The cost of the Porter Ranch gas leak is closing in on $1 billion

The nation’s largest-ever natural gas leak has now cost Southern California Gas Company close to $1 billion. And that’s the tab before any legal damage awards or settlements.

The leak at the Aliso Canyon gas storage field started after a natural gas well broke open near Porter Ranch. Gas started leaking in October 2015.

It blew methane and other chemicals into the atmosphere for four months, leading to the evacuation of  some 8,000  households.

In its financial report for the first quarter of 2018, SoCal Gas disclosed Monday that it had spent $954 million on the blowout as of the end of March. The estimate includes the amount the company spent housing families away from Porter Ranch.

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It also includes what the company expects to spend making up for the environmental damage caused by greenhouse gases from some 109,000 metric tons of methane. The state Air Resources Board has told the company to fund programs to capture that amount of methane from places in California, like dairies.

Since the last report, released in February, the overall cost estimate of the blowout had gone up $41 million. 

The company says insurance should cover most of the cost. It reports that it has $1.2 to $1.4 billion worth of insurance coverage.

However, the gas disaster’s rising tab does not yet include legal awards or settlements, and those could be substantial.  SoCal Gas faces 381 lawsuits brought by 48,000 plaintiffs, the company said. Many are Porter Ranch residents and businesses that claim losses or injuries.

Attorney Paul Kiesel, who is coordinating the cases before a Los Angeles Superior Court judge, said the many cases are still in the process of gathering documents from clients and SoCal Gas Co.

If costs rise past what is covered by the gas company’s insurance, the state Public Utilities Commission would decide who will ultimately pay for it.  It could be shareholders of SoCal Gas, or the cost could be passed on to its six million customers.