California gas utility fined $10M for ratepayer money misuse
A major California gas utility must pay a nearly $10 million fine and reimburse customers for money it improperly spent related to the development of more energy efficient building codes
February 4, 2022, 9:06 PM
4 min read
Share to FacebookShare to TwitterEmail this articleFILE - This Jan. 12, 2017 file photo, shows a gas gathering plant on a hilltop at the Southern California Gas Company's Aliso Canyon storage facility in Los Angeles. The California Public Utilities Commission fined SoCalGas $10 million on Thursday, Feb. 3, 2022, for improperly using ratepayer money on advocacy work around energy efficient building codes. The ruling also requested the utility to reimburse customers for misspent funds. (AP Photo/Jae C. Hong, File)
SACRAMENTO, Calif. -- A major California gas utility must pay the state nearly $10 million and reimburse customers money it improperly spent on work related to the development of energy efficient building codes.
The penalties that Southern California Gas Company faces were handed down Thursday by the California Public Utilities Commission.
The commission, which regulates California's major utilities, in 2018 prohibited the utility from spending any ratepayer money on advocacy work related to building codes after it's internal watchdog found the utility fought standards designed to make homes and businesses more energy efficient.
Between June 2018 and January 2021, SoCalGas continued to send employees and consultants to participate in workshops, conference calls and meetings about the development of new state and federal building standards and also withheld key information from the commission, the ruling said.
The utility showed “profound, brazen disrespect for the commission's authority," the commission wrote in its ruling.
Christine Detz, a spokeswoman for the utility, said in a statement that the utility was reviewing the decision and looked forward to “further engagement on this issue." She declined to comment further on Friday.
The $9.8 million fine falls fall short of the $124 million penalty that was sought by the commission's watchdog group and by Earthjustice, an environmental legal group that was involved in the proceedings.
But the fine sent a strong message, said Sara Gersen, a senior attorney for Earthjustice.
“SoCalGas has gone rogue for too long, trying to undermine California’s climate goals and keep Californians reliant on polluting gas appliances. It’s good to finally see some measure of accountability,” she said in a statement.
SoCalGas distributes natural gas to nearly 22 million consumers in central and Southern California, according to its website.
It's not the first time the utility has been mired in controversy. A 2015 blowout at the utility's Aliso Canyon storage facility took almost four months to control and became the largest known natural gas leak in the nation's history. The utility and its parent company, Sempra Energy, settled with 35,000 plaintiffs for $1.8 billion last year.
The California Public Utilities Commission's Public Advocates Office, the ratepayer watchdog group, has also alleged the company has improperly used ratepayer money on activities to promote the continued use of natural gas in buses and convincing cities not to encourage electric appliances in new construction. Detz, the utility spokeswoman, did not immediately comment on those claims.
California has set some of the nation's most ambitious clean energy goals, and reaching them will require phasing out the use of natural gas.
That's already underway in some cities, which have banned gas appliances in new construction.
The California Energy Commission stopped short of requiring new construction to be all-electric in its most recent update to state building codes. But the use of electric heat pumps is encouraged and new buildings must be “electric ready" even if they use natural gas.
Meanwhile, a recent study by California researchers found that gas-powered stoves are emitting more methane than previously thought, even when turned off. Methane is a highly potent greenhouse gas that contributes to climate change.
