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    FERC Grants Rehearing Re Its March Order That Asserted Exclusive Fed'l J'diction Over LB LNG Proposal Siting & Safety Issues

    (May 12, 2004) -- The Federal Energy Regulatory Commission (FERC) has granted a rehearing of its controversial March 24 order asserting exclusive federal jurisdiction over siting and safety issues related to an application by a Mitsubishi subsidiary ("Sound Energy Solutions" or "SES") to build and operate an 80+ million gallon Liquefied Natural Gas (LNG) facility in the Port of Long Beach.

    FERC's March 24 position -- in which it effectively granted itself exclusive jurisdiction on siting and safety -- is strongly disputed by the CA Public Utilities Commission (CPUC) which says SES is required under CA law to seek and obtain CPUC permission (a certificate of public convenience and necessity)...which would require CPUC to determine -- independently -- that the facility is safe and address other regulatory protections for the public.

    As previously reported by, the CPUC last month launched its own state proceeding on the matter, notwithstanding FERC's claim of exclusive federal jurisdiction.

    Meanwhile, in papers filed by LB Citizens for Utility Reform (LBCUR) through LB activist Bry Myown, the LB activist group separately requested a rehearing on FERC's March 24 order, citing numerous grounds for its request.

    In a terse May 12 order, which did not refer specifically to CPUC, LBCUR or any other challenging parties, FERC stated in pertinent part:

    In order to afford additional time for consideration of the matters raised or to be raised, rehearing of the Commission's order is hereby granted for the limited purpose of further consideration...Rehearing requests of the above-cited order filed in this proceeding will be addressed in a future order...The Commission anticipates issuing an order on the merits of the rehearing requests in this proceeding by June 21, 2004.

    In previously filed legal papers, SES supported the position taken on March 24 by FERC...and to date, SES has declined to seek CPUC's regulatory permission. As previously reported by, SES has said it intends to comply with permitting requirements by other state and local agencies on issues within their established authority.

    Despite CPUC's position that SES is not presently complying with CA law by refusing to seek CPUC regulatory permission, the Port of LB has continued working with SES in pursuit of its FERC application.

    As previously reported by, Assemblyman Alan Lowenthal (D., LB-SP-PV) has said that he supports CPUC's position in the jurisdictional dispute. State Senator Betty Karnette (D., LB) has declined to say publicly what her position is on the jurisdictional issue.

    The Port of LB's actions -- as a City of LB public entity -- drew pointed public criticism at the May 11, 2004 City Council meeting.

    LBCUR's Myown and other speakers charged that FERC's assertion of exclusive federal jurisdiction -- and the Port of LB's role in entertaining SES' application despite CPUC's asserted regulatory authority -- amounts to a test case that could erase state regulatory authority over LNG plants throughout CA and nationwide.

    The public testimony prompted a colloquy involving Councilmembers and the LB City Attorney's office on the issue, as well as the broader issue of Council authority in the matter. has posted a separate report on this significant aspect of the story. To view it, click here.

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