Three months after it was announced in the first days of the new year, Sempra Energy’s estimated $1.7 billion class action court settlement continues to be opposed vigorously by the California attorney general and rival investor-owned utilities (IOU) in the state. Attorney General Bill Lockyer’s office will be filing preliminary objections next week (April 13).

“The Sempra settlement is still hanging fire,” said Tom Dresslar, a spokesperson for the state Attorney General’s Office. “We’re representing the citizens and the California Department of Water Resources (DWR), and I am sure Edison and the other IOUs will be filing objections.”

Lockyer did not participate in the class action lawsuit that convened in a jury trial last fall, ending with a proposed settlement announced in early January (see Daily, Jan. 5). Within a week of the settlement, the Attorney General and other joint parties filed objections with the court, some of which were modified by the court, although Dresslar thinks the heart of the state’s objections remain intact.

These objections did not directly address the settlement itself but merely how it was being publicly conveyed, and the $1.7 billion value placed on it by Sempra and the settlement parties. In the April 13 court filing, Lockyer’s office will challenge the deal, per se, Dresslar said.

The plaintiffs’ and Sempra’s $1.7 billion estimate is based on the settlement’s requirements for the energy company to pay $325 million over eight years to the plaintiffs; reduce the cost of its DWR power supply contract by $300 million; save consumers $74 million in future gas costs; change delivery points for the DWR supplies for a $270 million savings; and make internal changes in its two major utilities — Southern California Gas Co. and San Diego Gas and Electric Co. — that are estimated to be worth $745 million.

The state, led by Lockyer, filed last January, and will repeat next week, that the proposed settlement allegedly “provides nothing approaching $1.7 billion in value to ratepayers.” In fact, they argued earlier the settlement doesn’t even provide the $325 million in cash payments over eight annual installments because various attorneys fees and payments related to pursuing the class action will be deducted from that total.

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