SoCalGas backed case against Berkeley gas ban and asked customers to pay, advocates say

The nation’s largest gas utility sought to charge ratepayers more than $1 million for legal fees to support a challenge to Berkeley’s ban on natural gas hookups in most new buildings, environmental advocates say, a move they called a brazen attempt to block climate-friendly policies in California cities.

SoCalGas told advocates that it requested ratepayers pay $1.14 million to a law firm representing the California Restaurant Association (CRA) in its challenge to Berkeley’s ban, which was overturned by a federal court Wednesday. The utility has since rescinded the request and denies involvement in the case.

But legal researchers for Earthjustice, the environmental nonprofit that uncovered the payments, believe SoCalGas admitted to bankrolling legal research used in the lawsuit. Wednesday’s ruling is considered a setback to prospects for similar bans in dozens of cities across California, including Sacramento.

“These utilities are given a monopoly by the state but this one is actively working to undermine climate policy,” said Matt Vespa, an attorney at Earthjustice. “Gas bills are at an all time high, yet they tried to get away with putting the cost of climate obstruction onto customers. That’s extremely concerning.”

As California looks to decarbonize much of its economy, it is exploring a variety of strategies to replace natural gas with electric appliances. Gas burns cleaner than coal and oil but still contributes to climate change and releases damaging air pollution.

Clean energy advocates say that widespread replacement of gas with electric appliances will reduce planet-warming emissions and limit gas leaks that research shows can contribute to health issues.

SoCalGas has emerged as a powerful opponent to the push for electrification, backing lobbying campaigns to convince public officials of the need to preserve gas. The company is a legally sanctioned monopoly subject to oversight from the Public Utilities Commission.

The California Restaurant Association brought a lawsuit in 2019 against the city of Berkeley, the nation’s first city to ban gas hookups in most new buildings. Losing flame cooking in kitchens would negatively impact restaurants, the association argued, and local policy bypassed federal energy regulations.

In 2021, researchers with the California Environmental Justice Alliance began questioning SoCalGas payments to Reichman Jorgensen, the law firm representing CRA in the Berkeley suit. A review of expense reports show that the company paid the firm a total of $4,181,129 over the last three years.

The utility sought approval to charge ratepayers $1,786,838 in payments to Jorgensen in 2022, researchers say. Earthjustice asked SoCalGas whether the payments were related to the Berkeley lawsuit, and the CPUC recently forced the utility to answer.

“The Reichman Jorgensen costs referenced in your question are not being funded by ratepayers and are unrelated to the CRA’s legal challenge to the Berkeley ordinance,” said Dan Guthrie, a spokesperson for SoCalGas.

In their response to the CPUC Wednesday, the utility denied that the costs pertained specifically to the Berkeley case. But it said the costs were related to a variety of matters including “government actions potentially affecting natural gas service, including the legality of such laws and actions, such as whether they might be preempted by federal law.“

Earthjustice researchers say it’s clear that the payments were used for research underpinning the legal challenge against Berkeley’s gas ban because the California Restaurant Association’s case rested on an argument that the local ordinance preempted a federal law.

SoCalGas also said it had “unintentionally categorized” the payments as ratepayer dollars and rescinded the request.

Sharokina Shams, a spokesperson for the California Restaurant Association, said in a statement: “We are not aware of the reporting of the California Environmental Justice Alliance and are not privy to any work our legal counsel do on behalf of their other clients. Reichman Jorgensen LLP are representing CRA in this matter because they are experts in this area of litigation. We have not and do not coordinate with SoCal Gas on our litigation.”

This story was originally published April 22, 2023 at 6:00 AM.