Southern California Gas Co. v. Public Utilities Comm’n of California

During a California Public Utilities Commission (PUC) regulatory proceeding involving efforts to decrease reliance on natural gas in southern California, regulators became aware that Southern California Gas Company (SoCalGas), a utility with state-regulated rates, had provided financial support to what was ostensibly an independent organization advocating for use of natural gas. Further investigation uncovered evidence that SoCalGas had allocated its advocacy expenditures to accounts charged to ratepayers in ratemaking proceedings, rather than accounts consisting of shareholder funds. Longstanding regulations, however, prohibit using ratepayer funds for political advocacy and for promoting consumption of natural gas.

The Public Advocates Office of the PUC therefore submitted data requests to SoCalGas requesting access to accounting records and other materials concerning such expenditures. SoCalGas resisted, claiming that disclosure would infringe its First Amendment associational rights. The PUC issued an order enforcing the Public Advocates’ requests, and SoCalGas filed a petition for review in the California Court of Appeal seeking to set aside the order.

Public Citizen, together with Consumer Watchdog, filed an amicus brief in the court of appeal arguing that, under the Supreme Court’s decision in Americans for Prosperity v. Bonta (2021), the First Amendment does not require strict scrutiny of the PUC’s requests for information and that the requests are narrowly tailored to fulfill California’s important interest in ensuring that ratepayers are not compelled to subsidize SoCalGas’s advocacy expenditures. The court of appeals, however, disagreed and ruled in favor of SoCalGas.