Public Advocates Office Investigation Into SoCalGas Pro-Gas Advocacy

The Public Advocates Office at the California Public Utilities Commission (CPUC) has been investigating Southern California Gas Company’s (SoCalGas) activities to advocate for the use of natural gas, and how the company has accounted for the costs associated with these activities.  The Public Advocates Office investigation began in May 2019 in the CPUC’s Building Decarbonization proceeding (R.19-01-011) when the Sierra Club filed a motion to deny party status in that proceeding to the non-profit organization Californians for Balanced Energy Solutions (C4BES).  The Sierra Club motion explained that SoCalGas had secretly created and funded C4BES to advocate for the continued use of natural and renewable gas on behalf of the utility.


Cal Advocates’ investigation has revealed that SoCalGas has engaged in numerous campaigns throughout the state intended to promote gas use.  These campaigns were conceived, designed, and led by SoCalGas, often using surrogates to obscure the fact that SoCalGas was responsible for these campaigns.  Among other things, SoCalGas has:

  • Formed coalitions to convince the Los Angeles Metropolitan Transportation Authority to procure natural gas buses in lieu of electric ones,
  • Convinced local officials in over 100 jurisdictions to reject “Reach Codes” that seek to limit the installation of gas in new construction, and
  • Succeeded in ensuring the continued use of natural gas at the Ports of both Long Beach and Los Angeles.

While SoCalGas now claims that all these activities were “100% shareholder-funded,” the evidence is to the contrary.

 

It is a fundamental regulatory principle that utilities cannot include costs in rates that do not benefit ratepayers. Documents obtained by Cal Advocates reflect that SoCalGas booked costs for these advocacy activities to “above the line” operation and maintenance accounts typically charged to ratepayers. The Cal Advocates investigation also reveals that SoCalGas employees – whose salaries and benefits are funded by rates – worked on these advocacy efforts, that SoCalGas mischaracterized its advocacy activities as “education” to skirt laws against using ratepayer funds for such advocacy, and that SoCalGas and its hired consultants may not have complied with state and local lobbying reporting requirements.  

 

While SoCalGas may lobby government entities and officials regarding the state’s climate change policies, it is wholly inappropriate for SoCalGas to obscure its role in these lobbying campaigns, to charge the costs for these activities to ratepayer-funded accounts, or to provide false and misleading responses regarding these activities to CPUC staff.  Our investigation has revealed that SoCalGas has engaged in all these practices.

 

In the interest of transparency, the following links provide access to the public versions of pleadings submitted regarding these issues, which are not available in any formal CPUC proceeding.  It also includes some of the publicly-available information obtained by Cal Advocates through its investigation, and links to other documents and information that is relevant to this inquiry.

 

You can access the documents here: