SETTLEMENT REACHED IN SEMPRA SUIT $1.88 BILLION DEAL U.S. RECORD.

Byline: Staff and Wire Services

A settlement was reached in a class-action suit alleging that Sempra Energy, Southern California Gas and San Diego Gas & Electric conspired to drive up natural gas prices, leading to the 2000-01 California energy crisis.

The $1.885 billion agreement, believed to be the largest antitrust class-action settlement of its kind in California and U.S. history, includes claims filed against Sempra by the cities of Los Angeles and Long Beach, both of which must still approve the deal.

San Diego Superior Court Judge Ronald Prager, who has been presiding over the trial in the case, told jurors Wednesday about the settlement.

In addition to Los Angeles and Long Beach, the settlement agreement includes 13 million to 14 million natural gas and electricity consumers and the state of Nevada. The deal is subject to approval by the judge and the Nevada District Court for Clark County.

Under the terms of the settlement, San Diego-based Sempra Energy and its two Southern California utilities denied any wrongdoing.

The judge will oversee the approval process for the settlement agreement and expected distribution of the proceeds.

On Oct. 30, Sempra - while denying any wrongdoing - settled with other plaintiffs, including Los Angeles County, Burbank, Culver City, Glendale, Upland, Vernon, San Bernardino County, Edgington Oil Co., Imperial Irrigation District, Worl Oil Corp., Demenno-Kerdoon and Lunday-Thaggard Co.

Trial in the case began Oct. 26.

``This agreement will put the major pieces of energy-crisis litigation behind us,'' said Stephen L. Baum, chairman of Sempra. ``Above and beyond the costs to our company, this settlement will provide substantial benefits to millions of energy consumers in California and Nevada.''

Plaintiffs in the case alleged that senior executives from El Paso Natural Gas Corp., Southern California Gas and San Diego Gas & Electric secretly agreed in 1996 to stop competing for natural gas, ultimately causing the energy crisis.

Houston-based El Paso, the largest natural gas pipeline company in the country, settled for $1.69 billion in December 2003.

The lead attorney for the plaintiffs, Pierce O'Donnell, commended Sempra for resolving the matter to the benefit of California consumers.

``We're pleased that the five-year battle is over,'' O'Donnell told reporters after the settlement was announced.

Sempra Energy said the settlement calls for paying $377 million over eight years to representatives of natural gas and electric utility ratepayers in California, the cities of Los Angeles and Long Beach and the attorney general of the state of Nevada.

Sempra also agreed to reduce by $300 million over six years the rates paid under a state power contract signed after the energy crisis, and promised to cut the price of gas provided to SoCal Gas and SDG&E from a liquefied natural gas terminal under construction in Baja California.