Some real shady behavior

The nation's largest gas utility is trying to prevent regulators from learning more about its anti-climate political tactics.

Jul 27, 2020

Photo by David McNew/Getty Images

I want to direct you to Sammy Roth’s latest story in the Los Angeles Times. It’s an important look at how Southern California Gas Company, the nation’s largest gas utility, is trying to prevent regulators from learning more about its tactics to prevent meaningful climate policy across California.

You learned about some of these tactics earlier this month, when HEATED reported on SoCalGas’s failed efforts to kill zero-emission building standards in the small city of San Luis Obispo.

It was a truly wild story. To prevent a relatively small climate policy, SoCalGas first sent in a front group to advocate against it. Then, a company union leader threatened a “no social distancing” protest if lawmakers voted on it. Finally, amid nationwide protests over George Floyd’s murder, a well-known energy industry consultant tried to spread a manufactured story that the policy was racially discriminatory. Advocates suspect, but have not confirmed, that he was working for SoCalGas.

Roth’s story today takes a larger look at SoCalGas’s efforts to kill climate policy across the state—and what the company is doing to prevent the public from finding out more about them. I encourage you to read it in full, but I’ve also summarized it below, and provided a bit of added context at the end.

Is SoCalGas using customer money for anti-climate work?

Last year, the California Public Advocates Office launched an investigation into SoCalGas over its political advocacy for natural gas, a fossil fuel that’s currently driving the global growth in greenhouse gas emissions and worsening the climate crisis. The watchdog is investigating “the gas company’s inappropriate use of customer money to fight climate change policies,” Roth reports.

Specifically, SoCalGas is fighting against policies that would promote zero-emissions electric cars and buses, and zero-emissions electric buildings powered by renewable energy. SoCalGas is advocating for what it calls “balanced energy solutions” to the climate crisis—which means more widespread use of natural gas.

So far, SoCalGas has “helped persuade more than 120 city and county governments to pass … resolutions calling for ‘balanced energy solutions’—a centerpiece of the company’s efforts to demonstrate widespread opposition to phasing out gas,” Roth reports.

SoCalGas is allowed to do all this. It’s not, however, allowed to spend customer money for it. SoCalGas is the largest state-sanctioned gas monopoly in the country. As such, Roth explains, “it’s required to spend ratepayer money strictly on programs that benefit ratepayers, such as infrastructure upgrades that improve safety or efficiency programs that help customers reduce gas use.”

But the Public Advocates Office—part of the California Public Utilities Commission, which regulates SoCalGas—thinks the company might be using ratepayer money for its anti-climate political work anyway.

SoCalGas refuses to comply with watchdog subpoena

SoCalGas is not allowing the watchdog to figure out if that’s true. The company has now spent months fighting the regulator’s investigation.

In the latest clash, the company has failed to comply with subpoenas seeking access to its financial records—claiming such access would have a “chilling” effect on its “core constitutional rights.” From Roth’s story:

In May, the Public Utilities Commission served SoCalGas with a subpoena, ordering the company to give the Public Advocates Office access to its accounting system. The company said it would comply only if it could shield certain financial records from view, including activities funded entirely by shareholders and documents protected by attorney-client privilege.
“SoCalGas takes seriously its obligations as a regulated entity to make its books and records available to the commission and Cal Advocates on request,” the company wrote, using another name for the Public Advocates Office. “But it must comply with its obligations in a manner that protects its privileged and constitutionally protected information from disclosure to Cal Advocates.”
SoCalGas made similar arguments in response to an earlier data request, saying the Public Advocates Office’s demands amounted to a violation of its rights to free speech and free association. The company said that earlier request — seeking information about political activities that it claims are 100% shareholder-funded — “tramples dangerously on core constitutional rights.”

The public watchdog “declined the gas company’s offer of partial access to its financial records, demanding full access,” Roth reported. It now says SoCalGas “should be fined millions of dollars” for its refusal.

SoCalGas: past misuse of customer money just a whoopsie daisy

The Public Advocates Office has reason to be suspicious about how SoCalGas is using its money, because SoCalGas has misused ratepayer money for anti-climate political activities in the past.

The consumer watchdog’s latest discovery, Roth reports, was a March 2019 work order from SoCalGas authorizing nearly $28 million for “balanced energy” activities. The order described those expenditures “as operations and maintenance, which are typically funded by ratepayers.”

SoCalGas acknowledged this, but said it was just a mistake. Just a lil’ whoopsie daisy!

Typical investor-owned utility behavior

SoCalGas is an investor-owned utility. That means that, even though it acts as a public utility, it is a private enterprise.

These types of utilities are well-known for working with fossil fuel companies and interest groups to aggressively promote climate science misinformation and fight climate policy. A report from Brown University’s Climate and Development Lab last year, for example, investigated ten large investor-owned utilities and found they were “historically central to the climate change countermovement, a complex network dedicated to opposing climate action and undermining science for the last three decades.”

Investor-owned utilities also serve 72 percent of U.S. electricity customers.

Are publicly-owned utilities the solution?

To wrap things up here, I’ll just direct you to the best Teen Vogue article ever written: “Publicly Owned Utilities Could Help Fight the Climate Crisis.”

I’m not even kidding. That’s a Teen Vogue article. And it’s really, really good. There’s a section called “A New Era of Energy Democracy” that outlines emerging campaigns for publicly-owned utilities in several different states, all focused on delivering climate justice to frontline communities and electrical workers.

For instance, The #NationalizeGrid campaign in Rhode Island has been fighting, alongside its coalition partner, the George Wiley Center, for statewide public power.
“It’s a pretty simple piece of legislation [requiring] a very minor tax increase across the state, [that would mean] low-income payers would only need to pay a certain percentage of their monthly income as their utilities payment,” explained Corey Krajewski, an activist with the campaign.
Boston’s Take Back the Grid campaign has been focused on ensuring workers and communities of color in Boston benefit from the shift to a publicly owned renewable grid.
Similarly, Northern California’s Let’s Own PG&E campaign has been thinking through ways to ensure that the PG&E workers are included in the new energy system. One idea they’ve been considering is a proposed ballot measure to protect these workers’ pensions, explained Emily Algire, one of the organizers in the campaign.

I’d love to hear your thoughts on the public/private utility question, and on the Public Advocates Office’s investigation into SoCalGas, in the comments.