U.S. Gas Utility Ordered to Return Cash Used in Climate Lobbying


California regulators ruled that Sempra Energy’s Southern California Gas misused customer money to lobby against energy-efficiency standards, and ordered the utility to refund those amounts to ratepayers.

SoCalGas, the largest natural gas distributor in the U.S., used customer funds for several years to advocate against stricter state energy codes that would have curbed natural gas use, according to a preliminary decision filed Wednesday by an administrative law judge at the California Public Utilities Commission. The judge also found that SoCalGas used ratepayer money to fight against proposals by cities to limit gas use in buildings.

The judge stopped short of ordering a financial penalty sought by the state’s consumer advocate and environmental groups, which had called for a $255 million fine against the utility. Parties can appeal the decision and the five-member commission can review it before it’s finalized.

“By failing to impose penalties the commission encourages the very bad acts for which it finds SoCalGas guilty,” said Maya Chupkov, a spokeswoman for the Public Advocate’s Office of the commission.

The decision comes as California seeks a pathway to become carbon-neutral by 2045 in its effort to combat the worst impacts of climate change. To reach such a goal, the state will need to sharply reduce its use of fossil fuels including natural gas.

Southern California Gas has said it supports the state’s climate goals and has pledged to become carbon-neutral by the state’s target date by replacing its fossil gas with hydrogen and gas from renewable sources such as diary farms and landfills.

“We welcome the clarification provided and we appreciate the finding that no violations, fines or penalties are warranted,” SoCalGas spokesman Chris Gilbride said regarding the commission’s proposed decision.

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