• Sat. May 21st, 2022

California Gas Utility fined $10 million for misuse of taxpayers’ money | Economic news

By KATHLEEN RONAYNE, Associated Press

SACRAMENTO, Calif. (AP) — A major California gas utility is to pay the state nearly $10 million and reimburse customers for money it wrongfully spent on code development work energy-efficient construction.

The penalties facing the Southern California Gas Co. were handed down by the California Public Utilities Commission on Thursday.

The commission, which regulates California’s major utilities, in 2018 banned the utility from spending taxpayer dollars on advocacy work related to building codes after its internal watchdog found the utility was fighting 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 on the development of new state and federal building standards and also withheld key information from the commission, according to the decision.

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The public service showed “a profound and shameless disrespect for the authority of the commission,” the commission wrote in its decision.

Christine Detz, a spokeswoman for the utility, said in a statement that the utility is reviewing the decision and looks forward to “further engagement on this issue.” She declined to comment further on Friday.

The $9.8 million fine is well below the $124 million fine sought by the commission’s watchdog group and by Earthjustice, an environmental legal group involved in the proceedings.

But the fine sent a strong message, said Sara Gersen, senior counsel for Earthjustice.

“SoCalGas has gone rogue for far too long, trying to undermine California’s climate goals and keep Californians dependent on dirty 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.

This isn’t the first time the utility has been mired in controversy. A 2015 blowout at the utility’s Aliso Canyon storage facility took nearly 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 last year with 35,000 plaintiffs for $1.8 billion.

This week, the utility settled another lawsuit related to the leak alleging it violated a California law requiring businesses to warn people about possible exposure to toxic chemicals, the Los Angeles Times reported. The agreement requires the utility to pay $1.55 million to the Center for Environmental Health, which filed the lawsuit, the state and the attorney, Detz told The Times.

The California Public Utilities Commission’s Office of Public Defenders, the taxpayer watchdog group, also alleged that the company improperly used taxpayer dollars for activities to promote the continued use of natural gas in buses and to convince cities not to encourage electrical devices in new constructions. Detz, the utilities spokeswoman, did not immediately comment on the claims.

California has set some of the nation’s most ambitious clean energy goals, and meeting them will require phasing out the use of natural gas.

This is already happening in some cities, which have banned gas appliances in new construction.

The California Energy Commission refrained from requiring new construction to be all-electric in its latest update to state building codes. But the use of electric heat pumps is encouraged and new buildings must be “electric” even if they use natural gas.

Meanwhile, a recent study by California researchers found that gas stoves emit more methane than previously thought, even when turned off. Methane is a very potent greenhouse gas that contributes to climate change.

California utilities are allowed to spend taxpayer dollars to help state and federal efforts to update building standards, but only if they promote higher standards, not lower standards .

In 2017, the Office of Public Defenders found that SoCalGas was using taxpayer dollars to fight the passage of tougher building codes that would reduce the need for natural gas.

This prompted the Public Utilities Commission in 2018 to prohibit SoCalGas from using taxpayer funds for any activity related to the new building standards, regardless of the utility’s position. This allowed them to transfer taxpayers’ money to other public services working on these issues.

The $9.8 million fine is the result of the utility continuing to engage in this work by sending employees and consultants to participate in workshops, conference calls and meetings around the development of new state and federal building standards, the commission wrote in its decision Thursday.

The bulk of the fine is a charge of $10,000 per day for 960 days, from June 1, 2018 to January 15, 2021. The decision also limits incentive payments to shareholders related to energy efficiency programs.

The amount of money the utility must return to taxpayers has yet to be calculated.

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