SEMPRA ENERGY | Report on certain safety and environmental matters at SEMPRA ENERGY

Status
25.30% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
SRE
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Decent work
  • Public health
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Utilities
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders of Sempra urge the Board of Directors or its Safety, Sustainability and Technology Committee (the “Committee”) to
report to shareholders by the 2025 annual meeting, at reasonable cost and excluding proprietary and personal information, on the steps
Sempra has taken to reduce the risks of significant environmental hazards or life-threatening safety incidents involving the operations of
Sempra and its subsidiaries (collectively, the “Company”).
The report should describe the Board’s oversight of Company performance regarding environmental and safety risks and include an analysis of
the underlying causes of any significant environmental incidents endangering public safety or life-threatening safety incidents during the
preceding ten years.
Supporting statement
SUPPORTING STATEMENT: Safe operation of Sempra’s utilities is of great importance to shareholders, and yet the Company has experienced catastrophic incidents in
recent years endangering public safety and resulting in substantial damages and regulatory penalties.
In October 2015, for example, one of the wells at the Aliso Canyon gas storage field owned by Southern California Gas (“SoCalGas”) ruptured
due to corrosion of the well casing from groundwater contact. The ensuing leak emitted 109,000 metric tons of methane over four months and
caused nearly 20,000 people to evacuate from nearby homes until the Company was finally able to stop the leak.
Sempra estimates this leak has cost at least $3.5 billion as of 12/31/2022. Some of the legal and financial consequences so far include:
• A $1.8 billion settlement by Sempra resolving 390 lawsuits involving 36,000 plaintiffs;
• Over $200 million in penalties and other remedies in settlements with state and local regulators; and
• A SoCalGas criminal misdemeanor no-contest plea for failing to promptly report the leak to local authorities.
In 2019, an independent root cause analysis ordered by the California Public Utilities Commission (“CPUC”) concluded that SoCalGas never
conducted failure analyses for over 60 previous casing leaks at Aliso Canyon wells dating back to the 1970’s. The report also found the 2015
leak could have been successfully stopped as early as three weeks or even one day after the initial leak if SoCalGas had followed best industry
practices for gas leak top-kill operations.
The Board of Directors has not issued any report to shareholders confirming whether Sempra concurs with this independent analysis, or
alternatively whether the Company has performed or plans to perform its own analysis of underlying causes of the Aliso Canyon leak.
Regulators have also cited the Company for significant safety violations.
For example, the CPUC found in 2021 that SoCalGas failed to accurately determine the concentration and extent of migration of gas escaping
from a 2019 pipeline rupture caused by a homeowner’s contractor. The ensuing explosion caused one employee death, injuries to firefighters
and the general public, and widespread property damage.
We believe shareholders would benefit from a report by the Board or the Committee on the steps Sempra has taken to analyze the underlying
causes of these sorts of incidents and therefore to help reduce their risks of recurrence. We urge shareholders to vote FOR this proposal.

Filed by the Utility Workers Union of America (UWUA).

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