Southern California Gas Co. v. South Coast Air Quality Management District

200 Cal. App. 4th 251, 133 Cal. Rptr. 3d 7, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20329, 2011 Cal. App. LEXIS 1343
CourtCalifornia Court of Appeal
DecidedOctober 27, 2011
DocketNo. B226105
StatusPublished
Cited by7 cases

This text of 200 Cal. App. 4th 251 (Southern California Gas Co. v. South Coast Air Quality Management District) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern California Gas Co. v. South Coast Air Quality Management District, 200 Cal. App. 4th 251, 133 Cal. Rptr. 3d 7, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20329, 2011 Cal. App. LEXIS 1343 (Cal. Ct. App. 2011).

Opinions

[258]*258Opinion

TURNER, P. J.

I. INTRODUCTION

Plaintiff, Southern California Gas Company, appeals from the denial of its mandate and prohibition petition and declaratory relief complaint. Plaintiff filed suit against defendants, South Coast Air Quality Management District (the district) and the Governing Board of the South Coast Air Quality Management District (the board). Plaintiff unsuccessfully challenged the district’s rule No. 433 (Rule 433) which imposes monitoring, recordkeeping and reporting requirements on it. We conclude the trial court correctly denied plaintiff’s petition and complaint.

II. MANDATE AND PROHIBITION PETITION AND DECLARATORY RELIEF COMPLAINT

Before proceeding to a discussion of the petition and complaint, we note many of the theories therein are not raised on appeal. For completeness purposes, though, we set forth the plaintiff’s allegations in their entirety. Filed August 4, 2009, the petition and complaint alleges plaintiff operates the nation’s largest natural gas distribution facility; distributes gas and provides service to over 20 million customers; and is a network that encompasses over 20,000 square miles across 12 counties and nine local air pollution and quality management districts. Emissions of nitrogen oxides from “stationary sources’ combustion of natural gas in Southern California” account for only 5 percent of all such discharges in the South Coast Air Basin (the basin). Fourteen percent of the natural gas in plaintiff’s system comes from wells in California and offshore. Eighty-six percent of the gas comes from producers in Canada, the southwestern United States and the Rocky Mountains. Plaintiffs commercial customers directly purchase natural gas from these out-of-state producers. Plaintiff’s pipelines are used to convey the gas to local commercial customers who have purchased it directly from out-of-state producers. Approximately 60 percent of the gas flowing through plaintiff’s pipelines is owned by its customers. Different natural gas supplies have varying chemical compositions and performance characteristics. It is essential that different supplies be interchangeable without adversely affecting operational safety and efficiency or materially increasing air pollution.

[259]*259Public Utilities Code section 451 requires plaintiff to provide gas services at just and reasonable prices. California’s Public Utilities Commission comprehensively regulates plaintiff’s operations. This regulatory regime requires plaintiff to charge just and reasonable prices and maintain facilities within its geographical service area. The Public Utilities Commission also requires uniform pricing throughout its service area for the same units of energy. This comprehensive regulation includes tariff rule No. 30, which governs the chemical composition and performance characteristics of natural gas in plaintiff’s gas lines.

Further, the Public Utilities Commission’s tariff specifications require the natural gas in plaintiff’s system be interchangeable. One interchangeability measure is the Wobbe Index or Wobbe Number reading which is based on the heating value and specific gravity of the gas. Stated more basically, the Wobbe Index is the measure of the density of the heating volume- for a given natural gas amount. In September 2006, the Public Utilities Commission revised plaintiff’s tariff rule No. 30. The 2006 revision required that non-California supplies of natural gas have a maximum Wobbe Index reading of 1385. The Public Utilities Commission considered the necessity of diversifying gas sources; the need to set a relatively high Wobbe Index standard; and the fact that increased gas supplies will result in lower costs to natural gas and electricity consumers. During the lengthy two-year proceedings leading up to the September 2006 Public Utilities Commission decision, the district had advocated the adoption of a maximum Wobbe Index reading of 1360 and that additional testing be conducted. The Public Utilities Commission rejected the district’s proposed Wobbe Index figure and the need for future testing. The Public Utilities Commission found that imposing a different Wobbe Index figure in the district’s jurisdiction was infeasible. The district filed a mandate petition in the Court of Appeal seeking to set aside tariff rule No. 30, which was denied. The district’s review petition filed in the Supreme Court was denied on July 16, 2008.

In 2007, while the Public Utilities Commission proceedings were pending, the district unilaterally proposed setting a Wobbe Index reading of 1360. The district proposed a control measure, designated as CMB-04, which consisted of two components. According to the petition: “ ‘The first component will include monitoring and testing of natural gas supplies to enhance quantification of emission changes attributable to gas quality higher than a Wobbe Index of 1360.’ The second component, which is to follow the first, will impose a [Wobbe Index] of 1360 ‘or equivalent mechanism/parameter. ’ It will also include unspecified ‘mitigation measures.’ ” The document describing CMB-04 admitted that it may be necessary to seek additional legislation in order to implement the proposed control measure. The district adopted its 2007 Air Quality Management Program, which included CMB-04.

[260]*260After CMB-04 was adopted, the district staff recommended adoption of Rule 433. Rule 433 was designed to monitor changes in the quality of natural gas and air pollutant levels. Rule 433 was to apply to all operators that convey natural gas to end users in the district. Plaintiff is the only entity in the district subject to the requirements of Rule 433. Only one other entity in the district is subject to any of Rule 433’s requirements. Pursuant to Rule 433, plaintiff is required to monitor and report to the district the Wobbe Index readings in numerous locations; educate end users concerning gas quality changes; recommend revisions to end user equipment maintenance programs; determine if there are quality changes in gas derived from liquefied natural gas in selected end user equipment; and prepare an annual estimate of emissions due to liquefied natural gas or other new supplies of natural gas. Plaintiffs’ initial startup costs of complying with Rule 433 will be between $1.4 and $3.2 million. There will be additional ongoing costs of $250,000 per year. Further, imposition of the Wobbe Index reading of 1360 and restraints by the district’s current out-of-state and new natural gas supplies would increase plaintiff’s customers’ costs. On April 10 and June 4, 2009, plaintiff submitted written objections to the adoption of Rule 433. On June 5, 2009, the board, acting purportedly pursuant to Health and Safety Code section 41511, adopted Rule 433.

Based on these factual allegations, plaintiff alleges six causes of action. The first cause of action seeks a writ of mandate. The first cause of action alleges defendants exceeded their authority under the Health and Safety Code; by acting in excess of their jurisdiction, that they committed a prejudicial abuse of discretion; and plaintiff has no adequate remedy at law. The second cause of action alleges the Public Utilities Commission has authority over natural gas public utilities; the 2006 decision adopting a Wobbe Index reading of 1385 has the force of law; Rule 433 is intended to enforce a different Wobbe Index reading of 1360; and in setting a lower Wobbe Index reading than that established by the Public Utilities Commission, defendants acted in contravention of their authority under law.

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200 Cal. App. 4th 251, 133 Cal. Rptr. 3d 7, 42 Envtl. L. Rep. (Envtl. Law Inst.) 20329, 2011 Cal. App. LEXIS 1343, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-california-gas-co-v-south-coast-air-quality-management-district-calctapp-2011.