Porter Ranch gas-leak expenses don't keep SoCalGas from almost doubling earnings

Despite the largest methane leak in U.S. history, Southe Califoia Gas Company’s fourth quarter eaings nearly doubled, the utility Friday during a conference call.

During last year’s fourth quarter, SoCalGas’ eaings increased 88 percent from a year earlier to $143 million, the company said.

The increase was “due primarily to the impact of seasonality on revenues, which added $48 million of eaings during the most recent quarter,” the company said in a statement.

For all of 2015, SoCalGas’ full-year eaings were $419 million, up from $332 million in 2014, due mainly to a lower effective tax rate, including a favorable resolution of prior years’ income-tax matters.

The leak at a well in the company’s Aliso Canyon storage facility above Porter Ranch was discovered on Oct. 23, 2015, and it pumped more that 100,000 tons of methane into the air before being sealed 111 days later, according to scientists at UC Davis.

RELATED STORY: Read a story about pollution from the Aliso Canyon storage facility.An estimated 15,000 residents voluntarily evacuated from the community at gas company expense. The utility gave residents up to $7,000 a month to live in hotels or rental housing.

Those in hotels and similar lodging initially had eight days to retu home after the state declared the well sealed on Feb. 18. But a judge on Thursday ruled that time line be extended to March 18.

The company is appealing that ruling.

The company said that, at one point, 6,400 households were in temporary housing and that costs associated are estimated to be $330 million, Debra L. Reed, chairman and CEO of SoCalGas’s parent company Sempra Energy during an conference call with analysts.

Most of the costs associated with relocating residents and reparing the leak will be covered by four insurance policies totaling more than $1 billion, she said.

“We are pleased SoCalGas was able to permanently stop the Aliso Canyon natural gas leak last week,” Reed said. “We recognize the disruption the leak has caused to SoCalGas customers living in the neighborhoods adjacent to the Aliso Canyon facility. SoCalGas is committed to helping local residents retu to their normal lives as quickly as possible and also will support forward-looking regulations to ensure the safety of natural gas storage operations going forward. “Despite this operational challenge at SoCalGas, we produced strong financial results in 2015. We successfully grew operating eaings and outperformed our adjusted eaings guidance for the year. Looking forward, our key capital projects and initiatives are progressing well, and we are executing our five-year financial plan, which we expect will generate eaings growth at about twice the utility industry average.”

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The well was declared sealed by the Califoia Department of Conservation on Feb. 18.

“There were 15 bcf (billion cubic feet) of gas in the field and it is stable,” Reed said.

Both Reed and SoCalGas president and CEO Deis Arriola said the that company is cooperating with the investigation now underway by the DOC’s Department of Oil, Gas & Geothermal Resources, the Califoia Public Utilities Commission and an independent third party, Blade Energy Partners.

The company is also inspecting the 115 wells in Aliso according to stringent guidelines issued by DOGGR.

It was unclear when the cause of the leak will finally be know or when the field could come back online.

“They are really driving the timeline,” Arriola said of the two agencies and Blade.

Sempra reported 2015 eaings of $1.35 billion, up from $1.16 billion a year earlier.

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