Utility giant sues Calif. over gas bans, climate plan

Source: By David Iaconangelo, E&E News reporter • Posted: Thursday, August 6, 2020

The nation’s largest gas utility is suing a California energy agency for considering how to phase out natural gas in buildings and other energy sectors, accusing it of violating a state law that promotes the fossil fuel.

The lawsuit led by Southern California Gas Co. (SoCalGas) against the California Energy Commission (CEC), filed in state court, alleges that officials violated the law earlier this year when they issued a forecast of California’s energy needs for the next decade. That forecast found the state’s climate laws would require a long-term decline in the use of natural gas for power generation, paired with a push to electrify cars and buildings’ heating systems.

By releasing the forecast — but forgoing a separate report on how to “maximize the benefits” of natural gas for the climate and consumers — the state neglected its duties under a 2013 law known as the Natural Gas Act, according to the lawsuit.

Caitlin McCoy, a staff attorney at Harvard Law School who has researched opposition to gas phaseouts, said the utility would likely be the first of many in tangling with regulators over gas phaseouts.

“This case is one to watch because California is on the forefront of climate action and decarbonization,” wrote McCoy in an email. “So we will likely see California’s efforts to phase out natural gas replicated in other states and SoCalGas’s efforts to challenge phase out replicated by other companies.”

SoCalGas, a subsidiary of Sempra Energy, has over 21 million gas customers in California. It was joined in the lawsuit by a local of the Utility Workers Union of America that represents SoCalGas workers, as well as Orange County-based Clean Energy, a compressed and liquefied natural gas provider.

“The California Legislature has made clear that natural gas is to play a significant role in the State’s balanced energy policy,” the groups wrote.

But the CEC has “decided to discourage and in effect eliminate natural gas in the State as a source of heat, light and power. That is not its decision to make,” they added.

The California Energy Commission declined to comment on the lawsuit.

The legal complaint came the same day last week as a separate lawsuit filed by the California Natural Gas Vehicle Coalition, which counts SoCalGas as a member. That lawsuit takes aim at the state’s new rule requiring truck manufacturers to sell a rising percentage of zero-emission models (Climatewire, Aug. 3).

The moves mark a new front of opposition from SoCalGas and its workers’ unions to California’s long-term plans for decarbonization. By 2045, the state must get 100% of its electricity from zero-carbon sources, and it has an informal goal of carbon neutrality for transportation, buildings and other sectors as well.

The utility and the UWUA have sought to block a wave of city-level gas bans in the state, even as the CEC contemplates a new rule that could force all new buildings to come without gas connections — a strategy that several towns in Massachusetts have pursued as well (Energywire, Aug. 3).

McCoy said that she believed the language of the state’s Natural Gas Act could be flexible enough to allow the state commission to move forward with gas phaseout policies.

“There is a good argument to be made that the language doesn’t bind the CEC to the continued use of natural gas,” wrote McCoy.

The lawsuit also took issue with the CEC’s analysis of the cheapest and most climate-conscious routes for building decarbonization — the subject of increasing contention between the fossil fuel industry and clean energy advocates.

One study commissioned by the agency found that ditching natural gas heating and cooking for electric heat pumps and induction stoves would be the least cost and most viable path for cutting buildings’ emissions.

SoCalGas’ complaint alleges that the CEC had overlooked the potential of renewable natural gas — or biomethane — and relied on “flawed and inaccurate” studies when it decided that building electrification would be a key strategy in the future.

“There are alternative ways to work toward decarbonization — ways that would not conflict with legislative mandates,” wrote the groups.