Oil report

CPUC to consider penalty on Sempra's SoCalGas unit for 2015 leak

June 27 (Reuters) - The California Public Utilities Commission (CPUC) said on Thursday it has opened an investigation to consider penalties against SoCalGas, a unit of Sempra Energy, for a massive, four-month-long gas leak near Los Angeles in 2015.

The CPUC said it has also opened an investigation against Sempra Energy to determine if it prioritizes safety in its organizational culture and governance.

The state regulator said a consultant will evaluate Sempra Energy’s culture, governance, policies, practices and accountability metrics to ensure that its California-regulated subsidiaries operate their systems in a safe manner.

SoCalGas is reviewing CPUC’s order, a company spokesman said.

“We look forward to supporting the commission’s review and welcome its recommendations.”

A probe report in mid-May - commissioned by state regulatory agencies CPUC and Division of Oil, Gas and Geothermal Resources, and conducted by a third party consultant Blade Energy - found that groundwater corroded a 7-inch well casing and made it to rupture, causing the leak.

According to the report, the company had failed to investigate and analyze dozens of leaks since the 1970s, the consequences of such corrosion were not understood, leading to the 2015 incident.

In 2015, the faulty well spewed more than 4 billion cubic feet of natural gas into the atmosphere until it was sealed 111 days later in February 2016. (Reporting by Aishwarya Nair in Bengaluru; editing by Gopakumar Warrier)