CPUC Orders SoCal Gas to Pay $10 Million Over Improperly Spent Ratepayer Funds

The Southern California Gas Company (SoCal Gas) was penalized for $9.8 million and to reimburse customers for improperly spending funds that violated California Public Utilities Commission (CPUC) policy on building codes during the weekend.

Since the mid 2010’s, CPUC and other Californian agencies have focused on replacing gas heating and appliances with electric due to growing environmental concerns of natural gas, as well as worries over safety. With concerns over the new policies on their future, SoCal Gas and other companies fought back against the phase-out of gas and stricter building codes, which eliminated gas lines from new and existing properties. In 2017, the CPUC Public Advocates Office found out that SoCal Gas had been using ratepayer money to work against the state.

Consequentially, CPUC issued a new rule in 2018 that utility companies could not use ratepayer money on any work that undermined the new energy efficient, more electric standards, while also okaying ratepayer funds spent on efforts for the newer stricter standards. Despite the new rule, CPUC found that SoCal Gas had continued to pay for employees and consultants to go to workshops and other meetings that favored gas and were violating the new building standards. This continued from 2018 to 2021.

“The utility showed profound, brazen disrespect for the commission’s authority,” said CPUC last week.

CPUC Public Advocates Office and the environmental group Earthjustice called for a major $124 million penalty, as well as reimbursing the millions of SoCal Gas customers in LA County. However, during the weekend, the amount was lowered to only $9.8 million.

Reaction to the fine, reimbursement

Environmental groups praised CPUC’s ruling despite the lowered fine amount on Monday, noting that there is finally some accountability for companies trying to go against California’s emission goals.

“The fine sent a strong message,” said Earthjustice Senior Attorney Sara Gersen in a statement. “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.”

Meanwhile, SoCal Gas had little to say on the matter, only noting in a statement that “we are reviewing the decision and looked forward to further engagement on this issue.”

While the Public Advocates Office is continuing to press on similar issues, such as using ratepayer money to promote natural gas powered buses and trying to get cities to not use electric appliances during new construction, experts said on Monday that utilities were now being put in the cross hairs more and more for moving against state policy.

“SoCal Gas won’t be the last utility to meet CPUC’s wrath,” explained Rhonda Warren, a Southern Californian utility consultant, to the Globe on Monday. “Utility companies fight for their livelihoods. In California they have been pushing to keep existing power plants to not have to pay for expensive new plants. They fight back against policies that cut into their profits, like the whole solar panel Net Energy Metering 3.0 battle that ended just last week. This is another.  The state is looking to block off a lot of future revenue, so they’re trying to find a way to get past it.

“With the environment, energy concerns, and company wished all coming to a head, and the average Californian kind of stuck in the middle, we’ll see more of this for sure. In this case, ratepayers get a little money back for their trouble. It often doesn’t pan out that way.”

As of Monday it is unknown how much individual ratepayers will receive as a result of the CPUC ruling.