Cicchetti: Sempra LNG plan bad for California

USC Prof and former Wisconsin Public Utilities Commissioner Dr. Charles Cicchetti examines Sempra's LNG proposals in Baja California:

Government approval is required to build an LNG plant. We should not tolerate companies that seek to use government and regulatory policy to unfairly favor their project over others.

Sempra, the San Diego-based energy company, seems to be doing just that ---- attempting an end run on the competitive market in California, garnering favorable transportation prices for its affiliates and proposing to spread their LNG system infrastructure costs over their regulated retail customers. If approved by regulators, this would mean that ratepayers effectively guarantee Sempra's investment in an LNG facility in Mexico ---- protecting shareholders at the ratepayers' expense.

Favoring California's regulated utilities, such as Sempra, means that independent LNG projects would not compete on an even playing field.

Innovation will cease. Choices will wither. Worse, California's consumers will be forced to pay the bill and assume risks best left with private investors, with no guarantee that the bulk of the gas generated at the Sempra facility will even flow to California.

California should insist that Sempra and other state-regulated utilities build LNG facilities for California under the same terms and risks they face elsewhere in the world where they propose to build similar facilities.

Found via Energize California News and Views...