California Regulators Signal Ratepayer Protection in Initial Rejection to SoCalGas

SAN FRANCISCO, CA - In a proposed decision last week, the California Public Utilities Commission (CPUC) recommended denying a SoCalGas application that would charge customers $266 million to study and plan the controversial Angeles Link Project pipeline. A final vote on the decision is expected in the coming months. If approved, it would force SoCalGas to either reconsider the pipeline entirely or require shareholders to pay to develop the risky project. 

The Angeles Link would transport hydrogen fuel, a volatile and expensive energy source, from Southern California into the Los Angeles Basin. Sierra Club, the California Environmental Justice Alliance (CEJA)] and others have criticized the project for its enormous costs. SoCalGas’ estimate to perform just one phase of the project’s overall planning ballooned from $92 million to $266 million between 2022 and 2024. Additionally, green hydrogen requires huge quantities of dedicated renewable energy to create. That same energy could be used more efficiently by directly replacing fossil fuels in end uses. Sierra Club and CEJA also challenged SoCalGas’ plan to charge gas customers for this project even though they would not directly benefit from it.

The CPUC's proposed decision says SoCalGas failed to identify specific benefits to its ratepayers and that it would be premature to approve costs while the project is still in the planning phase. This development complicates the already contentious proposal to convert the Scattergood power plant to hydrogen combustion, a project that was given initial approval by the Los Angeles Department of Water and Power last year.

"Affordability is rightly at the forefront of every energy conversation, and that's increasingly making hydrogen look like a risky and unnecessary technology to use at large scale. The CPUC was correct in its initial assessment that SoCalGas would put its customers at enormous risk, and that's not even considering the potential environmental and safety risks," said Julia Dowell, Senior Campaign Organizer at Sierra Club. "We're hopeful that the commission will finalize this decision and push the risk of hydrogen infrastructure on to wealthy shareholders, not working -class customers who are struggling with rising energy bills." 

“Since this project’s inception, CEJA has raised concerns about its impacts on environmental justice communities already overburdened with pollution. The enormous cost of such a system, and hydrogen’s extremely dubious use as an energy storage technology, make it even more troublesome,"said Theo Caretto, Staff Attorney at Communities for a Better Environment. "SoCalGas’ application is nothing more than an attempt to gamble their customers’ money for corporate profits. CEJA is heartened by this recommendation’s steadfast commitment to protecting California households from another gas false solution.”