SoCalGas Advances Towards Zero-Emissions Fleet with Delivery of New Ford Electric Vans

Rhea-AI Summary

Southern California Gas Co. (SoCalGas) has integrated 21 new Ford E-Transit electric vans into its fleet, marking a significant step toward its ASPIRE 2045 sustainability strategy. This move supports SoCalGas' target to replace 50% of its fleet with alternative fuel vehicles by 2025 and achieve a 100% zero-emissions fleet by 2035. As of the end of 2023, 38% of SoCalGas' fleet was powered by low- and zero-emission energy sources. The company is also collaborating with Ford and the Department of Energy to develop a hydrogen fuel cell F-550 prototype for real-world testing in 2025. To facilitate this transition, SoCalGas is expanding its EV charging infrastructure, aiming to install 1,500 chargers across 65 sites within the next two years. This effort highlights SoCalGas' leadership in sustainability among utilities, having previously received the Leading Private Fleet Award at the Advanced Clean Transportation Expo in 2022.

Positive

• SoCalGas added 21 new Ford E-Transit electric vans to its fleet, advancing its sustainability goals.
• The company aims to replace 50% of its fleet with alternative fuel vehicles by 2025.
• SoCalGas targets a 100% zero-emissions fleet by 2035.
• 38% of SoCalGas' fleet was powered by low- and zero-emissions sources as of the end of 2023.
• SoCalGas is collaborating with Ford and the DOE on a hydrogen fuel cell F-550 prototype for 2025 testing.
• The company is installing 1,500 EV chargers across 65 facility sites over the next two years.
• SoCalGas received the Leading Private Fleet Award at the Advanced Clean Transportation Expo in 2022.

Negative

• The current low- and zero-emissions vehicles only represent 38% of the total fleet, indicating more work is needed to achieve the 2025 and 2035 goals.
• The range of Ford's light-duty electric vans is to 126 miles, which may impact operational efficiency.

Insights

Environmental Policy Analyst

SoCalGas' integration of Ford E-Transit electric vans into its fleet marks a significant step towards achieving its 2045 zero-emissions goal. This move aligns well with California's broader climate objectives, which aim to significantly reduce greenhouse gas (GHG) emissions. By introducing these electric vans, SoCalGas is not only addressing air quality issues but also reducing its carbon footprint, which is critical for long-term environmental sustainability.

In the broader context, the deployment of these vans exemplifies a growing trend among utility companies to embrace cleaner technologies. This transition is essential for mitigating the environmental impacts of traditionally high-emission sectors like transportation. Notably, the company is also supporting this transition with the installation of 1,500 EV chargers, indicating a holistic approach to sustainability.

For investors, this initiative could signal improved regulatory compliance and potential future cost savings from decreased fuel and maintenance expenditures. However, it also requires significant upfront investment and infrastructure development, which could impact short-term financial performance.

Market Research Analyst

From a market perspective, SoCalGas' move to add electric vans can be seen as a strategic alignment with current sustainability trends. The market is increasingly valuing companies that adopt ESG (Environmental, Social, Governance) principles, which bodes well for SoCalGas' reputation and might positively influence its stock price. Additionally, the collaboration with Ford and the Department of Energy to develop a hydrogen fuel cell prototype indicates a forward-thinking approach to future-proofing their fleet against evolving regulatory standards and market demands.

It's important for investors to note that while such initiatives drive long-term value, they require measurable time to realize tangible financial benefits. The range of the E-Transit vans, up to 126 miles, fits well for local and regional service routes, which are critical for operational efficiency in a utility service area. Nonetheless, the integration of alternative fuel vehicles into the fleet may initially pose logistical and operational challenges, which the company needs to address effectively to realize the full benefits.

LOS ANGELES, June 13, 2024 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) added Ford E-Transit electric vans into its fleet, as part of its ASPIRE 2045 sustainability strategy, working towards its goals to replace 50% of its over-the-road fleet¹ with alternative fuel vehicles (AFV) by 2025 and operate a 100% zero-emissions fleet by 2035. The introduction of 21 new Ford E-Transit vans represents a milestone for SoCalGas as the first battery electric vehicles to be integrated into the company's fleet.

"The addition of Ford's E-Transit electric vans to our fleet represents a significant achievement in SoCalGas' advancement toward a zero-emissions future," said Sandra Hrna, vice president, supply chain and operations support at SoCalGas. "By investing in technologies powered by electricity, hydrogen or renewable natural gas, we are advancing our efforts to reduce greenhouse gas emissions (GHG) and accelerate decarbonization in a sector that has historically been a major contributor to GHG emissions."

At the close of 2023, 38% of SoCalGas' over-the-road fleet was powered by low- and zero-emissions energy sources. SoCalGas' current over-the-road fleet vehicles include 700 RNG Ford F-250 service pickup trucks and 50 Toyota Mirai hydrogen fuel cell electric vehicles (HFCEV).

"I applaud SoCalGas on its efforts to accelerate the transition of its truck fleet to zero-emissions," said Wayne Nastri, South Coast Air Quality Management District executive officer. "These trucks reduce smog-forming emissions making it easier for us to breathe and they also reduce greenhouse gas emissions thereby helping our climate."

SoCalGas aims to advance sustainable transportation solutions and actively collaborates with automakers to develop innovative low- and zero-emissions options to help support California's climate goals. SoCalGas and Ford are developing a hydrogen fuel cell F-550 prototype with the Department of Energy (DOE) and, in 2025, plan to demonstrate its performance in real world conditions in an effort to help reduce GHG and nitrogen oxide emissions in medium- and heavy-duty commercial vehicles. Ford's light-duty electric vans have a range of up to 126 miles and are being used by employees to service SoCalGas' industrial and commercial customers.

"E-Transit is a great solution for companies to reduce carbon emissions while lowering fleet costs associated with fuel and maintenance," said Ted Haladyna, Ford Pro director of product marketing. "When low- and zero-emission vehicles are supported with the right infrastructure it can be a win-win for business and the planet. Testing new technology with customers early in the development process, like we are doing with SoCalGas on F-550 Super Duty Hydrogen Fuel Cell Electric Truck, is another example of how our work together will bring the alternative fuel industry forward."

To support a zero-emissions fleet, SoCalGas is installing EV chargers throughout its territory powered almost exclusively by renewable electricity under Southern California Edison's Green Rate program. SoCalGas recently added EV charging stations at its Compton, Brea and Newberry Spring locations, with plans to extend the network to 1,500 chargers across 65 facility sites over the next two years.

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. SoCalGas was recognized with the Leading Private Fleet Award at the Advanced Clean Transportation Expo in 2022 acknowledging the company's efforts to go above and beyond what is required to achieve sustainability in fleet operations.

Learn more about SoCalGas's sustainability efforts at socalgas.com/sustainability.

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 statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to 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," "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: California wildfires, including potential liability for damages regardless of fault and any inability to recover all or a substantial portion of costs from insurance, the wildfire fund established by California Assembly Bill 1054, rates from customers or a combination thereof; 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), Comisión Reguladora de Energía, U.S. Department of Energy, U.S. Federal Energy Regulatory Commission, Public Utility Commission of Texas, U.S. Internal Revenue Service and other regulatory bodies and (ii) U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries where we do business; the success of business development efforts, construction projects, acquisitions, divestitures, and other significant transactions, including risks related to (i) being able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, (iv) obtaining third-party consents and approvals, and (v) 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, arbitrations, property disputes and other proceedings, and changes to laws and regulations, including those related to tax and trade policy and the energy industry in Mexico; 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 or otherwise raise capital 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 San Diego Gas & Electric Company's (SDG&E) and Southern California Gas Company's (SoCalGas) customer rates and their cost of capital and on SDG&E's, SoCalGas' and Sempra Infrastructure's ability to pass through higher costs to customers due to (i) volatility in inflation, interest rates and commodity prices, (ii) with respect to SDG&E's and SoCalGas' businesses, the cost of meeting the demand for lower carbon and reliable energy in California, and (iii) with respect to Sempra Infrastructure's business, volatility in foreign currency exchange rates; the impact of climate and sustainability policies, laws, rules, regulations, disclosures and trends, 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 relevant emerging and early-stage 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 electric power, natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, pipeline system or limitations on the withdrawal of natural gas from storage facilities; Oncor Electric Delivery Company LLC's (Oncor) ability to reduce or eliminate its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor's independent directors or a minority member director; 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 Sempra 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 and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

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1} Over-the-road fleet refers to light-, medium-, and/or heavy-duty company fleet vehicles.

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SOURCE Southern California Gas Co.

FAQ

What are the new additions to SoCalGas' fleet?

SoCalGas has added 21 new Ford E-Transit electric vans to its fleet.

What is SoCalGas' ASPIRE 2045 sustainability strategy?

The ASPIRE 2045 strategy aims to replace 50% of SoCalGas' fleet with alternative fuel vehicles by 2025 and achieve a 100% zero-emissions fleet by 2035.

What percentage of SoCalGas' fleet is currently powered by low- and zero-emission sources?

As of the end of 2023, 38% of SoCalGas' fleet was powered by low- and zero-emission energy sources.

What collaborative projects is SoCalGas involved in?

SoCalGas is working with Ford and the Department of Energy on a hydrogen fuel cell F-550 prototype, with real-world testing planned for 2025.

How is SoCalGas expanding its EV charging infrastructure?

SoCalGas plans to install 1,500 EV chargers across 65 facility sites over the next two years.

What recognition has SoCalGas received for its sustainability efforts?

SoCalGas received the Leading Private Fleet Award at the Advanced Clean Transportation Expo in 2022.