California Fines SoCalGas $10 Million for Efforts to Weaken Building and Appliance Efficiency Measures

A long saga before the California Public Utilities Commission about the Southern California Gas Company’s misuse of ratepayer funds came to a head late yesterday in a scathingly worded decision. The Public Utilities Commission fined SoCalGas close to $10 million for repeated violations of a Commission order prohibiting it from using customer money to engage in building and appliance efficiency standards and found that its “insolence must be accorded a high degree of severity.”

“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,” said Sara Gersen, attorney on Earthjustice’s Right to Zero campaign. “SoCalGas not only tried to drag California’s energy efficiency measures back, they abused customer funds to bankroll their efforts to do so. It was well past time for the California Public Utilities Commission to send a strong message.”

The Commission barred SoCalGas from engaging in any activity to shape energy efficiency regulations in California in 2018 after revelations that it actively worked to undermine adoption of strong building and efficiency codes. The Sierra Club, represented by Earthjustice and joined by Cal Advocates (the Commission’s internal watchdog) sought sanctions because SoCalGas continued to work to weaken efficiency standards after the Commission ordered it to stop.

SoCalGas’ efforts included attempts to weaken California’s landmark 2022 building code that moved the state towards all-electric new construction, and to dispute overwhelming evidence of the health harms of gas stoves. SoCalGas was unsuccessful, as the state moved forward with the nation’s first building code establishing electric heat pumps as baseline technology with additional ventilation requirements for homes that continued to use gas stoves.

This decision resolves one of a two-part inquiry into penalties for SoCalGas’ misuse of customer money to weaken building and appliance efficiency standards. A second Commission decision on whether SoCalGas should be fined for activities prior to the Commission’s express prohibition is pending.

“We hope this $10 million penalty sends a message to SoCalGas to end its illegal efforts to sabotage California’s transition off of polluting natural gas,” said Nihal Shrinath, associate attorney for Sierra Club. “The Commission did the right thing by holding SoCalGas accountable for its attempt to use customer money to undermine efficiency and electrification policies designed to remove polluting gas from buildings — policies that are imperative to mitigate the climate crisis and protect Californians, especially historically disadvantaged low-income communities, from toxic indoor air pollution.”