The Southern California Gas Co. on Monday announced that several agreements have been reached that are expected to resolve substantially all civil litigation against SoCalGas from the 2015 Aliso Canyon natural gas storage facility leak.
As a result, SoCalGas will record an after-tax charge of approximately $1.1 billion this month, and the company said settlement costs will not be borne by ratepayers.
The first agreement is subject to receiving about 97 percent participation from among 36,000 individual plaintiffs and court approval of the settlement allocation process, among other conditions. The second and third agreements involve settlement with a class estimated to include at least 23,000 properties and dismissal of the named plaintiffs in a putative business class action, both of which are subject to court approval, SoCalGas said in its news release.
Scott Drury, chief executive of the utility, said the agreements were an important milestone to help the community and the company put a difficult chapter behind them.
“In the years since the leak, SoCalGas has worked alongside regulators, technical experts, and our neighbors to enhance safety at all our underground storage facilities and our engagement with the community,” Drury said in a statement. “As a result, our storage facilities operate by what regulators and experts have called some of the most rigorous safety standards in the country.”
The Aliso Canyon natural gas storage facility, located near Porter Ranch in the north San Fernando Valley, was the site of the nation’s largest natural gas leak. The leak began in October 2015 and was finally plugged in February 2016.
SoCalGas is owned by Sempra Energy in San Diego and is the largest natural gas distribution utility in the United States, serving nearly 22 million customers.
Some groups were not pleased with the settlements.
Alexandra Nagy, the state’s director of Food & Water Watch, a national advocacy group to protect food, water and the climate, said that money alone will never atone for what the gas leak unleashed on thousands of Los Angeles families.
“Nor will it erase the legacy of SoCalGas’ negligence. Community members still suffer daily from the health impacts of poisonous gases released into their neighborhoods then and now,” Nagy said in a statement. “If SoCalGas thinks $1.1 billion is enough to buy their silence or muddle their memories, it is sorely mistaken.”
Matt Pakucko, co-founder and president of Save Porter Ranch, a citizens group, said no one should get too excited by the agreement.
“You can’t put a price tag on human suffering,” Pakucko said in a statement. “SoCalGas’ devastating blowout will never be behind us until the Aliso Canyon storage facility is shut down and the danger it poses to the community is permanently eliminated. We are nowhere near a resolution.”
In July 2017, state regulators cleared SoCalGas to resume injections at the Aliso Canyon natural gas storage facility. In accordance with new state regulations, SoCalGas has enhanced the operational safety and reliability of the facility. At the state’s direction, the field is being operated at a reduced pressure, providing an additional margin of safety.
SoCalGas previously entered into a settlement agreement with the Los Angeles City Attorney’s Office, the County of Los Angeles, the California Office of the Attorney General and the California Air Resources Board to resolve all outstanding claims by those government bodies against the company related to the leak, it said in its release.