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Sempra company fined $10 million for ‘unlawful’ lobbying

CPUC: SoCalGas showed "profound, brazen disrespect for the Commission’s authority."

SAN DIEGO — Southern California Gas – a company owned by San Diego based Sempra – has been fined nearly $10 million by the California Public Utilities Commission (CPUC) for unlawful lobbying.

Earlier this month, an administrative law judge with the CPUC issued the decision saying, “The totality of SoCalGas’s arguments for why it should not be penalized demonstrate profound, brazen disrespect for the Commission’s authority.”

As first reported by the Associated Press, the judge issued the decision on February 3, ordering SoCalGas to pay $9.8 million. The decision still must be approved by a vote of the CPUC.

“It might surprise a lot of people to know that your utility is using your money to shape California's policy,” said Sara Gersen, an attorney with the environmental law group Earthjustice, a party involved the lobbying rulemaking litigation.

Lobbying at ratepayer expense is allowed under state law if the utility is encouraging more energy efficiency, for example, by supporting building codes that require electric stoves, said Gersen.

“Because in the long run, raising energy efficiency standards for the appliances we buy and the homes we build saves customers a ton of money,” said Gersen.  “The problem is that SoCal Gas got caught using our money to lobby against stronger energy efficiency standards.”

You might ask – why would a Sempra utility company lobby against the State's climate goals?

“The trend toward electrifying homes is an existential threat to SoCalGas's business,” said Gersen. “SoCalGas and its parent company Sempra have a business model that relies on selling fossil fuels.”

Examples of the alleged lobbying violations were included case filings.  One alleged SoCal Gas sent a letter on August 9, 2019 to the City of San Luis Obispo concerning proposed local amendments to the 2019 California Building Code.

“Overall, the cost-effectiveness analysis appears to be designed to reach a predetermined conclusion to support building electrification as the optimal pathway to decarbonize buildings . . . Large scale, economy-wide cost impacts to City residents and businesses should be based on robust and broad technical support and analysis, which . . . the current cost-effectiveness study does not do.  We support the city’s goal to reduce its carbon emissions but do not believe an all-electric scenario achieves that and places unnecessary costs on residents,” the SoCal Gas letter was quoted as saying.

SoCal Gas is the same company that reportedly paid $1.8 billion dollars last year to settle a lawsuit over the massive 2015 gas leak in Aliso Canyon.

The utility emailed CBS 8 the following statement:

“We hear and respect the Administrative Law Judge’s decision on this issue. Over the last two years and in response to this proceeding, we have enhanced our company’s accounting and oversight practices. We look forward to working with the CPUC and staff on how to strengthen these efforts.  Under new leadership, SoCalGas is focused on a business strategy that is sustainable and aligned with California reaching its climate and clean air goals more quickly and more equitably.”

CBS 8 has been monitoring cases filed by Sempra and SDG&E before the CPUC, including hearings set for February 24 & 25 where SDG&E is fighting an automatic reduction of its equity profits for 2022.

Sempra’s quarterly and annual earnings report is due out on Friday, February 25.

WATCH RELATED: A closer look at the compensation for Sempra & SDG&E executives (Feb. 2022).

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