SoCalGas Launches New Fuel Card Program to Help Reduce Greenhouse Gas Emissions from Heavy-Duty Transportation Sector

Rhea-AI Summary

SoCalGas has launched a new Low Carbon Fuel Standard (LCFS) Fuel Card Incentive Program to support the transition to low- and zero-emissions vehicles in the heavy-duty transportation sector. The company is making $1.5 million available for 50 fuel cards worth $30,000 each. Companies purchasing qualifying Class 8 Heavy-Duty natural gas trucks between Sept. 9 and Dec. 8, 2024, can apply for these cards, with priority given to fleets with fewer than 10 vehicles.

This initiative aligns with California's carbon neutrality goals and aims to reduce greenhouse gas emissions and improve air quality. SoCalGas, which has already converted 38% of its over-the-road fleet to alternative fuel vehicles, plans to operate a 100% zero-emissions fleet by 2035. The fuel cards can be used at SoCalGas' 16 public access stations, which dispense 100% renewable natural gas (RNG).

Positive

• SoCalGas is investing $1.5 million in fuel card incentives to promote cleaner transportation
• The program offers $30,000 fuel cards to 50 qualifying heavy-duty natural gas truck purchases
• SoCalGas has converted 38% of its over-the-road fleet to alternative fuel vehicles
• The company aims to operate a 100% zero-emissions fleet by 2035
• SoCalGas received the Leading Private Fleet Award at the 2022 ACT Expo for sustainability efforts

Negative

• None.

Insights

Financial Analyst

SoCalGas's $1.5 million fuel card program is a strategic move to support California's environmental goals while potentially boosting their market position. By offering $30,000 fuel cards to 50 companies, they're incentivizing the adoption of low-emission vehicles in the heavy-duty sector. This initiative could lead to increased demand for SoCalGas's renewable natural gas (RNG) at their 16 public access stations, potentially driving up revenue. The program aligns with their sustainability goals, which could enhance their ESG profile and attract environmentally conscious investors. However, the financial impact may be in the short term due to the program's small scale. Investors should monitor the long-term effects on market share and revenue growth in the clean energy sector.

Environmental Policy Expert

This fuel card program exemplifies a market-based approach to emissions reduction, leveraging the Low Carbon Fuel Standard (LCFS) credits to incentivize cleaner transportation. It's a smart move by SoCalGas to accelerate the transition to low-emission vehicles in the heavy-duty sector, which is notoriously difficult to decarbonize. The focus on fleets with fewer than 10 vehicles targets a segment that often lacks resources for green transitions. While $1.5 million is a modest investment, it could catalyze significant emissions reductions if it spurs wider adoption of RNG in trucking. The program's alignment with CARB's Scoping Plan demonstrates SoCalGas's proactive stance in supporting state climate goals, potentially positioning them favorably for future policy developments.

Transportation Industry Analyst

SoCalGas's fuel card program addresses a critical barrier in the transition to cleaner heavy-duty vehicles: upfront costs. By offering $30,000 fuel cards, they're effectively reducing the total cost of ownership for new natural gas trucks. This could be particularly impactful for smaller fleets, which often operate on tighter margins. The program's timing aligns with increasing regulatory pressure on the trucking industry to reduce emissions, potentially accelerating the shift towards alternative fuels. However, the scale (50 fuel cards) may not be sufficient to drive widespread change. The program's success could hinge on its ability to demonstrate the viability of RNG in heavy-duty applications, potentially influencing future fleet purchasing decisions beyond the immediate beneficiaries.

LOS ANGELES, Sept. 9, 2024 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) announced today it will make $1.5 million available to provide funds for 50 fuel cards to help accelerate the transition to low- and zero-emissions vehicles in the heavy-duty transportation sector. For 90-days, starting today through Dec. 8, 2024, companies that purchase a qualifying vehicle can apply for a fuel card through SoCalGas' Low Carbon Fuel Standard (LCFS) Fuel Card Incentive Program. The $30,000 fuel card is designed to help support the transition to cleaner fuels in alignment with the California Air Resource Board (CARB) Scoping Plan for reaching carbon neutrality, by decreasing the demand for petroleum fuels to help reduce greenhouse gas emissions and improve air quality.

"As a company with approximately 5,000 light-, medium- and heavy-duty vehicles, as well as trailers and equipment, we understand the financial challenges that come with transitioning to a low- or zero-emissions fleet," said Jawaad Malik, chief strategy and sustainability officer at SoCalGas. "By implementing innovative incentives like these fuel cards, we can help provide commercial fleet owners with significant cost savings to encourage their transition to a cleaner fleet, which ultimately contributes to a healthier environment and a more sustainable and resilient economy for California."

Under the CARB LCFS program, SoCalGas receives credits for procuring low emissions fuels. The credits lower fuel prices at SoCalGas' 16 public access stations, which dispense 100% renewable natural gas (RNG). The creation of a fuel card incentive program is an additional way SoCalGas is giving credits back to customers in its service area to further support California's climate and clean air goals.

"We are excited that SoCalGas is offering this fuel card program that will provide significant savings for fleet operators," said Hal Meriwether, regional general manager for Rush Truck Centers in California. "As the nation's leading supplier of natural gas vehicles and consulting services, we are committed to helping customers make the best decisions for their business. This initiative makes the adoption of low- and zero-emission trucks more financially attractive for California fleets."

To participate in the SoCalGas LCFS Fuel Card Incentive Program applicants must purchase a Class 8 Heavy-Duty natural gas truck on or after the launch date of Sept. 9, 2024. Prioritization will be given to fleets with fewer than 10 vehicles. Selected applicants will receive a fuel card worth $30,000 that can be used at SoCalGas public access stations, while cards last.

"We appreciate the collaboration with SoCalGas and their commitment to supporting and growing the renewable natural gas market," said Mark Jamieson, business development director at Cummins Alternative Technologies. "We're grateful this program will encourage heavy-duty and line haul fleets to experience renewable natural gas with the new Cummins X15N and the emission reductions that it can deliver."

SoCalGas is a leader among utilities in its sustainability goals and was among the first and largest natural gas distribution utilities in the United States to announce its aim to achieve net-zero GHG emissions by 2045. As part of its ASPIRE 2045 sustainability strategy, SoCalGas has converted 38% of its over-the-road fleet¹ to alternative fuel vehicles (AFV) with an aim to reach 50% by 2025 and operate a 100% zero-emissions fleet by 2035². SoCalGas was also recognized with the Leading Private Fleet Award at the Advanced Clean Transportation (ACT) Expo in 2022 acknowledging the company's efforts to go above and beyond what is required to achieve sustainability in fleet operations.

The LCFS program was initially implemented in 2011 and is designed to encourage the use of cleaner low-carbon transportation fuels in California and the production of those fuels to reduce GHG emissions in the transportation sector. Learn more about SoCalGas' LCFS Fuel Card Incentive Program at socalgas.com/FuelCard.

About SoCalGas

SoCalGas is the largest gas distribution utility in the United States serving approximately 21 million consumers across approximately 24,000 square miles of Central and Southern California. SoCalGas' mission is to build the cleanest, safest, most innovative energy infrastructure company in America. SoCalGas aims to deliver affordable, reliable, and increasingly renewable gas service through its pipelines to help advance California's clean energy transition by supporting energy system reliability and resiliency and enabling the integration of renewable resources. SoCalGas is a recognized leader in its industry and community, as demonstrated by being named one of Reuters' Top 100 Innovators Leading the Global Energy Transition and Corporate Member of the Year by the Los Angeles Chamber of Commerce. SoCalGas is a subsidiary of Sempra (NYSE: SRE), a leading North American energy infrastructure company. For more information, visit SoCalGas.com/newsroom or connect with SoCalGas on social media @SoCalGas.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise.

In this press release, forward-looking statements can be identified by words such as "believe," "expect," "intend," "anticipate," "contemplate," "plan," "estimate," "project," "forecast," "envision," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "construct," "develop," "opportunity," "preliminary," "initiative," "target," "outlook," "optimistic," "poised," "positioned," "maintain," "continue," "progress," "advance," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: decisions, investigations, inquiries, regulations, denials or revocations of permits, consents, approvals or other authorizations, renewals of franchises, and other actions, including the failure to honor contracts and commitments, by the (i) California Public Utilities Commission (CPUC), U.S. Department of Energy, U.S. Internal Revenue Service and other regulatory bodies and (ii) U.S. and states, counties, cities and other jurisdictions therein where we do business; the success of business development efforts and construction projects, including risks related to (i) completing construction projects or other transactions on schedule and budget, (ii) realizing anticipated benefits from any of these efforts if completed, (iii) obtaining third-party consents and approvals and (iv) third parties honoring their contracts and commitments; macroeconomic trends or other factors that could change our capital expenditure plans and their potential impact on rate base or other growth; litigation, arbitration and other proceedings, and changes (i) to laws and regulations, including those related to tax and trade policy and (ii) due to the results of elections; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third parties with which we conduct business, including the energy grid or other energy infrastructure; the availability, uses, sufficiency, and cost of capital resources and our ability to borrow money on favorable terms and meet our obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, or (iii) rising interest rates and inflation; the impact on affordability of our customer rates and our cost of capital and on our ability to pass through higher costs to customers due to (i) volatility in inflation, interest rates and commodity prices and (ii) the cost of meeting the demand for lower carbon and reliable energy in California; the impact of climate policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms or insurance or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas and natural gas storage capacity, including disruptions caused by failures in the pipeline system or limitations on the withdrawal of natural gas from storage facilities; and other uncertainties, some of which are difficult to predict and beyond our control.

These risks and uncertainties are further discussed in the reports that the company has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on Sempra's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor Electric Delivery Company LLC (Oncor) and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, San Diego Gas & Electric Company or Southern California Gas Company, and Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC

¹ Over-the-road fleet refers to light-, medium-, and/or heavy-duty company fleet vehicles.
² Dependent on functional application and availability of vehicle products.

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SOURCE Southern California Gas Company

FAQ

What is SoCalGas' new LCFS Fuel Card Incentive Program?

SoCalGas' LCFS Fuel Card Incentive Program offers $30,000 fuel cards to companies purchasing qualifying Class 8 Heavy-Duty natural gas trucks between Sept. 9 and Dec. 8, 2024, to support the transition to low- and zero-emissions vehicles in the heavy-duty transportation sector.

How much is SoCalGas investing in the Fuel Card Incentive Program?

SoCalGas is investing $1.5 million to provide 50 fuel cards worth $30,000 each for the LCFS Fuel Card Incentive Program.

What are SoCalGas' goals for its own fleet transition to alternative fuel vehicles?

SoCalGas aims to convert 50% of its over-the-road fleet to alternative fuel vehicles by 2025 and operate a 100% zero-emissions fleet by 2035. Currently, 38% of its fleet has been converted to alternative fuel vehicles.

How does the LCFS Fuel Card Incentive Program support California's climate goals?

The program supports California's climate goals by encouraging the adoption of low- and zero-emissions vehicles in the heavy-duty transportation sector, which helps reduce greenhouse gas emissions and improve air quality in alignment with the state's carbon neutrality objectives.

What type of fuel is available at SoCalGas' public access stations for the fuel card program?

SoCalGas' 16 public access stations, where the fuel cards can be used, dispense 100% renewable natural gas (RNG).