting exclusive federal jurisdiction over siting and safety issues incorrect legally and inapplicable to CPUC's April 22 action. Mr. Morris further indicated the CPUC intends to seek a rehearing from FERC of its order, an action which he indicated other state and local agencies may also take.

    CPUC president Michael Peevey followed Mr. Morris with a similarly stern statement, stressing that "safety, safety should be the paramount concern to us as regulators." Other CPUC members voiced similar comments.

    Following the vote, CPUC president Peevey said to CPUC's General Counsel, "Mr. Morris, you have your marching orders."

    Prior to the vote, the Commission heard LB activist Bry Myown thank the agency on behalf of several groups for its record to date, stating in pertinent part:

    Good morning. I am here speaking on behalf of Long Beach Citizens for Utility Reform, and because only one of us is here today, I'm also transmitting the views of the Sierra Club, Long Beach Citizens Advocating Responsible Development and numerous neighborhood and consumer advocates in Long Beach who wanted someone to be here in person to thank each and every one of you for your actions on this matter to date...

    ...Long Beach finds that we are apparently a test case for where the nation would like to set safety and siting standards on a site that will be 25% smaller than the nation's smallest and only urban liquefied gas facility, that will contain four times the traffic, that will contain two additional operations, that will be in the nation's busiest port complex surrounded by other hazardous materials, that will be on a site we believe is -- as a chokehold for the nation's cargo -- a terrorist target, and a site that is challenged by oil subsidence, liquefaction, floodplain manmade landfill and numerous earthquake faults.

    We are not comfortable being that test case.

    We are so grateful for your assistance, and in the most emphatic terms possible, we hope that the Governor, the California delegation and the California legislature will support your efforts. Thank you.

    SES proposes to build an 80 million gallon LNG receiving, storage and regassification facility and an associated propane/butane/ethane stripping plant (up to 4.5 million gallon capacity; through-put depends on type of LNG) in the Port of LB.

    As previously reported by, FERC declared in March that it has exclusive regulatory authority over siting and safety issues and rejected CPUC's position that the applicant qualifies as a public utility that must seek and obtain a CPUC certificate of public convenience and necessity to proceed.

    SES previously filed papers siding with FERC re federal vs. state jurisdiction, but has said it will seek and obtain other permits required from the Coastal Comm'n, Port of LB and SCAQMD. As reported on April 21 by, SES "reaffirmed [its] ongoing commitment" to "work with and obtain all required state and local permits" for the project. Tom Giles, Chief Operating Officer and Executive VP of South Energy Solutions, said in an April 21 written release:

    It is our standing that FERC jurisdiction over siting approval does not pre-empt the necessity of working with state and local authorities for a wide range of necessary permits. Whether it is an air permit from SCAQMD, an approval of a master plan amendment from the Coastal Commission, certification of an EIR and other requirements of the Port of Long Beach, or the many other government departments and agencies we have been working diligently with over the past year, SES has and will stay the course. Safety reviews conducted by the U.S. Coast Guard, the Port, the Coastal Commission, and other agencies will continue.

    Apart from whether FERC authorizes the facility, LB's Mayor-nominated, City Council-approved Board of Harbor Commissioners would also have to approve it...and Harbor Commission certification of the project's Environmental Impact Report could be appealed to the elected City Council.

    As previously reported by, two other CA LNG proposals (by other firms) have been dropped by their proponents amid public opposition in northern CA (Vallejo and Eureka). Two offshore proposals off Ventura County are currently pending, as is an offshore proposal near Tijuana, Mexico. LB is apparently the only area in which a CA onshore proposal is presently pending. also posts the verbatim text of the CPUC Order Instituting Investigation (as posted in draft form on the CPUC web site). To view it, click here

    [April 26 update] The CPUC has posted the result of the item on its web site as follows:

    Order Instituting Investigation into the proposal of Sound Energy Solutions, Inc. to construct and operate a liquefied natural gas terminal at the Port of Long Beach.

    The Commission opens this investigation to promote public safety and California’s environmental welfare, consistent with state and federal law. The Commission orders Sound Energy Solutions, Inc. to file an application for a certificate of public convenience and necessity if it intends to pursue construction of the project.

    Agenda 3131, Item 34 4/1/2004 (Staff)
    Outcome Signed
    Yes: (Brown, Kennedy, Lynch, Peevey, Wood)
    No: (none)
    Abstain: (none)
    Absent: (none)


    Related coverage:

  • For a compendium of coverage of the LNG issue, see Coverage of LNG Terminal Proposed in Port of LB

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