California Regulators Reject $266 Million in Ratepayer Funding for SoCalGas Hydrogen Pipeline Project

The California Public Utilities Commission (CPUC) has rejected Southern California Gas Company's (SoCalGas) proposal to charge ratepayers $266 million for Phase 2 front-end engineering and design (FEED) work on the proposed Angeles Link hydrogen pipeline.

In decision A.24-12-011, the CPUC determined that allocating speculative engineering and stakeholder outreach costs to customer bills violated cost causation rules under Public Utilities Code §739.6. While regulators previously approved up to $26 million for Phase 1 feasibility studies, they found the full Phase 2 costs premature for ratepayer recovery without binding offtake agreements or participation guarantees.

The Angeles Link project would construct an open-access pipeline capable of transporting 1.5 million metric tons of renewable hydrogen annually across the Los Angeles Basin. Technical design includes high-strength steel or advanced composites, fiber-optic monitoring, compression stations every 20–30 miles, and custody transfer stations at the Ports of Los Angeles and Long Beach, industrial facilities, and power plants. The pipeline would follow API 5L steel specifications and ASME B31.12 hydrogen service standards.

Consumer advocates, including the Office of Ratepayer Advocates and Environmental Defense Fund, argued that current customers would not directly benefit from Phase 2 work. The CPUC agreed, noting the full cost would approximate $0.35 per meter monthly over three years—an unfair burden on households, particularly low-income families dependent on natural gas.

SoCalGas can continue documenting Phase 2 expenses internally but cannot bill customers until demonstrating project prudence and securing real customer commitments. The decision shifts financing toward shareholders, private investors, or public-private partnerships.

Originally reported by Hydrogen Fuel News. Read the full article →