California, SoCalGas Reach $119M Deal Over Massive Leak

In this Dec. 9, 2015, file pool photo, crews work on a relief well at the Aliso Canyon facility above the Porter Ranch area of Los Angeles. (Dean Musgrove/Los Angeles Daily News via AP, Pool, File)

LOS ANGELES (CN) – While a major California utility company agreed to pay $119.5 million in penalties to settle California’s case over a massive methane leak at one of its storage facilities in 2015, state officials stressed Wednesday this does not address the claims of thousands of residents who were forced to flee their homes for months.

The settlement with local and state government agencies requires Southern California Gas Company to pay for a $25 million health study and other changes to monitor the Aliso Canyon site and neighboring communities.

The Aliso Canyon methane blowout is the largest gas leak in U.S. history.

Over 100,000 tons of methane poured out from the Aliso Canyon natural gas storage site beginning in October 2015, prompting the evacuation of several nearby communities including Porter Ranch in the northwest region of Los Angeles.

About 8,000 families were forced out of their homes, some for months, as the utility company worked to fix the gas well. The leak was finally capped in February 2016.

Before the leak was discovered, however, residents reported headaches, nose bleeds and other health issues.

More than 400 lawsuits have been filed in Los Angeles Superior Court involving more than 48,000 plaintiffs, according to an earnings report from SoCalGas’ parent company. The company also said the leak has so far cost it $1 billion.

In a statement, SoCalGas said Wednesday’s settlement reimburses city, county and state governments for costs associated with the leak. The company said it will create a program with the California Air Resources Board to reduce methane gas emissions.

California Attorney General Xavier Becerra announces a $119.5 million settlement with SoCalGas over the 2015 methane gas leak in Los Angeles County. (Nathan Solis/CNS)

But California Attorney General Xavier Becerra noted the settlement does not affect the hundreds of pending lawsuits or address any investigations being conducted by the California Public Utilities Commission, which could add additional penalties.

“We require in the settlement that Southern California Gas refrain from shifting the costs of this settlement onto ratepayers who use SoCalGas facilities and utilities,” said Becerra at a press conference in Los Angeles.

Also, the agreement requires the utility to pay $3 million to monitor methane levels at the Aliso Canyon site, create a new internal safety committee which will be in place for eight years and assign a safety ombudsman to evaluate the safety committee’s work – a third party separate from the utility company who will lead town hall meetings.

LA Mayor Eric Garcetti called the Porter Ranch episode a “traumatic event” that should make Angelenos “rethink our relationship with power production.”

State officials have set a closure date for the Aliso Canyon site, but it will continue operating for another decade.

The settlement was lodged with the LA County Superior Court. The public has 35 days to comment, after which the court will be asked to approve the settlement.

Ahead of the Wednesday’s press conference, Porter Ranch resident and outspoken SoCalGas critic Matt Pakucko was asked to leave the room. Officials told him the event was for credentialed media only. Outside, he told reporters the settlement was a publicity stunt.

“It’s a big payday nexus for the city, county and the state. The victims get nothing. That money gets distributed to all sorts of places – nothing to do with what happened in the north San Fernando Valley,” said Pakucko. “This is just some backroom BS.”

Pakucko is one of the thousands of plaintiffs suing SoCalGas. A trial date for some of those lawsuits has been set for December, more than three years after the blowout.

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