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A state senator introduced a bill Wednesday to strengthen laws that prevent energy utilities in California from passing on the costs of political lobbying to their customers.
The proposed legislation comes in response to a Sacramento Bee investigation in August that found the nation’s largest gas provider, Southern California Gas Company, booked at least $36 million to ratepayers since 2019 to oppose clean energy policies.
“When I read this, I was like, ‘Holy crap, they’re using ratepayer money,’” said Sen. Dave Min, an Orange County Democrat who authored the bill. “I’m a SoCalGas customer. They’re using my money to lobby against climate regulations, and that is really messed up.”
Investor-owned utilities such as SoCalGas have “above the line” costs billed to customers and “below the line” costs drawn from corporate profits. Billing customers for anything other than providing safe and reliable energy service is a violation of state and federal law.
But such laws, Min said, are riddled with loopholes that have allowed utilities across the country to engage in political lobbying using customer money. His bill is aimed at closing several of those gaps in transparency and accountability.
The bill explicitly defines “political influence activity,” prevents the use of customer money for membership dues to trade groups such as the American Gas Association and requires utilities to disclose whether advertising campaigns are paid for by customers or shareholders.
It’s part of a growing wave of similar legislation across the country. Colorado, Connecticut and Maine all passed laws last year aimed at closing loopholes that had made it easier for utilities to charge customers for lobbying and political activity.
“SB 938 will put a stop to this practice by imposing stiff penalties on utilities that try to use ratepayer money for political purposes and creating new reporting requirements to make sure the utilities are actually complying with these rules,” Min said in a press release on the bill.
The Bee’s investigation found that Sempra, the parent company of SoCalGas that also owns San Diego Gas & Electric, has engaged in a sprawling opposition campaign to defend its bottom line from building electrification policies in California for nearly a decade. Often times, the company charged customers for that work through the state’s rate approval process.
The utility formed a front group Californians for Balanced Energy Solutions, drove sympathetic business owners to utility meetings, paid law firms for research into lawsuits that opposed building electrification and sponsored a false marketing campaign — all with money booked to ratepayers.
In a written statement, SoCalGas spokesman Brian Haas said: “SoCalGas has not had a chance to review the bill in question, but recent reports by The Sacramento Bee about SoCalGas’ use of ratepayer funds have been incorrect. SoCalGas is aligned and working transparently with state, local and federal leaders on a thoughtful path to net-zero emissions.”
Critics, including the watchdog arm of the California Public Utilities Commission, contend that SoCalGas has historically exploited the state’s rate approval process and lax oversight by billing ratepayers for political activities.
In addition to The Bee investigation, the Public Advocates Office has published several reports identifying tens of millions of dollars in inappropriate political lobbying booked to SoCalGas customers between 2017 and 2019.
The utility was fined $10 million for the behavior in 2022. Oftentimes, the company corrected those charges and booked them to investors months or years later after they were uncovered by regulators or members of the public.
“Californians’ gas and electric bills are high enough without having to foot the bill for their utilities to lobby and campaign against their interests,” said David Pomerantz, executive director of the Energy and Policy Institute.
“The enforcement provisions in Sen. Min’s bill will make California a leader in protecting customers and are desperately needed to show repeat offenders like SoCalGas that breaking the rules and harming customers will carry consequences from now on.”