June 11 CPUC Voting Meeting Preview: SoCalGas Under Continued Safety Scrutiny; SDG&E's $267.9M Battery Deal Nears Approval

Next week's CPUC voting meeting covers a fair amount of ground: SoCalGas's safety culture oversight, SDG&E’s utility-owned storage acquisition, CTA complaint-cost allocation, shared renewables implementation (sans expected funding), and updated ReMAT avoided-cost prices.

UTILITY SAFETY CULTURE

A proposed decision resolves Phase 2 of I.19-06-014, the CPUC's seven-year examination of whether safety failures at SoCalGas (beginning with the 2015 Aliso Canyon leak) stem from organizational culture and governance deficiencies.

The PD accepts SoCalGas's revised Safety Culture Improvement Plan as a credible framework for implementation but does not endorse the effectiveness of any specific intervention. SoCalGas is permitted to proceed. The PD does not declare the company "fixed."

In its next quarterly compliance report, SoCalGas must:

• Explicitly incorporate security into its definition of comprehensive safety;
• Strengthen contractor integration with metrics and oversight comparable to employee-focused efforts;
• Expand its corrective action program to capture public and non-occupational safety concerns; and
• Demonstrate that "Learning Team" sessions on resource allocation (staffing vacancies, leak response timelines, informal downgrade practices) continue until no new insights emerge.

Implementation-level reporting is required throughout: timelines, milestones, budgets, and intervention-specific metrics. Quarterly compliance reporting will continue through the next safety culture assessment, which must commence no later than August 2029.

The PD also creates a Tier 2 Advice Letter pathway, which delegates authority to the CPUC's Safety Policy Division to approve Safety Culture Improvement Plan revisions when interventions fall short, bypassing a full Commission vote.

The PD finds that SoCalGas's parent company, Sempra, has provided minimal participation and has not met expectations set in prior decisions. Going forward, SoCalGas must maintain a consolidated plan tracking Sempra's contributions and demonstrate through quarterly reporting how parent-level governance responds to assessment findings originally directed at Sempra. CPUC staff retains authority to engage SoCalGas's board directly as implementation evolves.

Shareholders remain financially responsible. SoCalGas has already incurred more than $5 million in unrecoverable Safety Culture Improvement Plan costs, and the CPUC again rejects ratepayer recovery for safety culture remediation. The restriction extends through the next assessment cycle, leaving future implementation and plan revisions to shareholders.

INSTANT ANALYSIS: The practical effect of this PD is a long-duration compliance obligation with no ratepayer cost recovery before the next assessment cycle and staff-controlled checkpoints at every quarterly interval. SoCalGas receives permission to implement, not credit for having solved anything. The finding that Sempra's participation is inadequate is now on the record, and future independent assessments are explicitly recommended to evaluate Sempra's influence.

UTILITY-OWNED STORAGE

Draft Resolution E-5467 approves SDG&E's acquisition of the 119 MW Westside Canal Phase 2a battery storage project from an RWE subsidiary through a Membership Interest Purchase Agreement, plus a 10-year operations and maintenance agreement. The Imperial Valley project came online in December 2024 and is intended to support 2026 and 2027 summer reliability under the Effective Planning Reserve Margin framework. The total estimated cost is $267.9 million, recoverable through the Cost Allocation Mechanism.

INSTANT ANALYSIS: The project already exists, already dispatches in CAISO markets, and RWE already sells short-term resource adequacy from it on a merchant basis. SDG&E's purchase adds no new physical capacity. Draft Resolution E-5467 approves it anyway by finding the project incremental on a technicality (it is not on the baseline resource list) and authorizes full CAM cost recovery across all benefitting customers.

The cost-recovery question extends beyond this proceeding. Three protesters argued SDG&E had already hit the top of its 120-220 MW Effective Planning Reserve Margin procurement target and that CAM recovery should be capped accordingly. Energy Division rejects that, reading the Effective Planning Reserve Margin framework as a floor investor-owned utilities may exceed. The range is not a ceiling.

The deliverability problem has no real answer in this draft resolution. The project has interim status for 2025 and 2026 but will not achieve full capacity deliverability until transmission upgrades are completed, potentially in 2034. Quarterly reporting to the CAM Procurement Review Group creates visibility, not protection. If interim deliverability lapses, customers carry the full cost of a $267.9 million utility-owned asset that cannot perform the reliability function used to justify its approval.

CORE TRANSPORT AGENTS

Draft Resolution G-3621 reaffirms the annual fee structure for California Core Transport Agents, the non-utility gas suppliers serving residential and small commercial customers. The draft resolution retains the framework from a previous resolution (Resolution G-3597, 2023) without introducing new fee design. Each registered CTA pays a $5,000 base fee, with variable fees assessed only against companies that generated complaints or faced unauthorized enrollment investigations and enforcement activity in 2025.

The CPUC grounds the structure in Senate Bill 656 and a 2018 decision (D.18-02-002), which expanded CTA oversight after years of deregulated gas procurement. With 39 registered CTAs and 36 active participants, the CPUC argues the market is mature enough that higher fees pose no meaningful barrier to entry.

Fixed administrative costs rose 34% in 2025 but remain within the tolerance band established in G-3597, so the base fee remains at $5,000. The more notable development is complaint volume, which surged 75% over the prior year. Unauthorized enrollment complaints reviewed by the CPUC's Utility Enforcement Branch rose nearly as much, even as formal enforcement actions fell by more than half.

The complaint surge produces wide fee dispersion. Wave Energy faces the largest total assessment at approximately $206,000. SFE Energy exceeds $118,000. BP Energy, Shell, and Calpine each pay only the $5,000 base fee, having generated no complaints or enforcement activity.

INSTANT ANALYSIS: This draft resolution further embeds complaint-driven cost allocation as the basis of California's retail gas oversight regime. CTAs with persistent enrollment and marketing problems are funding a growing share of CPUC enforcement infrastructure, while operators with clean complaint records pay only the administrative floor. The draft resolution does not propose market reforms or stricter registration standards, but the staffing expansion suggests that the CPUC expects elevated oversight demands to persist.

SHARED RENEWABLES

A proposed decision implements California's Shared Renewables Portfolio without the funding that was intended to support it. Federal Solar for All money is gone, terminated by the Environmental Protection Agency in August 2025. A $33 million state appropriation reverted to the General Fund in June 2025. The program will proceed anyway.

The PD ties the new Community Renewable Energy tariff to the Renewable Market Adjusting Tariff program. Proposals for capacity adders, expanded project sizes, time-of-delivery adjustments, and above-avoided-cost compensation were all rejected as inconsistent with the Public Utilities Code. Nonparticipating customers will not pay above avoided costs.

INSTANT ANALYSIS: The basic concept of this program survives. The economics that would have driven participation do not.

ReMAT PRICE UPDATE

Draft Resolution E-547 updates fixed avoided-cost rates for California's Renewable Market Adjusting Tariff, a feed-in tariff for small renewable generators at (or below) 3 MW. PG&E, SCE, and SDG&E would have 30 days from the effective date to amend their tariffs.

The 2026 rates reflect a weighted average of Renewable Portfolio Standard contracts executed 2020–2025 for projects 20 MW or smaller. The 43-contract pricing dataset is heavily weighted toward CCA-procured solar PV in Los Angeles County, including a substantial Prologis rooftop portfolio. The baseload category draws almost entirely on Nevada geothermal. A confidential geothermal contract executed in 2025 is the only new baseload entry (the most plausible driver of the $16.37 increase, though the draft resolution does not say so explicitly). As of February 2026, the program totals 65 contracts and approximately 112 MW since inception.

INSTANT ANALYSIS: The baseload rate eclipsing $92/MWh confirms that firm renewable capacity (geothermal above all) commands a widening premium over intermittent resources in California's small-scale procurement market. The near-flat peaking price tells the opposite story: CCA solar has saturated that category to the point where new contracts move the weighted average almost nothing. CCAs now dominate the RPS contract dataset that sets these rates. The avoided-cost benchmark for small QFs is increasingly a CCA-derived number, not a utility one (a shift with long-term implications for how ReMAT prices reflect actual utility procurement costs).