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SoCalGas Announces Framework to Safely Bring Aliso Canyon Storage Facility Back Online in Compliance with Newly Issued Regulations

SRE | April 7, 2016

LOS ANGELES, April 7, 2016 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) today announced a framework to safely bring the Aliso Canyon storage facility back online, in compliance with newly issued regulations. The Division of Oil, Gas, and Geothermal Resources' (DOGGR) comprehensive Safety Review Testing Regime for the Aliso Canyon Natural Gas Facility requires "that each of the active injection wells in the Aliso Canyon Storage facility either pass a thorough battery of tests in order to resume gas injection or be taken out of operation and isolated from the underground gas reservoir." DOGGR's testing regime was developed in coordination with the U.S. Department of Energy's National Labs. In compliance with DOGGR's testing regime, work is already underway to test wells at the field and SoCalGas is working toward being able to operate the Aliso Canyon storage facility by late summer.

"We have said all along that we will not re-open Aliso Canyon until we are confident it is safe to operate," said SoCalGas Chief Operating Officer, Bret Lane. "Following both the spirit and letter of new guidelines established by the state, we have started work that should allow us to partially restore operations at the field by the end of the summer. We look forward to working with regulators, elected officials, and our customers to address concerns about reliability this summer and during next winter's heating season."

"We encourage the state regulatory agencies, legislators, and SoCalGas to work with impacted stakeholders to urgently evaluate the possibility of phasing-in the safe operation of those wells that are deemed safe by the Division of Oil, Gas, and Geothermal Resources and independent experts," said the Southern California Public Power Authority. "Further evaluation may determine that this approach supports the highest priority of ensuring public safety – both safety for local residents near the facility and safety concerns associated with impacting power supply reliability for the broader region this summer and beyond."

SoCalGas' framework to safely bring the Aliso Canyon storage facility back-online with the goal that the field can continue to support gas and electric reliability in the region during the fall and winter months will be executed in three phases.

Phase One:

Every active well at the Aliso Canyon storage facility will undergo diagnostic noise and temperature testing.
The data from each of these tests will be reviewed and confirmed by DOGGR.

Phase Two:

Based on the outcome of diagnostic testing in Phase One, wells will either be temporarily taken off-line and isolated from the underground reservoir or undergo a battery of four additional diagnostic tests to determine if they are safe to operate.

Phase Three:

After every well has successfully completed these two phases, DOGGR will confirm the field can be safely put back into operation. In concert with DOGGR, the Executive Director of the California Public Utilities Commission must also make a determination about whether the field is safe to operate.

The natural gas and electricity grids are complicated and interdependent. During periods of peak gas and electricity demand or when weather conditions diminish the reliability of renewable power sources, natural gas powered electric generation facilities fill the gap to meet consumers' energy demands. Because natural gas travels relatively slowly in pipelines, local storage facilities like Aliso Canyon are critical to maintaining reliable gas and electricity services.

Since October 25, no natural gas has been injected into the Aliso Canyon storage facility and all injection activity into the facility remains suspended until SoCalGas complies with DOGGR's Safety Review Testing Regime. Withdrawals from the facility were also stopped at the direction of the California Public Utilities Commission unless needed to meet energy reliability requirements.

SoCalGas continues to support the efforts of the California Public Utilities Commission Safety Enforcement Division and DOGGR onsite at the Aliso Canyon storage facility in their investigation of the incident. SoCalGas is also continuing to working closely with other agencies on the issues related to the incident.

The Aliso Canyon storage facility is an important part of interdependent natural gas and electricity systems in Southern California. SoCalGas is committed to working with regulators, lawmakers, customers, and other service providers to bring the facility back online safely, expeditiously, and in compliance with all new regulations.

About Southern California Gas Co: Southern California Gas Co. (SoCalGas) has been delivering clean, safe and reliable natural gas to its customers for more than 145 years. It is the nation's largest natural gas distribution utility, providing service to 21.6 million consumers connected through 5.9 million meters in more than 500 communities. The company's service territory encompasses approximately 20,000 square miles throughout central and Southern California, from Visalia to the Mexican border. SoCalGas is a regulated subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego.

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