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November 5, 2020

Environmental and Consumer Advocates Ask California Agency to Fine SoCalGas $255 Million for Abusing Funds to Subvert Climate Action

Brief filed before the California Public Utilities Commission details six years of SoCalGas efforts to weaken federal, state, and city climate regulations

Contacts

Zoe Woodcraft, Earthjustice, (818) 606-7509

San Francisco, CA

The Sierra Club, represented by Earthjustice, filed a brief asking the California Public Utilities Commission (CPUC) to hold Southern California Gas Company accountable for the utility’s long campaign to sabotage clean energy progress in California. They are joined by the consumer watchdog within the Commission, the Public Advocates Office, which also filed a brief calling for $255 million in fines for SoCalGas. The Sierra Club brief details SoCalGas’ efforts over six years to fight energy efficiency rules, many of which particularly benefit low-income Californians and families who rent.

“While California has taken momentous steps to protect our way of life and our very future from runaway climate change, SoCalGas has been sabotaging those efforts from the shadows in a bid to keep its gas business rolling along,” said Sara Gersen, clean energy attorney on Earthjustice’s Right to Zero campaign. “It’s time for the Public Utilities Commission to hold SoCalGas accountable.”

SoCalGas’s reckless campaign has undermined and sabotaged clean energy progress and energy efficiency measures at the city, state, and even federal level, including:

  • Fighting the movement led by California’s cities for all-electric homes and buildings. SoCalGas campaigned against local requirements in California known as “reach codes” that require or incentivize all-electric new construction. The fossil gas burned to heat buildings and water is responsible for 10% of California’s greenhouse gas emissions.
  • Delaying the adoption of strong California standards for energy efficiency, notably in the California Energy Commission’s 2016 update to efficiency standards for water heating in the state’s building code.
  • Hamstringing energy efficiency at the federal level. SoCalGas questioned the entire premise of federal efficiency standards, urging the Trump administration to block Obama-era regulations from taking effect and deprioritize energy efficiency. During the Obama administration, SoCalGas was a key participant in the gas industry’s campaign against stronger federal energy efficiency rules for furnaces, even though the California Energy Commission warned that “delay in adopting stringent federal furnace standards threatens to set California back in its efforts” to reach its energy efficiency goals. 

“Over and over again, SoCalGas misused customer money to upend laws that protect Californians from overpaying on their household energy bills,” said Evan Gillespie, the Western Region Director for the Sierra Club’s Beyond Coal Campaign. “Now, the Public Utilities Commission faces a choice: continue to let a bad actor misuse customer money and make climate change worse, or hold SoCalGas accountable. We’re counting on the Public Utilities Commission to ensure that no one gets away with wasting our money and sabotaging California's clean energy future.”

In a troubling and ironic development, SoCalGas used customers’ funds intended to support advocacy by utilities in California for stronger energy codes and standards to instead campaign against energy efficiency measures. It’s a startling abuse of the funds the Public Utilities Commission allows SoCalGas to charge its customers for company expenses intended to benefit customers. 

“SoCalGas has actively worked against the state’s climate change goals by advocating for weaker energy efficiency codes and standards — and has used ratepayer money to do it,” said Mike Campbell, program manager in The Public Advocates Office, an independent organization at the CPUC. “Not only is this illegal and unethical, but it also undermines California’s climate goal of decreasing reliance on polluting fossil fuels such as natural gas. The CPUC has an unprecedented opportunity to take action to deter SoCalGas gas from future misconduct. The Public Advocates Office will not stop until the wellbeing of customers are put first; we will continue to fight to hold SoCalGas accountable.”

In a particularly damning email exchange about strategy on energy efficiency brought to light in the brief, a SoCalGas employee lamented to the director of public affairs at the American Public Gas Association that “Unfortunately, we do not oppose the concept of climate change. We used to but somehow that changed over the past few years and now we are proponents of acting as a response to climate change [sad face emoji].” 

Sierra Club recommends fines of $255.3 million against SoCalGas, with those funds to be invested in California’s building electrification programs to remedy the harms caused by SoCalGas’ conduct. It seeks the refund of all costs SoCalGas collected from its customers for conducting its codes and standards program in the years 2014–2017, and the repayment of all shareholder incentives SoCalGas collected for that work. The Sierra Club also seeks the permanent removal of SoCalGas from an active role in California’s statewide codes and standards advocacy program.

These briefs come one week after Senator Diane Feinstein and Representative Nanette Barragán sent a letter to SoCalGas demanding answers about reports that the utility has engaged in a lobbying campaign to undermine California’s clean energy goals.

About Earthjustice

Earthjustice is the premier nonprofit environmental law organization. We wield the power of law and the strength of partnership to protect people’s health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change. We are here because the earth needs a good lawyer.