SoCalGas Petitions CPUC to Update Hydrogen Blending Demonstration Requirements Based on Global Safety History and Research

Rhea-AI Summary

Southern California Gas (SRE) and two other utilities petitioned the California Public Utilities Commission on Feb 4, 2026 to remove the CPUC requirement that utilities complete a 5% hydrogen blending demonstration before recommending a systemwide blending standard.

The petition cites new global research and operational data showing low‑level blends up to 5% are safe, while the CPUC's 5%–20% demonstration requirement would remain in place. SoCalGas notes one of its proposed demonstrations (the 5% project) would not be completed if the petition is approved.

Positive

• Petition aims to save ratepayers time and money
• Cites expanded global research supporting <5% blend safety
• SoCalGas has decade-long hydrogen blending operational experience

Negative

• If approved, SoCalGas' proposed 5% demonstration would not proceed
• Petition creates regulatory change risk and potential procedure delays

Key Figures

Hydrogen blend demo level: 5% Systemwide blend proposal range: 5%–20% Low-level blend threshold: 5% +4 more

7 metrics

Hydrogen blend demo level 5% Original CPUC-ordered demonstration project blend into natural gas

Systemwide blend proposal range 5%–20% CPUC-required demonstrations for medium pressure distribution systems

Low-level blend threshold 5% Utilities cite global data supporting safe blending up to this level

Hawai'i Gas hydrogen share 15% Hydrogen portion of fuel mix reportedly used for over a half-century

Higher blend studies 20% Studies showing blends can safely power regular appliances

SoCalGas UCI project year 2016 First power-to-gas hydrogen blending project at UC Irvine

H2 Innovation blend level 20% Hydrogen blend used in the [H2] Innovation Experience microgrid and home

Market Reality Check

Price: $87.00 Vol: Volume 5,621,342 is 25% a...

normal vol

$87.00 Last Close

Volume Volume 5,621,342 is 25% above the 20-day average of 4,499,441. normal

Technical Price $87.00 is trading 4.0% above the 200-day MA of $83.64 and 9.11% below the 52-week high.

Peers on Argus

SRE gained 0.9% with above-average volume while peers were mixed: AES +2.29%, AV...

SRE gained 0.9% with above-average volume while peers were mixed: AES +2.29%, AVA +1.98%, AQN +0.31%, BIP flat, ALE -0.10%. Moves do not indicate a unified sector rotation.

Historical Context

5 past events · Latest: Jan 21 (Negative)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 21	Litigation response	Negative	-0.3%	SoCalGas response to cross-claims in Eaton wildfire-related litigation.
Jan 15	Industry recognition	Positive	+0.3%	Unisys named Leader in NelsonHall ADWS NEAT assessment for sixth year.
Dec 02	Reliability award	Positive	-0.2%	SDG&E honored as most reliable Western utility for 20th straight year.
Nov 24	Culture award	Positive	-1.5%	Sempra recognized by Forbes among 'America's Best Employers for Company Culture'.
Nov 18	Dividend declaration	Neutral	-0.7%	SoCalGas declared regular quarterly preferred dividends payable January 15, 2026.

Pattern Detected

Recent SRE-related headlines, even when positive (awards, culture, dividends), often saw flat-to-negative next-day moves, suggesting muted price responses to company news.

Recent Company History

Over the past few months, Sempra and its utilities have issued varied news, including a SoCalGas litigation statement on Jan 21, 2026, SDG&E’s 20th consecutive reliability award on Dec 2, 2025, a Forbes culture recognition on Nov 24, 2025, and preferred dividends declared on Nov 18, 2025. Price reactions ranged from about -1.53% to +0.27%, generally modest. Today’s hydrogen blending petition aligns with this pattern of regulatory and reputational developments rather than major financial inflections.

Market Pulse Summary

This announcement centers on SoCalGas and peer utilities asking the CPUC to skip a 5% hydrogen blend...

Analysis

This announcement centers on SoCalGas and peer utilities asking the CPUC to skip a 5% hydrogen blending demonstration step based on newer global safety and operational data, while maintaining studies in the 5%–20% range. It underscores a long-term decarbonization strategy using existing gas infrastructure, building on projects dating back to 2016. Investors may watch how the CPUC responds, the fate of SoCalGas’s proposed 5% project, and any future updates on higher-blend demonstrations.

Key Terms

california public utilities commission, microgrid

2 terms

california public utilities commission regulatory

"submitted a petition to the California Public Utilities Commission (CPUC) to modify"

The California Public Utilities Commission (CPUC) is the state agency that sets rates, enforces safety and service standards, and approves major projects for investor-owned utilities like electric, gas and telecommunications companies in California. Its decisions are like a referee’s calls for utilities—shaping how much companies can charge, what investments they can make, and how costs are allocated—so commission rulings directly affect utility revenues, profits, and investment risk for shareholders.

microgrid technical

"North America's first-ever clean renewable hydrogen powered microgrid and home"

A microgrid is a small, local electricity system that combines power sources (like solar panels, small generators) and storage (batteries) with controls so it can run either connected to the main utility grid or on its own during outages. For investors, microgrids matter because they reduce outage risk, can lower energy costs, enable new revenue streams (selling excess power or grid services), and reflect growing demand for resilient, decentralized energy infrastructure.

AI-generated analysis. Not financial advice.

LOS ANGELES, Feb. 4, 2026 /PRNewswire/ -- Southern California Gas Co. (SoCalGas), along with San Diego Gas & Electric Company and Southwest Gas Corporation, on Tuesday submitted a petition to the California Public Utilities Commission (CPUC) to modify a 2022 decision ordering the California investor-owned gas utilities (IOUs) to develop a demonstration project blending up to 5% hydrogen into natural gas prior to recommending a systemwide clean renewable hydrogen injection standard for medium pressure distribution systems.

Because the safety case for low‑level blends has been advanced since the CPUC's order, the utilities are asking the agency to remove the requirement to develop the 5% demonstration projects before recommending a systemwide blending standard. The petition does not change the CPUC's requirement for utilities to develop demonstration projects studying blends in the 5%–20% range, which remain an important part of California's long‑term decarbonization planning.

Since 2022, a significant body of new research, operational data, and real‑world experience has emerged. Utilities in America – including in California – and around the world have already demonstrated that blending up to 5% hydrogen into existing natural gas systems can be done safely, reliably, and without modifying customer appliances.

"Building off what we've learned collectively over the past few years, the CPUC has an opportunity to save ratepayers both money and time as we work to help California scale hydrogen production and decrease carbon emissions," said SoCalGas Vice President of Gas Engineering and System Integrity Amy Kitson. "Hydrogen blending is already being used here in the U.S. and around the world every day to power people's homes and businesses, which has shown us that mixing up to 5% hydrogen can be done safely in medium pressure natural gas systems." 

"Blending up to 5% hydrogen is a practical, forward-looking step toward decarbonizing our natural gas system," said Sen. Bob Archuleta (D-Pico Rivera). "It leverages existing infrastructure to reduce emissions today while planning for a cleaner energy future."

"We should not delay this important step toward making our entire energy system more sustainable and clean," said Jack Brouwer, UCI professor of mechanical and aerospace engineering and director of the UCI-based National Fuel Cell Research Center. "All objective analyses of the energy transition show that use of both the gas and electric systems are required to achieve sustainability, reliability, and lowest cost goals.  Beginning to evaluate the sustainable transformation of the gas system with clean hydrogen blending is important to meet sustainability and cost goals."

Hydrogen blending is the practice of mixing hydrogen with natural gas, which the State of California has said could help decarbonize its energy grid. In response to the CPUC's 2022 decision, the state's investor-owned utilities have proposed five hydrogen blending demonstration projects as the state considers a systemwide hydrogen blending standard. SoCalGas currently has proposed two of these hydrogen blending demonstration projects, one of which is designed to blend up to 5% hydrogen and thus would not be completed if the CPUC approves the pending petition for modification.

Research, real-world projects demonstrate hydrogen blending effectiveness

Advancements over the past four years, supported by research and real‑world demonstrations in the U.S. and other countries, show that low-level hydrogen blends do not harm pipelines and appliances, or impact system safety, enabling the use of existing infrastructure without modification. States like Utah, which have already completed similar demonstration projects, have shown that blending up to 5% hydrogen with natural gas can be done safely and doesn't require any changes to customers' appliances. In addition, Hawai'i Gas has safely been using up to 15% hydrogen in its fuel mix with regular, everyday appliances for more than a half-century, allowing a less carbon intensive fuel mix to power homes and businesses.

Several studies have also shown that blends of up to 20% hydrogen can safely power regular everyday household and business appliances, while reducing carbon emissions and potentially even reducing nitrous oxide (NO_x) emissions.

SoCalGas has been successfully demonstrating the use of hydrogen blending for more than a decade, having completed the first-ever power-to-gas hydrogen blending project in the United States in 2016 at UC Irvine to help power the campus. Since then, the company has also completed a number of demonstration projects, including the development and operation of the [H2] Innovation Experience, North America's first-ever clean renewable hydrogen powered microgrid and home which uses hydrogen blends up to 20% to power its off-the-shelf appliances.

For more information about SoCalGas' blending proposals, visit https://www.socalgas.com/h2blending.

About SoCalGas

SoCalGas is the largest gas distribution utility in the United States, serving more than 21 million consumers across approximately 24,000 square miles of Central and Southern California. Our mission is: Safe, Reliable, and Affordable energy delivery today. Ready for tomorrow. SoCalGas is a recognized leader in the energy industry and has been named Corporate Member of the Year by the Los Angeles Chamber of Commerce for its volunteer leadership in the communities it serves. 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 please 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," "pro forma," "strategic," "initiative," "target," "outlook," "optimistic," "poised," "positioned," "maintain," "continue," "progress," "advance," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategies, goals, vision, mission, 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, denials of cost recovery, audits, investigations, inquiries, ordered studies, 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, as applicable, (i) negotiating pricing and other terms in definitive contracts, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, (iv) obtaining regulatory and other approvals and (v) third parties honoring their contracts and commitments; changes to our capital expenditure plans and their potential impact on rate base or other growth; changes, due to evolving economic, political and other factors, to (i) trade and other foreign policy, including the imposition of tariffs by the U.S. and foreign countries, and (ii) laws and regulations, including those related to tax; litigation, arbitration, property disputes and other proceedings; 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, which can be affected by, among other things, (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, and (iii) fluctuating 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 the imposition of tariffs 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 and transportation capacity, including disruptions caused by failures in the pipeline and storage systems or limitations on the injection and 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, nor are they regulated by the CPUC.

Message funded by shareholders

 

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SOURCE Southern California Gas Company

FAQ

What did SRE petition the CPUC to change on Feb 4, 2026?

They asked the CPUC to remove the prior requirement to develop a 5% hydrogen blending demonstration before recommending a systemwide standard. According to the company, new research and operational data support reviewing that requirement now.

How would the SRE petition affect SoCalGas' planned 5% blending project?

Approval of the petition would mean SoCalGas' proposed 5% demonstration project would not be completed as planned. According to the company, that project is one of the five statewide demonstrations tied to the CPUC order.

Does the petition change requirements for 5%–20% hydrogen demonstrations for SRE?

No. The petition does not alter the CPUC requirement to conduct demonstrations studying blends in the 5%–20% range. According to the company, those higher-range demonstrations remain important for long-term planning.

What evidence does SRE cite to justify allowing up to 5% hydrogen blends now?

SRE cites four years of new research, operational data, and international demonstrations indicating up to 5% blends are safe for pipelines and appliances. According to the company, real-world projects showed no safety or appliance impacts.

What is the investor impact of SRE seeking to remove the 5% demo requirement?

The petition could reduce short-term demonstration costs and speed policy decisions, potentially lowering near-term project spending. According to the company, this step aims to save ratepayers money and accelerate hydrogen scaling.