Regional LNG: California regulators to meet on LNG terminal fight: Report

California energy regulators will meet with lawyers next week to consider their next moves in a fight with the Federal Energy Regulatory Commission (FERC) over a proposed liquefied natural gas terminal.

The California Public Utilities Commission (CPUC) has scheduled a closed-door conference with commission lawyers following a regular meeting July 8, said CPUC spokeswoman Terrie Prosper.

She declined to say what steps the CPUC may take.

The CPUC and FERC have been squabbling over jurisdiction for a $400 million LNG terminal planned for the Port of Long Beach near Los Angeles by a unit of Japan's Mitsubishi Corp., Sound Energy Solutions.

FERC has rejected a bid by the California commission to reconsider federal oversight of the terminal.

CPUC President Michael Peevey has said FERC has created a jurisdictional fight by trying to prevent the CPUC and other state agencies "from having any decision-making authority" in the project.

The CPUC has offered to hold joint hearings with FERC on LNG as the agencies did in the 1970s on another proposed LNG plan, Peevey said.

"FERC has no basis for preempting the state's environmental requirements" for the proposed terminal, the CPUC said.

But FERC commissioner Joseph Kelliher said in a letter to Peevey last week that "Congress and the courts have charged the Commission with certain legal duties. Among them is the licensing of facilities for the importation of LNG."

Kelliher said if the CPUC "were to prevail in its challenge, I believe LNG development would be severely retarded, not only in California but also in the rest of the nation." (*)