(Reuters) – California’s utilities regulator on Thursday set a clear path toward potentially closing SoCalGas’s Aliso Canyon gas storage facility, prioritizing energy reliability and affordability as the state shifts to cleaner energy.

The California Public Utilities Commission (CPUC) has set a natural gas peak demand target of 4,121 million cubic feet per day, marking the threshold at which Southern California can meet demand without Aliso Canyon, it said in a statement.

Aliso Canyon, which serves more than 11 million customers and provides fuel to 17 natural gas-fired power plants, will be reviewed for permanent closure when the “forecasted peak day demand for two years out decreases to the target level,” the CPUC said.

Natural gas demand in Southern California is currently on a downward trajectory as a result of the state’s policies and climate goals, the regulator said.

The CPUC added that this includes the procurement of historic amounts of renewable electricity, which reduces dependency on natural gas-fired power plants.

“Aliso Canyon must be closed for good, but without harming working families with skyrocketing utility bills,” Governor Gavin Newsom said in a statement.

U.S. natural gas futures jumped about 6% to a 23-month high on Thursday due to lower output in recent days, an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants to an 11-month high, and early forecasts for colder weather in January. [NGA/]

(Reporting by Daksh Grover in Bengaluru; Editing by Abinaya Vijayaraghavan)