Sempra Energy has revealed a one-time $72 million charge for litigation related to the 2015-16 methane leak at the Southern California Gas Co. (SoCalGas) Aliso Canyon Storage Field.
The liability issues, briefly highlighted in the first quarter conference call, concern the 3,200-acre complex north of Los Angeles. Details were in the Securities and Exchange Commission Form 10-Q report filed by Sempra.
Longer-term liability was set at $1.4 billion for the nation’s largest methane leak, but does not include all legal or regulatory costs nor costs to defend lawsuits, according to the SEC filing. Up to $1.2 billion is covered by insurance, but cost estimates “may increase significantly as more information becomes available,” Sempra said.
Many costs have been paid, with $511 million recorded at the end of March for insurance payments, in addition to $766 million of insurance proceeds. In 1Q2020, SoCalGas contributed more than $300 million to Sempra’s earnings.
Aliso has been under tight restrictions on injections and withdrawals, and its future is being weighed by state regulators. As of the end of March, the 86 Bcf storage facility had a net book value of $771 million.
At the end of April, Sempra said there were 393 lawsuits involving 36,000 plaintiffs pending regarding the Aliso leak. All of the cases, except for one brought by the Los Angeles County District Attorney and federal securities class actions, have been consolidated in Los Angeles Superior Court.
As a result of a third-party analysis, SoCalGas has implemented corrective actions at the facility. The California Public Utilities Commission last year found 330 alleged violations by the utility.
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