CPUC’s D.22-09-026 Exception Pathway Gets Its First Test: SoCalGas RNG Projects May Fall Short
Last week, parties filed opening briefs in A.25-07-001. Recall that, in this application, SoCalGas seeks approval to provide approximately $4.2 million in gas line extension allowances for eight non-residential Renewable Natural Gas refueling station projects serving heavy-duty transportation fleets.
Additionally, SoCalGas seeks authority to update its non-residential allowance multiplier, revise Tariff Rules 20 and 21, and establish a new balancing account to recover an estimated $14.9 million revenue requirement over time.
This is the first application filed under an exception pathway created by a 2022 decision (D.22-09-026) since the CPUC eliminated gas line extension allowances in that same decision. PG&E withdrew both its 2024 and 2025 line extension allowance applications, with PG&E itself acknowledging that there has never been a successful application by any party to use the pathway as a template.
SoCalGas's Opening Brief
SoCalGas argues that each project satisfies the three minimum criteria established in D.22-09-026:
- Demonstrable lifecycle GHG reductions;
- Consistency with California’s climate goals (including Senate Bill 32 and CARB’s Scoping Plan); and
- A lack of feasible non-gas alternatives.
SoCalGas contends that RNG displacement of diesel in refuse, freight, bus, and logistics fleets yields measurable emissions benefits while battery-electric or hydrogen options remain commercially or operationally infeasible for these specific applications.
Cal Advocates' Opening Brief
Cal Advocates recommends denial of the application, asserting that SoCalGas failed to meet its burden of proof under D.22-09-026 by relying primarily on unverified customer attestations regarding RNG volumes, emissions reductions, and lack of feasible alternatives, without independently substantiating the factual basis for those claims.
Cal Advocates argues that the company’s lifecycle methodology merely plugs customer-provided usage estimates into a formula, that procurement of low-carbon RNG is uncertain, and that the proposed projects therefore do not demonstrate the required GHG reductions or alignment with state climate policy.
Cal Advocates also challenges SoCalGas's request to create a new Gas Line Extension Allowance Balancing Account, arguing that the existing Gas Line Extension Balancing Account – established pursuant to the Sempra IOUs' 2024 General Rate Case decision, D.24-12-074 – could be modified to serve the same purpose, and that the CPUC has previously denied new balancing accounts where existing mechanisms are available (citing D.12-12-029).
Sierra Club's Opening Brief
Sierra Club likewise urges rejection, framing the projects as methane-burning vehicle refueling stations inconsistent with California’s long-term electrification trajectory and the CPUC’s prior elimination of categorical line extension allowance subsidies for such infrastructure.
- Sierra Club argues that SoCalGas's Application amounts to a collateral attack on D.22-09-026, contending that SoCalGas is effectively seeking the same categorical exemption for Compressed Natural Gas/RNG refueling stations that the CPUC already rejected, presenting boilerplate justifications with little project-specific differentiation rather than the "specific, unique" circumstances contemplated by the decision.
- Sierra Club emphasizes stranded asset risk (noting that the gas lines connecting to these stations would not be fully depreciated until 2096) conflict with zero-emission vehicle mandates, and Environmental and Social Justice concerns. It notes that six of the eight projects are in Disadvantaged Communities.
Last, Sierra Club cites the Commission's finding in D.24-12-074 that methane-burning vehicle refueling stations in Disadvantaged Communities are inconsistent with the CPUC's ESJ Action Plan, and introduced unrebutted testimony that Compressed Natural Gas vehicles can produce five to 50 times more ultrafine particulate matter than diesel vehicles certified to the same emissions standard.
INSTANT ANALYSIS
This is the first real test of D.22-09-026’s narrow exception pathway after the CPUC eliminated gas line extension allowances. SoCalGas seeks approval for eight RNG heavy-duty fueling projects totaling about $4.2 million in allowances, arguing they meet the three criteria: GHG reductions, climate consistency, and no feasible alternatives.
Evidentiary sufficiency will be the central issue in this case. Cal Advocates argues that SoCalGas relied on unverified customer estimates for RNG volumes and emissions reductions. The "no feasible alternatives" criterion may present the weakest evidentiary record:
- Customer applicants for Projects D1 and D2 (both waste collection fleet operations) provided essentially bare checkbox responses with no supporting data on range, vehicle types explored, or relative costs; and
- Neither Projects C (heavy-duty commercial logistics) nor D explored renewable diesel as an alternative despite customers themselves acknowledging they would retain diesel equipment absent gas infrastructure.
Cal Advocates identifies specific categories of missing evidence (route range data, EV models evaluated, refueling time comparisons, and cost analyses) that would constitute reasonable supporting documentation. If the CPUC finds the record thin, it can deny the application without revisiting broader electrification policy.
Sierra Club is arguing the stranded asset and ZEV mandate angle, but the collateral attack argument may carry independent procedural weight (if the CPUC views SoCalGas's generalized justifications as functionally recreating the categorical exemption it already rejected, that alone could support denial).
The balancing account dispute also offers the Commission a procedural off-ramp: it could deny the new Gas Line Extension Balancing Account even if inclined to approve some projects, forcing SoCalGas to use the existing GLEBA. Approval risks diluting the 2022 elimination decision. Denial reinforces that the exception pathway is real and demanding.