Air board sues over PUC ‘hot gas’ ruling

The state Public Utilities Commission illegally sidestepped California law when it set rules allowing dirtier grades of natural gas into the state without reviewing evidence that the change would worsen air pollution, air quality officials said in a pair of lawsuits filed Tuesday.

The utilities commission “acted arbitrarily and capriciously and abused its discretion” in setting new guidelines for natural gas quality, bypassing the California Environmental Quality Act, the South Coast Air Quality Management District said in regulatory filings.

“At a time when we are searching for every possible means to further reduce air pollution, we cannot afford a setback that will significantly increase emissions and subject residents to worsened air quality,” Barry Wallerstein, executive officer of the air board, said after the suits were filed with the California appeals court and the state Supreme Court.

A similar court challenge was filed days after the commission’s ruling by Ratepayers for Affordable Clean Energy, a coalition of environmental groups. In addition, the coalition, the air board and the city of San Diego have asked the commission to reconsider the action, a request that is set for review in March.

Commission spokeswoman Terrie Prosper said regulators could not comment on the suits because the issue was still pending at the agency. She said the commission would seek an abeyance at the courts until after the March review.

The dispute concerns so-called hot gas, a type of natural gas that is chemically different and burns at higher temperatures than the gas that commonly flows through California pipelines, fueling power plants and millions of gas stoves, water heaters and other appliances.

Relatively small amounts of hot gas are produced and used in California, but those flows are either treated or blended with other grades to bring the characteristics in line with traditional supplies. The September ruling, the commission has said, was aimed at easing the way for a stream of foreign natural gas that would be imported through liquefied natural gas plants under construction or proposed to serve California.

The commission’s ruling on gas quality is of particular benefit to San Diego-based Sempra Energy Co., the leading partner in a liquefied natural gas plant under construction in Baja California and parent of Southern California Gas Co. and San Diego Gas & Electric Co. Under the new rules, that plant could send hotter imported natural gas into the U.S. without taking steps to make the inflow mimic California’s traditional supplies.

In urging passage of his proposal, commission President Michael R. Peevey noted that the environmental review was “vigorously debated,” but, he said, “our legal division has concluded that narrowing natural gas quality specifications is not a ‘project’ ... therefore, detailed environmental review is not required.”

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elizabeth.douglass@latimes.com