SoCalGas Announces Agreements to Resolve Aliso Canyon Litigation

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Sep 27, 2021, 16:13 ET

LOS ANGELES, Sept. 27, 2021 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) today announced agreements that are expected to resolve substantially all material civil litigation against SoCalGas related to the 2015 Aliso Canyon natural gas storage facility leak. As a result of the agreements, SoCalGas will record an after-tax charge of approximately $1.1 billion this month. Settlement costs will not be borne by ratepayers.

The first agreement is subject to obtaining roughly 97% participation among approximately 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 the dismissal of the named plaintiffs in a putative business class action, both of which are subject to court approval.

"These agreements are an important milestone that will help the community and our company work toward putting this difficult chapter behind us," said Scott Drury, CEO of SoCalGas. "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. As a result, our storage facilities operate by what regulators and experts have called some of the most rigorous safety standards in the country."

Background

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.

Industry-leading technology and practices in place at Aliso Canyon include:

Use of casing around inner steel tubing to provide a physical, secondary barrier of protection;
Integrity assessments on all wells with advanced inspection tools and pressure testing;
Around-the-clock pressure monitoring of all wells by a 24-hour operations center; and
Wellhead and fence-line methane detection systems.

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.

For additional information about the agreements announced today to resolve Aliso Canyon natural gas storage facility litigation as well as remaining legal and regulatory proceedings related to the leak, please see the Current Report on Form 8-K filed by Sempra and SoCalGas with the Securities and Exchange Commission today.

For more information about Southern California Gas Company, visit www.socalgas.com

About SoCalGas
Headquartered in Los Angeles, SoCalGas® is the largest gas distribution utility in the United States. SoCalGas delivers affordable, reliable, and increasingly renewable gas service to 21.8 million consumers across 24,000 square miles of Central and Southern California. Gas delivered through the company's pipelines will continue to play a key role in California's clean energy transition—providing electric grid reliability and supporting wind and solar energy deployment.

SoCalGas' mission is to build the cleanest, safest and most innovative energy company in America. In support of that mission, SoCalGas is committed to the goal of achieving net-zero greenhouse gas emissions in its operations and delivery of energy by 2045 and to replacing 20 percent of its traditional natural gas supply to core customers with renewable natural gas (RNG) by 2030. Renewable natural gas is made from waste created by dairy farms, landfills, and wastewater treatment plants. SoCalGas is also committed to investing in its gas delivery infrastructure while keeping bills affordable for customers. SoCalGas is a subsidiary of Sempra (NYSE: SRE), an energy services holding company based in San Diego. For more information visit socalgas.com/newsroom or connect with SoCalGas on Twitter (@SoCalGas), Instagram (@SoCalGas) and Facebook.

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed in any forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors. In this press release, forward-looking statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "under construction," "in development," "target," "outlook," "maintain," "continue," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations. Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: satisfying all conditions precedent to the settlement agreements, including the participation of a sufficient number of plaintiffs and court approvals; decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the California Public Utilities Commission (CPUC), U.S. Department of Energy, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S. in which we do business; the success of business development efforts and construction projects, including risks in (i) completing construction projects or other transactions on schedule and budget, (ii) the ability to realize anticipated benefits from any of these efforts if completed, and (iii) obtaining the consent of partners or other third parties; the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including, among others, those related to the natural gas leak at the Aliso Canyon natural gas storage facility; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our substantial debt service obligations; actions to reduce or eliminate reliance on natural gas, including any deterioration of or increased uncertainty in the political or regulatory environment for local natural gas distribution companies operating in California; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires or subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance, may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas and natural gas storage capacity, including disruptions caused by limitations on the withdrawal of natural gas from storage facilities; the impact of the COVID-19 pandemic on capital projects, regulatory approvals and the execution of our operations; cybersecurity threats to the storage and pipeline infrastructure, information and systems used to operate our businesses, and confidentiality of our proprietary information and personal information of our customers and employees, including ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business; volatility in inflation and interest rates and commodity prices and our ability to effectively hedge these risks; changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, or impair our ability to resolve trade disputes; and other uncertainties, some of which may be difficult to predict and are beyond our control. These risks and uncertainties are further discussed in the reports that the company has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on Sempra's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

SOURCE Southern California Gas Company