Twelve plaintiffs reach settlement with SRE in class-action lawsuit. (Sempra Energy Co.)

Roger Ziemer at Southern California Gas Company. | Sun Oct 30 11:08:50 2005 | Steve Baum

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We want to provide you with an update from our Chairman and Chief Executive Officer, Steve Baum, on the class-action lawsuit that began last week. Our employees have been made aware of this settlement as well.

Yesterday (Saturday, Oct. 29, 2005), we released a media statement to alert the public that Los Angeles County and 11 other plaintiffs in the class-action, anti-trust lawsuit against Sempra Energy, Southern California Gas Company and San Diego Gas & Electric agreed to settle for an undisclosed amount.

As you know, trial began last week on the lawsuit which stems from the energy crisis of 2000-2001. The plaintiffs' attorneys blame the company's California utilities and Sempra Energy for causing the energy crisis and are seeking $23 billion in damages.

The trial will continue despite the settlement with some of the plaintiffs.

You know that as we've prepared for this trial, we've also been in discussions to come to settlements. Why would we do that if we've done nothing wrong?

Because we take risk management very seriously. It is smart to try and settle - given the size of the award these trial attorneys are seeking combined with the uncertainties inherent in a jury trial.

None of our companies did anything wrong, and settlements do not change that reality.

Here is the statement:

SAN DIEGO, Oct. 29, 2005 -- Javade Chaudhri, executive vice president and general counsel of Sempra Energy, issued the following statement today regarding a settlement agreement by Sempra Energy, Southern California Gas Co. and San Diego Gas & Electric with the County of Los Angeles and 11 other individual plaintiffs in the Continental Forge case. Terms of the agreement were not disclosed.

"Our companies are pleased to have reached a mutually agreeable settlement for a fraction of these particular plaintiffs' claims. These individual plaintiffs were part of the consolidated case, but not part of the initial class of Ventura County natural gas customers and Southern California Edison customers currently being heard in San Diego Superior Court.

"The allegations involved in this case are simply false and, as part of this agreement, Sempra Energy and our affiliate companies expressly deny any wrongdoing."

The Continental Forge class-action trial began Oct. 24, 2005, and is expected to continue for three to five months. In addition to the County of Los Angeles, the plaintiffs included in this settlement are: the City of Burbank, City of Culver City, City of Glendale, City of Upland, City of Vernon, County of San Bernardino, Edgington Oil, Imperial Irrigation District, World Oil Corporation, Demenno-Kerdoon and Lunday-Thaggard Company.