The controversy surrounding an idle Southern California Gas Co.underground storage field in the Los Angeles Basin continues tosimmer as the ongoing state investigation into SoCal’s potentialmisuse of the power of eminent domain goes forward with hearingsscheduled for October. All the facts may never surface publicly,and even if they do, it will take months of complicated regulatoryproceedings.

The case covers a past period of three to seven years, duringwhich SoCalGas declared it no longer needed a relatively smallunderground storage field in the southeast LA suburb of Montebelloand began preparing to sell the storage operations, which datedback to 1956 on leased parts of a depleted oil field.

Based on an independent consultant’s report, the CPUC consumerservices staff contends SoCalGas allegedly violated state rules bymisleading the regulators and may have misused its power of eminentdomain in recent years in its attempt to get 550 separatesurrounding property owners to sell their interests in the propertyto the utility.

Angry property owners have been calling a specially establishedtoll-free telephone hotline to comment on their part in the case toCPUC attorneys and staff members.

Although all of the past civil court proceedings have beencompleted, reportedly they involved as many as 220 of the propertyowners who refused SoCalGas’s attempts to buy their interests. Thegas utility took them to court, asserting its rights to eminentdomain, claiming they needed to own the storage field property tocontinue utility operations.

The consultant’s report alleges that at the same time SoCalGaswas attempting to sell the property and telling regulators andothers that the storage field was unnecessary for its operations.

A CPUC staff source says that many of the property ownerscalling in their comments are claiming they were never notified ofeither the chance to sell their interests or the court proceedingseeking eminent domain. Their first inkling that something waswrong was when the royalty checks stopped, according to the CPUCstaff source. “We’ve seen a pattern of what looks like abusivebehavior by SoCalGas,” the staff source said. “They first asked forsale of property in a letter to all of the property owners.

A second letter warned they’d take property throughcondemnation. People I talked to indicated they all feltthreatened. They all got phone calls from the gas company (inaddition to the letters) sort of pestering them.”

The state’s case will be filed Aug. 6; SoCalGas’ reply by Sept.13; and hearings begin Oct. 12, with dates scheduled through the22. With the potential to be embarrassing to the nation’s largestnatural gas distribution company, the case could be settled beforeit reaches the administration law hearing stage at the CaliforniaPublic Utilities Commission, although a CPUC consumer servicesstaff member working on the case indicated there is no activity asof July 1 in that regard.

“We have an open door policy about settlements,” the staffmember said.

“Certainly we will sit down and talk to people. If we can reacha fair and equitable settlement in the interest of judicialeconomy, that is what we would do.”

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