CPUC Protects Ratepayers, Rejects SoCalGas’ Attempt to Charge Customers for Hydrogen Pipeline

The California Public Utilities Commission (CPUC) has rejected Southern California Gas Company’s (SoCalGas) proposal to charge customers $266 million to fund the Angeles Link Project, a pipeline intended to transport hydrogen fuel into the Los Angeles Basin. This decision effectively forces SoCalGas to either abandon the project or finance it through shareholder investment rather than passing the costs onto consumers. The CPUC’s ruling highlights concerns over the project’s financial risks and the lack of clear benefits to ratepayers, particularly given that the project remains in its early planning stages. The Angeles Link Project has faced criticism from environmental groups such as the Sierra Club and the California Environmental Justice Alliance (CEJA), who argue that the escalating costs—from an initial $92 million estimate in 2022 to $266 million in 2024—are unjustifiable. They also point out that producing green hydrogen demands substantial renewable energy resources, which could be more efficiently used by directly replacing fossil fuels in end-use applications. Furthermore, opponents have challenged SoCalGas’s attempt to recover these costs from gas customers who would not directly benefit from the pipeline. Julia Dowell, Senior Campaign Organizer for the Sierra Club, praised the CPUC’s decision, emphasising the commission’s role in protecting consumers from financial exposure to a high-risk infrastructure project. Dowell noted that the ruling ensures shareholders, rather than working-class households already burdened by rising energy costs, bear the risks associated with hydrogen infrastructure development. The decision also adds complexity to related initiatives, such as the proposed conversion of the Scattergood power plant to hydrogen combustion, which has already received preliminary approval from the Los Angeles Department of Water and Power. This ruling underscores the broader challenges facing hydrogen infrastructure projects in California, particularly regarding cost allocation and the practical viability of hydrogen as a clean energy source. It signals a cautious approach by regulators in approving large-scale hydrogen investments without clear, demonstrable benefits to consumers. Going forward, SoCalGas will need to reconsider its strategy for advancing the Angeles Link Project, potentially shifting the financial burden away from customers and addressing environmental and safety concerns raised by advocacy groups.