What is the total financial impact of the partial settlement announced?

The partial settlement with 65 homeowner insurer plaintiffs is for approximately $686 million. This amount represents 57.5% of their aggregated paid and reserved claims totaling $1.19 billion. The entire settlement amount is covered by SDG&E's liability insurance.

What is Sempra Energy's (SDG&E's) estimated total exposure for the wildfire litigation?

SDG&E previously established a reserve of $900 million for its estimated liability to homeowners' insurers, which is fully covered by its $1.1 billion in liability insurance. However, the company has not yet established a reserve for other types of claims (such as uninsured properties, business interruption, or personal injuries) as it lacks sufficient information to reasonably estimate its potential exposure for these.

Will the wildfire lawsuits proceed as a class action?

No, the court ruled that the lawsuits cannot proceed as class actions on behalf of all persons who experienced wildfire damages. They must be pursued as individual lawsuits.

What is the timeline for resolving the remaining wildfire litigation?

The company anticipates that the wildfire litigation, including any appeals, could take several years to be fully resolved due to its complexity and the large number of parties and claims involved.

SRE/SREA 8-K SEC Disclosure

Summary

This 8-K filing by Sempra Energy (SRE) on June 26, 2009, provides a significant update on the partial settlement of wildfire litigation stemming from the 2007 catastrophic wildfires in San Diego County. The company, through its subsidiary San Diego Gas & Electric Company (SDG&E), announced an agreement with 65 homeowner insurer plaintiffs to settle a portion of the claims related to the Witch, Rice, and Guejito fires. This settlement, funded entirely by SDG&E's liability insurance, amounts to approximately $686 million and covers 57.5% of the insurers' paid and reserved claims totaling $1.19 billion. The filing also clarifies that the class action lawsuits filed by wildfire victims cannot proceed as class actions and must be handled as individual lawsuits. SDG&E has established a $900 million reserve for potential liability to homeowners' insurers, which is fully offset by its $1.1 billion liability insurance. While this partial settlement addresses a significant portion of homeowner claims, discussions are ongoing with other insurers, and SDG&E has not yet established a reserve for claims from other plaintiffs (e.g., uninsured structures, business interruption, personal injury) due to a lack of sufficient information to estimate potential exposure. The company expects the litigation, including appeals, to take several years to resolve.

Key Highlights

1Sempra Energy (SRE) subsidiary SDG&E reached a partial settlement of wildfire litigation from the 2007 San Diego County fires.
2The settlement is with 65 homeowner insurer plaintiffs for approximately $686 million, covering 57.5% of their $1.19 billion in claims.
3The settlement is fully funded by SDG&E's liability insurance coverage.
4Lawsuits related to wildfire damages cannot proceed as class actions and must be pursued individually.
5SDG&E had previously established a $900 million reserve for potential liability to homeowners' insurers, fully offset by insurance.
6Discussions with other homeowner insurers are ongoing on similar terms.
7No reserve has been established for other types of claims (e.g., uninsured properties, personal injury) due to estimation difficulties.

SEMPRA 8-K Report, Corporate Update (Jun 26, 2009)

Summary

Key Highlights

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