SoCalGas could end up paying the state $9.8 million after an agency that oversees the utility said the company used ratepayer money to advocate against the adoption of energy efficiency measures.
The California Public Utilities Commission issued a decision last week to penalize Southern California Gas Co. after it banned the company in 2018 from using customer money on fighting to weaken building and appliance efficiency measures that would wean customers off gas, decreasing planet-warming emissions.
The utility, which provides gas to about 22 million customers across Central and Southern California, said it has been working on enhancing the company’s accounting and oversight practices.
“Under new leadership, SoCalGas is focused on a business strategy that is sustainable and aligned with California reaching its climate and clean air goals more quickly and more equitably,” SoCalGas spokesperson Christine Detz wrote in an email.
The utility will have 30 days to appeal the decision.
From 2018 to 2021, SoCalGas sent its employees to workshops, meetings and discussions about the new state and federal building codes, according to the decision. Many of the costs associated with the events were charged to ratepayers, the ruling said.
The gas company demonstrated, “profound, brazen disrespect for the commission’s authority,” according to the ruling.
In 2018, commissioners banned the utility from engaging in any discussions to shape energy efficiency regulations after it became known that SoCal Gas advocated against the adoption of stringent building and efficiency codes.
The Sierra Club, represented by Earthjustice and later joined by the commission’s internal watchdog group, sought penalties saying SoCal Gas worked to weaken the state’s 2022 building code that moved the state toward the construction of new all-electric new homes.
Sara Gersen, a senior attorney at the nonprofit law firm Earthjustice that represents the Sierra Club, said although the $9.8-million penalty is short of the $124 million fine the group sought, she hoped it would draw the attention of shareholders and force the company “to mend its ways.”
It’s still unclear what amount SoCal Gas would need to return to customers if the commission moves forward with the penalty.
Last week’s decision, Gersen added, would result in very small refunds to customers from the utility and hardly be noticed on their bills.
But the decision, she said, would save customers money in the long term.
“Hopefully without SoCalGas using customer money to fight strong standards, we’ll be able to ramp those up aggressively, save our money and also have a better chance of meeting our climate goals,” Gersen said.
The CPUC voted unanimously last year to ramp up the capacity of the Aliso Canyon natural gas storage facility after SoCalGas said it needed the expansion to keep energy prices stable ahead of the winter months.
The decision to expand the facility came despite the calls to shut down the site following the 2015 massive gas leak.
Following the blowout, former Gov. Jerry Brown directed the CPUC to draft a plan to phase out the facility by 2027. Gov. Gavin Newsom endorsed the decision in 2019.
Since then, the utility and its parent company, Sempra Energy, settled several lawsuits, including a $1.8-billion settlement with 36,000 victims of the gas leak it agreed to in September.
Last week, the company settled another lawsuit, agreeing to monitor benzene levels around the facility and notify nearby residents in case of another gas leak, as part of a settlement with an environmental watchdog group.
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