Summary
Sempra Energy's indirect subsidiary, Southern California Gas Company (SoCalGas), has reached a $119.5 million settlement agreement with various California government entities to resolve all outstanding claims related to the 2015 Aliso Canyon natural gas leak. This settlement addresses the mitigation of the actual natural gas released and includes significant funding for environmental initiatives and penalties. Investors should note that the financial impact of this settlement has already been fully accrued as of June 30, 2018, and was reflected in the company's Form 10-Q filed on August 6, 2018. The settlement requires court approval but provides clarity on the financial and operational commitments stemming from the Aliso Canyon incident. SoCalGas has also committed to ongoing safety measures, including methane monitoring and an independent ombudsman.
Key Highlights
- 1Sempra Energy's subsidiary, SoCalGas, settled all claims related to the Aliso Canyon natural gas leak for $119.5 million.
- 2The settlement amount includes $45.4 million for local environmental benefit projects chosen by government plaintiffs, and $26.5 million for dairy methane capture and pipeline injection projects.
- 3A portion of the settlement, $21 million, is designated for civil penalties, and $19 million will reimburse government response costs.
- 4The financial impact of the settlement was fully accrued as of June 30, 2018, and reported in the company's August 6, 2018 10-Q filing.
- 5SoCalGas will continue its fence line methane monitoring program.
- 6An independent ombudsman will be hired to monitor and report on safety at the Aliso Canyon facility.
- 7The settlement is subject to approval by the Los Angeles County Superior Court.