Aliso Canyon's Impact on Electric Reliability: Technical Analysis and Action Plan

1. California Energy Commission California Public Utilities Commission Los Angeles Department of Water and Power Aliso Canyon’s Impact on Electric ReliabilityTechnical Analysis and Action PlanLegislative HearingMay 10, 2016

2. DOGGR is overseeing comprehensive safety review • Goal: Ensure no other leaks at Aliso Canyon • Safety program developed in cooperation with independent technical experts from national labs • Gas may be injected into Aliso Canyon only after all 114 wells have passed comprehensive tests or have been isolated. • New injections could increase gas pressure, so all wells must be fully safe and operational or be separated from the reservoir • Unknowns: when safety review will be completed; if or how many wells will be cleared to operate; the ultimate production capability of the wells • DOGGR has issued emergency regulations for all gas storage facilities & is developing new permanent regulations • Includes limits on maximum pressure for all facilities, including Aliso

3. Working since December to understand reliability impacts and to develop action plan • In compliance with Governor’s Proclamation, reliability studies performed by CPUC, CEC, CAISO and LADWP • Relied on support from SoCalGas to analyze operations impacts and curtailment scenarios • Technical Assessment Report and Draft Mitigation Action Plan Released on April 5th and workshop on April 8 • Analysis focused on summer 2016 • Separate issues for next winter, yet to be fully assessed • Winter workshop planned for July or August • Report assessing long-term viability of natural gas storage; due in 2017  

4. Aliso Canyon has been drawn down to 15 Bcf • Agencies directed SoCalGas to extract gas as quickly as possible to assist in reducing/stopping leak • Reliability analysis showed some Aliso gas is needed • Discontinued withdrawals per CPUC Order of 1/21/16 • Remaining 15 Bcf intended to: • help meet peak demand in recent winter • provide withdrawals for upcoming summer • support gas operations for winter 2016 • Uncertainty of remaining gas: Withdrawal capability shrinks as diminished inventory reduces field pressure

5. Aliso supports ~9,800 MW: 40% LADWP/ 60% in CAISO; Critical for Peak Day and Contingency Reserve situations Page 5

6. Capacity of pipe and other storage indicates general risk • Typical outages can reduce capacity 0.5-1.0 Bcf/day • Electric generation typically requires 1.0-2.0 Bcf/day

7. Aliso Canyon used most days of year • Aliso is the largest gas storage facility inside LA Basin; helps serve 11 million citizens • Working capacity is 86 Bcf; daily withdrawal ~1.8 Bcf; inject ~0.4 Bcf • Gas delivered into LA Basin is limited by pipeline capacity and velocity • Gas from Aliso Canyon: • Helps to manage fast changes in pipe system flows • Helps balance difference between scheduled gas and actual gas flows • Aliso Canyon withdrawals occurred 134 of 151 “winter” days and 70 of 214 “summer” days: Average Days per Year Gas Withdrawn from Aliso (2012 - 2015)

8. Technical Assessment Group consisted of CAISO, CPUC, CEC, LADWP with input from SoCalGas • Applied industry standard hydraulic model • Inputs include minimum and maximum acceptable operating pressures • Simulates gas flows and operating pressures during gas day • Used to determine when to add capacity or if new load can be served • Frequently tested against actual operations • SoCalGas frequently performs modeling for third-parties consistent with PU Code on proprietary models

9. Simulated four actual operations days • Assumptions: • Aliso Canyon considered unavailable • No planned or unplanned gas system outages • Honor Rancho, La Goleta fully used; Playa Del Rey used for reserve • Must restore system to neutral balance overnight to prevent cascading problems on subsequent days

10. Analysis indicated risks to reliability • Scheduled flowing gas can fail to meet actual demand • Planned and unplanned gas system outages can limit pipeline and other storage availability • Rapid ramping of electric generation can exceed dynamic capability of gas system • Recovering from contingencies • Following changes in renewable generation • Important: gas moves ~30 mph or less

11. Confirmed: Serious risk to gas/electric reliability this summer • If Aliso is not used, the LA area can expect 16 summer days of gas curtailment in 2016 • Electric generators are first to be curtailed • Up to 14 summer days may require electric service interruption, potentially to millions of customers

12. Mitigation measures help, but do not eliminate risks

13. Mitigation measures help, but do not eliminate risks

14. Response to comments raised • April 8th public workshop in Porter Ranch garnered stakeholder participation • Some statements require clarification

15. A situation requiring unprecedented coordination • Based on the current design, Aliso is critical for integrated gas and electric service this summer • A distinct risk to reliability exists when mismatch of scheduled flow gas and actual gas demand exist while other planned outages to gas infrastructure occur • Mitigation measures will help, but do not eliminate risk • Next up: Analyze next winter • Consumer support is critical • Need all consumers to help when called upon during Flex Alerts by conserving • Rest of state can also help by conserving energy