Compounding the financial fallout from the largest gas leak in U.S. history, the California Public Utilities Commission announced today it has agreed to a $71 million settlement with Southern California Gas Co. over the 2015 Aliso Canyon leak near Porter Ranch that forced thousands of residents from their homes.
The settlement will become effective in 30 days unless a party to the case opts to appeal or a member of the CPUC requests a review.
SoCalGas spokesman Chris Gilbride told City News Service in a statement, “We are pleased to resolve this important matter after almost eight years.”
The Aliso Canyon leak began Oct. 23, 2015, and wasn’t capped until mid-February 2016. Nearly 100,000 tons of methane and other substances were released into the atmosphere over 118 days.
According to the CPUC, the settlement agreement announced Thursday requires SoCalGas to pay $71 million in to the Aliso Canyon Recovery Account, which was created by the state Legislature to address issues arising from the leak, including air quality concerns and public health.
The utility is also barred from attempting to recover costs of the settlement from ratepayers, nor can it bill ratepayers for other financial implications from the leak, including a $1.8 billion civil settlement reached in 2021 to resolve damage claims of more than 35,000 people.
According to the CPUC, any request by SoCalGas for rate increases over the next five years must include an attestation from the company that the hikes will not be used to offset the costs of any of the specified Aliso Canyon-related expenses listed in the settlement. Those expenses include roughly $126 million in government agency settlements, $462 million in costs of housing displaced residents during the leak, $108 million for a study of the leak’s causes and $376 million for attorneys, litigation and other regulatory costs.
In September 2016, SoCalGas pleaded no contest to a misdemeanor count of failing to immediately report the gas leak. Three other misdemeanor charges — one count of discharging air contaminants and two more counts of failing to report the release of hazardous materials — were dismissed as part of the deal.
Under its $4 million settlement agreement with prosecutors, SoCalGas was required to install and maintain an infrared methane monitoring system at the Aliso Canyon site — estimated to cost between $1.2 million and $1.5 million — and to retain an outside company to test and certify that the monitoring system and real-time pressure monitors to be placed at each gas well are working properly.
The agreement also mandated the hiring of a half-dozen full-time employees to operate and maintain the new leak-detection systems 24 hours a day at a cost of about $2.25 million over three years.
The agreement also called for the company to revise and adopt new reporting policies for actual and threatened releases of hazardous materials to the appropriate agencies, and mandated training courses on proper notification procedures for all of the utility’s employees who work at natural gas storage facilities within Los Angeles County.
