California’s big gas utility misspends millions in ratepayer funds. That must stop | Opinion
As the nation’s largest provider of natural gas, SoCalGas provides energy to 21 million customers in 500 communities, from Visalia and San Luis Obispo on the north to the California-Mexico border on the south.
The investor-owned utility says it follows three values: “Do the right thing, champion people and shape the future.”
But a recent investigation by The Sacramento Bee shows those to be mere words when it comes to using ratepayer funds for their intended purpose.
The Bee report found that SoCal Gas booked “at least $36 million to ratepayers for political lobbying to undermine California policies aimed at addressing the climate crisis since 2019.”
For context, a quarter of California’s carbon pollution comes from burning gas in homes and businesses.
A former U.S. attorney who once prosecuted gas utilities told The Bee reporters that such misuse of ratepayer monies might represent fraud — a possibility that a company spokeswoman strongly denied.
Questions over law firms
Yet The Bee’s investigation turned up billing records to law firms hired by SoCalGas that lobbied against climate-change initiatives or filed lawsuits challenging building electrification efforts.
In one instance, SoCalGas in 2022 billed ratepayers $700,000 for work done by a law firm that lobbied against climate-change initiatives. When The Bee reporters asked about it, the gas company “said it was removing it from the ratepayer account. It provided no explanation as to why customers had been billed in the first place.” The investigation found other similar examples.
Adding to suspicions, the California Public Advocates Office says SoCalGas has repeatedly refused to let it examine the utility’s books. SoCalGas cites First Amendment protections and client privileges in its denials. It is hard to see how opening the books for regulator review would undermine anyone’s free speech rights.
No, it is clear that SoCalGas is feeling threatened by California’s energy future. The Bee reports this:
“As early as 2015, company emails show that executives identified building electrification as ‘a significant risk to our business.’ In the years since SoCalGas has engaged in a sprawling and varied opposition campaign to defend its bottom line.”
Energy-industry experts agree that “there is one core reason why SoCalGas has so aggressively fought zero-emissions policies: Billions of dollars of market share and the future of energy in California is at stake,” The Bee reported.
SoCalGas spokesman Chris Gilbride denies such a characterization, saying the company fully accepts a noncarbon future and hopes to distribute hydrogen power instead of gas to meet climate goals. He says the company is a leader in its industry for seeking zero-emission goals. And Gilbride flatly denies SoCalGas misspent monies from ratepayers.
Fine and rate reduction
What can be done now? For one thing, the Public Advocates Office within the state Public Utilities Commission has proposed fining SoCalGas over the company’s not allowing its investigators to access SoCalGas’ accounting books and for failing to turn over crucial documents.
That same office has also recommended rate reductions of about $80 million because “evidence shows that SoCalGas has not tracked employee time” spent on lobbying activity funded by ratepayers.
The PUC last year levied a $10 million fine against SoCalGas for resisting climate-change efforts.
The PUC should act again. Customers in good faith made their utility payments each month to SoCalGas expecting their money would go back into maintaining their systems. To learn that monies were directed to efforts to protect the utility’s future, for the benefit of investors, is outrageous.
The Bee opened its story by describing a PUC meeting in 2019 in Los Angeles. After climate activists testified in favor of clean energy, a series of business owners followed and spoke about why they needed continued use of natural gas.
Unknown to the PUC members, those business owners had been recruited and driven to the hearing by a pro-industry group that had been contracted by SoCalGas for that purpose.
Who paid for that group’s services? SoCalGas ratepayers.
Using customers’ money for reasons other than utility maintenance, without disclosing it, is wrong. It’s time for the PUC to put a stop to it.
