California League of Food Producers 33 SoCal Gas projects that the 24.6 Bcf inventory will be reached by June, removing injection capacity for the rest of the summer unless gas is withdrawn. CLFP has been involved in the settlement negotiations with SoCalGas for the past two years. The settlements were negotiated with SoCalGas customers and third-party users of the transportation system in an effort to mitigate the potential for curtailments of industrial supply in light of the Aliso Canyon injection/withdrawal restrictions. AIR Cap-and-Trade. Currently, the California Air Resources Board is expected to amend the Cap-and-Trade regulation by the end of the year. Assembly Bill 398 also introduced a number of new cost-containment tools, including a price ceiling and ‘speed bumps' on allowance prices, that will be amended into the regulation in anticipation of post-2020. Elements in AB 398 to be incorporated into the regulation include: ■ ■ Price Ceiling – CARB looking at $150 - $220. Industry working to keep below $70. ■ ■ Market Price Protection (Speed Bumps) – Will set two price levels between current market cost and ceiling price. If breached, CARB will add allowances to market. ■ ■ Offsets – Offset percentages reduced to 4% between 2021 and 2025. Will increase to 6% between 2026 and 2030. ■ ■ Allowance Banking – A number of new banking rules are expected to be amended into regulation, which are designed to limit alleged speculation and prevent windfalls. ■ ■ Allowance Oversupply – CARB is directed to evaluate and address the issue of an alleged oversupply of allow- ances in the market via a regulatory fix. The “oversupply” , if any, is being characterized by anti-market parties as an overallocation, which it is not. CLFP will continue to engage at all levels in the development of the amendments and the finalization of the regulation for post-2020. Community Monitoring (AB 617). In conjunction with the passage of the extension of the Cap-and-Trade the Legisla- ture and Governor Jerry Brown forced the passage of AB 617, a bill requiring CARB to work with local Air Districts to develop a community monitoring plan aimed at reducing /eliminating toxic air contaminants. and criteria pollutants at the local level. CLFP is actively involved in the implemen- tation of this regulation in the local air districts. two primary drivers for its proposed change. First, an increased regulatory burden and second the declining value of storage for inter-seasonal price arbitrage. Entitled the Natural Gas Storage Strategy (NGSS), PG&E is propos- ing to limit the amount of its storage to the amount needed to provide “reliability.” PG&E is also proposing that indepen- dent storage providers should be allowed to provide storage services for PG&E customers (core as well as noncore) and shippers. If approved by the CPUC, the NGSS will close the Los Medanos and Pleasant Creek natural gas underground storage operations. CLFP is a party to these and other CPUC proceedings. CPUC Opens Sweeping Climate Change OIR. The California Public Utilities Commission (CPUC) recently approved a new order instituting a rulemaking to incorporate climate- change adaptation strategies into its proceedings as a way to ensure utility safety and reliability. CPUC indicated that the first phase of the rulemaking will focus on electric and gas utilities. However, the commission said it intends to extend it to deal with the water and telecommunications sectors in the future. CPUC to Create Affordability Rulemaking. CPUC will also be launching an order instituting rulemaking to consider the affordability of state energy investments. The rulemak- ing will look into potential metrics to assess affordability and ways to institutionalize those into rate cases. CPUC Proposal Denies SoCal Gas Request to Increase Inventory at Aliso. A CPUC proposed decision rejects key parts of a plan by Southern California Gas Co. (SoCalGas) to maintain system reliability this summer, given limitations at the Aliso Canyon natural gas storage facility coupled with several pipeline outages. The company’s injection enhancement plan contains a number of elements, includ- ing a request to increase the allowable inventory at Aliso Canyon in order to support more systemwide injections.