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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999
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OR
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
to
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SEMPRA ENERGY
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-14201 33-0732627
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.)
101 ASH STREET, SAN DIEGO, CALIFORNIA 92101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619)696-2000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
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Common Stock, Without Par Value New York and Pacific
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [ ]
Exhibit Index on page 33. Glossary on page 41.
Aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 23, 2000 was $3.4 billion.
Registrant's common stock outstanding as of March 23, 2000 was
204,220,661 shares.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the 1999 Annual Report to Shareholders are incorporated
by reference into Parts I, II, and IV.
Portions of the Proxy Statement prepared for the May 2000 annual
meeting of shareholders are incorporated by reference into Part
III.
TABLE OF CONTENTS
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . .21
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . .22
Item 4. Submission of Matters to a Vote of Security Holders. .22
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . .22
Item 6. Selected Financial Data. . . . . . . . . . . . . . . .23
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . .24
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk . . . . . . . . . . . . . . . . .24
Item 8. Financial Statements and Supplementary Data. . . . . .24
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . .24
PART III
Item 10. Directors and Executive Officers of the Registrant . .25
Item 11. Executive Compensation . . . . . . . . . . . . . . . .26
Item 12. Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . .26
Item 13. Certain Relationships and Related Transactions . . . .26
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . .27
Independent Auditors' Consent and Report on Schedule. . . . . .29
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .32
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . .33
Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . .41
This report contains statements that are not historical fact and
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The words
"estimates," "believes," "expects," "anticipates," "plans"
"intends," "may" and "should" or similar expressions, or
discussions of strategy or of plans are intended to identify
forward-looking statements that involve risks, uncertainties and
assumptions. Future results may differ materially from those
expressed in these forward-looking statements.
These statements are necessarily based upon various assumptions
involving judgments with respect to the future and other risks,
including, among others, local, regional, national and
international economic, competitive, political and regulatory
conditions and developments; technological developments; capital
market conditions; inflation rates; interest rates; exchange rates;
energy markets, including the timing and extent of changes in
commodity prices; weather conditions; business and regulatory or
legal decisions; the pace of deregulation of retail natural gas and
electricity delivery; the timing and success of business
development efforts; and other uncertainties -- all of which are
difficult to predict and many of which are beyond the control of
the Company. Readers are cautioned not to rely unduly on any
forward-looking statements and are urged to review and consider
carefully the risks, uncertainties and other factors which affect
the Company's business described in this annual report and other
reports filed by the Company from time to time with the Securities
and Exchange Commission.
PART I
ITEM 1. BUSINESS
Description of Business
A description of Sempra Energy and its subsidiaries (the Company)
is given in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
GOVERNMENT REGULATION
The most significant government regulation affecting Sempra Energy
is that affecting its utility subsidiaries, which is discussed
below. Other subsidiaries are also subject to governmental
regulation.
Local Regulation
Southern California Gas Company (SoCalGas) has gas franchises with
the 236 legal jurisdictions in its service territory. These
franchises allow SoCalGas to locate facilities for the transmission
and distribution of natural gas in the streets and other public
places. Most of the franchises do not have fixed terms and continue
indefinitely. The range of expiration dates for the franchises with
definite terms is 2003 to 2041.
San Diego Gas and Electric (SDG&E) has separate electric and gas
franchises with the two counties and the 25 cities in its service
territory. These franchises allow SDG&E to locate facilities for
the transmission and distribution of electricity and/or natural gas
in the streets and other public places. The franchises do not have
fixed terms, except for the electric and natural gas franchises
with the cities of Chula Vista (2003), Encinitas (2012), San Diego
(2021) and Coronado (2028); and the natural gas franchises with the
city of Escondido (2036) and the county of San Diego (2030).
California Utility Regulation
The California Public Utilities Commission (CPUC) regulates SDG&E's
and SoCalGas' rates and conditions of service, sales of securities,
rate of return, rates of depreciation, uniform systems of accounts,
examination of records, and long-term resource procurement. The
CPUC also conducts various reviews of utility performance and
conducts investigations into various matters, such as deregulation,
competition and the environment, to determine its future policies.
The California Energy Commission (CEC) has discretion over
electric-demand forecasts for the state and for specific service
territories. Based upon these forecasts, the CEC determines the
need for additional energy sources and for conservation programs.
The CEC sponsors alternative-energy research and development
projects, promotes energy conservation programs, and maintains a
state-wide plan of action in case of energy shortages. In addition,
the CEC certifies power-plant sites and related facilities within
California.
United States Utility Regulation
The Federal Energy Regulatory Commission (FERC) regulates the
interstate sale and transportation of natural gas, regulates the
transmission and wholesale sales of electricity in interstate
commerce, transmission access, the uniform systems of accounts,
rates of depreciation and electric rates involving sales for
resale.
The Nuclear Regulatory Commission (NRC) oversees the licensing,
construction and operation of nuclear facilities. NRC regulations
require extensive review of the safety, radiological and
environmental aspects of these facilities. Periodically, the NRC
requires that newly developed data and techniques be used to re-
analyze the design of a nuclear power plant and, as a result,
requires plant modifications as a condition of continued operation
in some cases.
International Utility Regulation
The Company's consolidated and unconsolidated affiliates have
locations in Argentina, Canada, Chile, Mexico, Peru and Uruguay.
These operations are subject to the local, federal and other
regulations of the countries in which they are located.
Licenses and Permits
SoCalGas and SDG&E obtain a number of permits, authorizations and
licenses in connection with the transmission and distribution of
natural gas. They require periodic renewal, which results in
continuing regulation by the granting agency. In addition, SDG&E
obtains a number of permits, authorizations and licenses in
connection with the transmission and distribution of electricity.
Other regulatory matters are described throughout this report.
SOURCES OF REVENUE
Industry segment information is contained in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and in Note 15 of the notes to Consolidated Financial
Statements of the 1999 Annual Report to Shareholders, which is
incorporated by reference.
NATURAL GAS OPERATIONS
The Company purchases, sells, distributes, stores and transports
natural gas. SDG&E supplies natural gas to its customers (including
transport to electric generating plants) in San Diego and southern
Orange counties, comprising a 4,100-square-mile service territory.
SoCalGas owns and operates a natural gas distribution, transmission
and storage system that supplies natural gas to its customers
(including transport to electric generating plants) throughout a
23,000-square-mile service territory from central California to the
Mexican border. On a smaller scale, Sempra Energy International
(SEI) operates natural gas distribution systems in Mexico through
60 percent, 95 percent and 100 percent ownership of DGN-Mexicali,
DGN-Chihuahua and DGN-La Laguna, respectively. The operations of
SoCalGas, SDG&E and SEI's operations in Mexico are included in the
following discussion of the Company's natural gas operations. SEI
also has interests in natural gas operations in South America which
are not consolidated and, therefore, are not included in these
discussions. Additional information on international operations is
provided in "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
Supplies of Natural Gas
The Company buys natural gas under several short-term and long-term
contracts. Short-term purchases are based on monthly spot-market
prices. SoCalGas has firm pipeline capacity contracts with pipeline
companies that expire at various dates through 2006. SDG&E has
long-term capacity contracts with interstate pipelines which expire
at various dates between 2007 and 2023.
Most of the natural gas purchased and delivered by the Company is
produced outside of California. These supplies are delivered to the
Company's intrastate transmission system by interstate pipeline
companies, primarily El Paso Natural Gas Company and Transwestern
Natural Gas Company. These interstate companies provide
transportation services for supplies purchased from other sources
by the Company or its transportation customers. The rates that
interstate pipeline companies may charge for natural gas and
transportation services are regulated by the FERC. Existing
pipeline capacity into California exceeds current demand by over 1
billion cubic feet (bcf) per day. The implications of this excess
are described in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
The following table shows the sources of natural gas deliveries
from 1995 through 1999.
Year Ended December 31
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1999 1998 1997 1996 1995
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Natural Gas Purchases: (billions of cubic feet)
Spot market 390 388 330 323 296
Long-term contracts 76 104 100 108 128
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Total Purchases 466 492 430 431 424
Customer-owned and
exchange receipts 574 521 514 422 531
Storage withdrawal
(injection) - net (6) (28) (3) 42 (13)
Company use and
unaccounted for (16) (23) (11) (11) (5)
------- ------- ------- ------- -------
Net Deliveries 1,018 962 930 884 937
======= ======= ======= ======= =======
Natural Gas Purchases: (millions of dollars)
Commodity costs $1,084 $1,092 $1,160 $ 879 $ 666
Fixed charges* 147 174 250 276 264
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Total Purchases $1,231 $1,266 $1,410 $1,155 $ 930
======= ======= ======= ======= =======
Average Commodity Cost of Purchases
(Dollars per Thousand Cubic Feet) $ 2.33 $ 2.22 $ 2.69 $ 2.04 $ 1.57
======= ======= ======= ======= =======
* Fixed charges primarily include pipeline demand charges, take or pay settlement costs,
and other direct-billed amounts allocated over the quantities delivered by the
interstate pipelines serving SoCalGas and SDG&E.
Market-sensitive natural gas supplies (supplies purchased on the
spot market as well as under longer-term contracts, ranging from
one month to ten years, based on spot prices) accounted for 91
percent of total natural gas volumes purchased by the Company
during 1999, as compared with 79 percent and 77 percent during 1998
and 1997, respectively. These supplies were generally purchased at
prices significantly below those of long-term, fixed-price sources
of supply.
During 1999, the Company, including its Mexico operations,
delivered 1,018 bcf of natural gas through its system.
Approximately 56 percent of these deliveries were customer-owned
natural gas for which the Company provided transportation services.
The balance of natural gas deliveries was gas purchased by the
Company and resold to customers. The Company estimates that
sufficient natural gas supplies will be available to meet the
requirements of its customers for the next several years.
Customers
For regulatory purposes, customers are separated into core and
noncore customers. Core customers are primarily residential and
small commercial and industrial customers, without alternative fuel
capability. Noncore customers consist primarily of utility electric
generation (UEG), wholesale, large commercial, industrial and off-
system (outside the Company's normal service territory) customers.
Of the 5.7 million customer meters in the Company's service
territory, only 1,700 serve the noncore market.
Most core customers purchase natural gas directly from the Company.
Core customers are permitted to aggregate their natural gas
requirement and, up to a limit of 10 percent of the Company's core
market, to purchase natural gas directly from brokers or producers.
The Company continues to be obligated to purchase reliable supplies
of natural gas to serve the requirements of its core customers.
Noncore customers have the option of purchasing natural gas either
from the Company or from other sources, such as brokers or
producers, for delivery through the Company's transmission and
distribution system. The only natural gas supplies that the Company
may offer for sale to noncore customers are the same supplies that
it purchases for its core customers. Most noncore customers procure
their own natural gas supply.
In 1999 for SoCalGas, 87 percent of the CPUC-authorized natural gas
margin was allocated to the core customers, with 13 percent
allocated to the noncore customers. In 1999 for SDG&E, 90 percent
of the CPUC-authorized natural gas margin was allocated to the core
customers, with 10 percent allocated to the noncore customers.
Although revenues from transportation throughput is less than for
natural gas sales, the Company generally earns the same margin
whether the Company buys the gas and sells it to the customer or
transports natural gas already owned by the customer.
The Company also provides natural gas storage services for noncore
and off-system customers on a bid and negotiated contract basis.
The storage service program provides opportunities for customers to
store natural gas on an "as available" basis, usually during the
summer to reduce winter purchases when natural gas costs are
generally higher. As of December 31, 1999, the Company was storing
approximately 22 bcf of customer-owned gas.
Demand for Natural Gas
Natural gas is a principal energy source for residential,
commercial, industrial and UEG customers. Natural gas competes with
electricity for residential and commercial cooking, water heating,
space heating and clothes drying, and with other fuels for large
industrial, commercial and UEG uses. Growth in the natural-gas
markets is largely dependent upon the health and expansion of the
southern California economy. Excluding customer meters in Mexico of
approximately 20,000, the Company added approximately 101,000 and
58,000 new customer meters in 1999 and 1998, respectively,
representing growth rates of 1.5 percent and 1.0 percent,
respectively. The Company expects its growth rate for 2000 to be at
the 1999 level.
During 1999, 99 percent of residential energy customers in
SoCalGas' service area used natural gas for water heating, 96
percent for space heating, 76 percent for cooking and 55 percent
for clothes drying. In SDG&E's service area, 91 percent of
residential energy customers used natural gas for water heating, 73
percent for space heating, 52 percent for cooking and 35 percent
for clothes drying.
Demand for natural gas by noncore customers is very sensitive to
the price of competing fuels. Although the number of noncore
customers in 1999 was only 1,700, they accounted for approximately
13 percent of the authorized natural gas revenues and 57 percent
of total natural gas volumes. External factors such as weather,
electric deregulation, the use of hydro-electric power, competing
pipeline bypass and general economic conditions can result in
significant shifts in this market. The demand for natural gas by
large UEG customers is also greatly affected by the price and
availability of electric power generated in other areas and
purchased by the Company's UEG customers. Natural gas demand in
1999 for UEG customer use increased primarily due to higher
electric energy usage in the summer, as a result of warmer
weather. UEG customer demand decreased in 1998 as a result of
decreased demand for electricity.
Effective March 31, 1998, electric industry restructuring gave
California consumers the option of selecting their electric energy
provider from a variety of local and out-of-state producers. As a
result, natural gas demand for electric generation within southern
California competes with electric power generated throughout the
western United States. Although electric industry restructuring has
no direct impact on the Company's natural gas operations, future
volumes of natural gas transported for UEG customers may be
adversely affected to the extent that regulatory changes divert
electricity from the Company's service area.
Other
Additional information concerning customer demand and other aspects
of natural gas operations is provided under "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and in Notes 13 and 14 of the notes to Consolidated
Financial Statements of the 1999 Annual Report to Shareholders,
which is incorporated by reference.
ELECTRIC OPERATIONS
Resource Planning
In September 1996, California enacted a law restructuring
California's electric utility industry. The legislation adopts the
December 1995 CPUC policy decision restructuring the industry to
stimulate competition and reduce rates. As mentioned briefly above,
beginning on March 31, 1998, customers were given the opportunity
to choose to continue to purchase their electricity from the local
utility under regulated tariffs, to enter into contracts with other
energy service providers (direct access) or to buy their power from
the independent Power Exchange (PX) that serves as a wholesale
power pool allowing all energy producers to participate
competitively.
Additional information concerning electric-industry restructuring
is provided in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in Notes 13 and 14 of the
notes to Consolidated Financial Statements of the 1999 Annual
Report to Shareholders, which is incorporated by reference.
Electric Resources
In connection with California's electric-industry restructuring,
beginning March 31, 1998, the California investor-owned utilities
(IOUs) are obligated to bid their power supply, including owned
generation and purchased-power contracts, into the PX. The IOUs
also are obligated to purchase from the PX the power that they
sell. An Independent System Operator (ISO) schedules power
transactions and access to the transmission system. In 1999, SDG&E
completed divestiture of its owned generation other than nuclear.
SDG&E continues to have purchased-power contracts, which it bids
into the PX. Based on generating plants in service and purchased-
power contracts currently in place, at February 29, 2000 the
megawatts (mw) of electric power available to SDG&E to bid into the
PX are as follows:
Source Mw
--------------------------------------------------
Nuclear generating plants 430*
Long-term contracts with other utilities 175
Contracts with others 493
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Total 1,098
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* Net of plants' internal usage
Natural Gas/Oil Generating Plants: In connection with electric-
industry restructuring, in December 1998, SDG&E entered into
agreements for the sale of its South Bay and Encina power plants
and 17 combustion turbines. During the quarter ended June 30, 1999,
these sales were completed for total net proceeds of $466 million.
The South Bay Power Plant sale to the San Diego Unified Port
District for $110 million was completed on April 23, 1999. Duke
South Bay, a subsidiary of Duke Energy Power Services, will manage
the plant for the Port District. The sale of Encina Power Plant and
17 combustion-turbine generators to Dynegy Inc. and NRG Energy Inc.
for $356 million was completed on May 21, 1999. SDG&E will operate
and maintain both facilities for the new owners for the next two
years.
San Onofre Nuclear Generating Station (SONGS): SDG&E owns 20
percent of the three nuclear units at SONGS (located south of San
Clemente, California). The cities of Riverside and Anaheim own a
total of 5 percent of Units 2 and 3. Southern California Edison
(Edison) owns the remaining interests and operates the units.
Unit 1 was removed from service in November 1992 when the CPUC
issued a decision to permanently shut down the unit. At that time
SDG&E began the recovery of its remaining capital investment, with
full recovery completed in April 1996. The unit's spent nuclear
fuel has been removed from the reactor and stored on-site. In March
1993, the NRC issued a Possession-Only License for Unit 1, and the
unit was placed in a long-term storage condition in May 1994. In
June 1999, the CPUC granted authority to begin decommissioning Unit
1. That work is now in progress.
Units 2 and 3 began commercial operation in August 1983 and April
1984, respectively. SDG&E's share of the capacity is 214 mw of Unit
2 and 216 mw of Unit 3.
During 1999 SDG&E spent $10 million on capital modifications and
additions and expects to spend $6 million in 2000. SDG&E deposits
funds in an external trust to provide for the future dismantling
and decontamination of the units.
Additional Information: Additional information concerning the SONGS
units, nuclear decommissioning and industry restructuring
(including SDG&E's divestiture of its electric generation assets)
is provided below and in "Environmental Matters" and "Electric
Properties" herein, and in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in Notes 6, 13
and 14 of the notes to Consolidated Financial Statements of the
1999 Annual Report to Shareholders, which is incorporated by
reference.
Purchased Power: The following table lists contracts with the
various suppliers:
Expiration Megawatt
Supplier Date Commitment Source
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Long-Term Contracts with Other Utilities:
Portland General
Electric (PGE) December 2013 75 Coal
Public Service
Company of
New Mexico (PNM) April 2001 100 System supply
-----
Total 175
=====
Other Contracts:
PacifiCorp December 2001 100 System Supply
Avista Supply December 2001 150 System Supply
Applied Energy December 2019 102 Cogeneration
Yuma Cogeneration June 2024 50 Cogeneration
Goal Line Limited
Partnership December 2025 50 Cogeneration
Other (89) Various 41 Cogeneration
------
Total 493
======
Under the contracts with PGE and PNM, SDG&E pays a capacity charge
plus a charge based on the amount of energy received. Charges under
these contracts are based on the selling utility's costs, including
a return on and depreciation of the utility's rate base (or lease
payments in cases where the utility does not own the property),
fuel expenses, operating and maintenance expenses, transmission
expenses, administrative and general expenses, and state and local
taxes. Charges under contracts from PacifiCorp and Avista are for
firm energy only and are based on the amount of energy received.
The prices under these contracts are at the market value at the
time the contracts were negotiated. Costs under the remaining
contracts (all with Qualifying Facilities) are based on SDG&E's
avoided cost.
Additional information concerning SDG&E's purchased-power contracts
is described below, and in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 13 of the
notes to Consolidated Financial Statements of the 1999 Annual
Report to Shareholders, which is incorporated by reference.
Power Pools
SDG&E is a participant in the Western Systems Power Pool (WSPP),
which includes an electric-power and transmission-rate agreement
with utilities and power agencies located throughout the United
States and Canada. More than 200 investor-owned and municipal
utilities, state and federal power agencies, energy brokers, and
power marketers share power and information in order to increase
efficiency and competition in the bulk power market. Participants
are able to target and coordinate delivery of cost-effective
sources of power from outside their service territories through a
centralized exchange of information.
Transmission Arrangements
Pacific Intertie: The Pacific Intertie, consisting of AC and DC
transmission lines, connects the Northwest with SDG&E, Pacific Gas
& Electric (PG&E), Edison and others under an agreement that
expires in July 2007. SDG&E's share of the intertie was 266 mw.
Southwest Powerlink: SDG&E's 500-kilovolt Southwest Powerlink
transmission line, which is shared with Arizona Public Service
Company and Imperial Irrigation District, extends from Palo Verde,
Arizona to San Diego. SDG&E's share of the line is 931 mw, although
it can be less, depending on specific system conditions.
Mexico Interconnection: Mexico's Baja California Norte system is
connected to SDG&E's system via two 230-kilovolt interconnections
with firm capability of 408 mw.
Due to electric-industry restructuring (see "Transmission Access"
below), the operating rights of SDG&E on these lines have been
transferred to the ISO.
Transmission Access
As a result of the enactment of the National Energy Policy Act of
1992, the FERC has established rules to implement the Act's
transmission-access provisions. These rules specify FERC-required
procedures for others' requests for transmission service. In
October 1997 the FERC approved the transfer of control by the
California IOUs of their transmission facilities to the ISO.
Beginning on March 31, 1998 the ISO is responsible for the
operation and control of the transmission lines. Additional
information regarding the ISO and transmission access is provided
below and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
Fuel and Purchased-Power Costs
The following table shows the percentage of each electric-fuel
source used by SDG&E and compares the costs of the fuels with each
other and with the total cost of purchased power:
Percent of Kwhr Cents per Kwhr
- -------------------------------------------------------------------
1999 1998 1997 1999 1998 1997
----- ----- ----- ---- ---- ----
Natural gas 6.5% 17.3% 19.8% 3.0 3.0 3.3
Nuclear fuel 12.6 11.5 11.8 0.5 0.6 0.6
Fuel oil 0.1 2.4
----- ----- -----
Total generation 19.1 28.8 31.7
Purchased power
and ISO/PX 80.9 71.2 68.3 3.7 3.5 2.8
----- ----- -----
Total 100.0% 100.0% 100.0%
====== ====== ======
As described previously, SDG&E sold its South Bay and Encina power
plants and 17 combustion turbines during the quarter ended June 30,
1999. Since the primary fuel source of these plants is natural gas,
the percentage of Kwhr for natural gas in the above table decreased
compared to 1998.
The cost of purchased power includes capacity costs as well as the
costs of fuel. The cost of natural gas includes transportation
costs. The costs of natural gas, nuclear fuel and fuel oil do not
include SDG&E's capacity costs. While fuel costs are significantly
less for nuclear units than for other units, capacity costs are
higher.
Electric Fuel Supply
Natural Gas: Information concerning natural gas is provided in
"Natural Gas Operations" herein.
Nuclear Fuel: The nuclear-fuel cycle includes services performed by
others under contract through 2003, including mining and milling of
uranium concentrate, conversion of uranium concentrate to uranium
hexafluoride, enrichment services and enriched uranium
hexafluoride, and fabrication of fuel assemblies.
Spent fuel is being stored at SONGS, where storage capacity will be
adequate at least through 2005. If necessary, modifications in
fuel-storage technology can be implemented to provide on-site
storage capacity for operation through 2013, the expiration date of
the NRC operating license. The plan of the U.S. Department of
Energy (DOE) is to provide a permanent storage site for the spent
nuclear fuel by 2010.
Pursuant to the Nuclear Waste Policy Act of 1982, SDG&E entered
into a contract with the DOE for spent-fuel disposal. Under the
agreement, the DOE is responsible for the ultimate disposal of
spent fuel. SDG&E is paying a disposal fee of $0.90 per megawatt-
hour of net nuclear generation. Disposal fees average $3 million
per year.
To the extent not currently provided by contract, the availability
and the cost of the various components of the nuclear-fuel cycle
for SDG&E's nuclear facilities cannot be estimated at this time.
Additional information concerning nuclear-fuel costs is provided in
Note 13 of the notes to consolidated financial statements of the
1999 Annual Report to Shareholders, which is incorporated by
reference.
INTERNATIONAL OPERATIONS
Sempra Energy International (SEI) develops, operates and invests in
energy infrastructure projects, including natural gas distribution
systems and power generation facilities, outside of the United
States. SEI has interests in natural gas and/or electric
transmission and distribution projects in Argentina, Canada, Chile,
Mexico, Peru and Uruguay and is pursuing other projects in Latin
America.
In June 1999, SEI and Public Service Enterprise Group (PSEG)
announced the completion of the joint purchase of 90 percent of
Chilquinta Energia S.A. (Energia). In January 2000, SEI and PSEG
purchased an additional 9.75 percent of Energia, increasing their
total holdings to 99.98 percent. In September 1999, SEI and PSEG
completed their acquisition of 47.5 percent of the outstanding
shares of Luz del Sur S.A., a Peruvian Electric Company. This
acquisition, combined with the 37 percent already owned through
Energia, increased the companies' total joint ownership to 84.5
percent of Luz del Sur S.A.
In March 1998, Pacific Enterprises (PE) increased its existing
investment in two Argentine natural gas utility holding companies
(Sodigas Pampeana S.A. and Sodigas Sur S.A.) by purchasing an
additional 9-percent interest for $40 million. With this purchase,
PE's interest in the holding companies was increased to 21.5
percent. In June, 1999, the Company contributed capital to Sodigas
Pampeana S.A. and Sodigas Sur S.A. to retire $32 million of debt
outstanding. These natural gas distribution companies serve 1.2
million customers in central and southern Argentina, respectively,
and have a combined throughput of 650 million cubic feet per day.
SEI owns 60 percent of Distribuidora de Gas Natural de Mexicali, S.
de R.L. de C.V. (DGN-Mexicali), a Mexican company that holds the
first license awarded to a private company to build a natural gas
distribution system in Mexico. On August 20, 1997, DGN-Mexicali
began to deliver natural gas to customers in Mexicali, Baja
California. It will invest up to $25 million to provide service to
25,000 customers during the first five years of operation, of which
one-third has been spent as of December 31, 1999.
SEI owns 95 percent of Distribuidora de Gas Natural de Chihuahua,
S. de R.L. de C.V. (DGN-Chihuahua), which distributes natural gas
to the city of Chihuahua, Mexico and surrounding areas. On July 9,
1997, it acquired ownership of a 16-mile transmission pipeline
serving 20 industrial customers. It will invest nearly $50 million
to provide service to 50,000 customers in the first five years of
operation, of which one-half has been spent as of December 31,
1999.
In May 1999 SEI was awarded a 30-year license to build and operate
a natural gas distribution system in the La Laguna-Durango zone in
north-central Mexico. SEI will invest over $40 million in the
project during the first five years of operation.
In August 1998, SEI was awarded a 10-year agreement by the Mexican
Federal Electric Commission to provide natural gas for the
Presidente Juarez power plant in Rosarito, Baja California. The
contract provides for delivery of up to 300 million cubic feet per
day of natural gas transportation services in the United States and
construction of a 23-mile pipeline from the U.S.-Mexico border to
the plant. Construction of the pipeline is anticipated to be
completed by mid-2000 at a cost of $35 million. The pipeline will
also serve as a link for a natural gas distribution system in
Tijuana, Baja California, between San Diego and Rosarito.
In May 1998, PE was awarded a concession by the government of
Uruguay to build a natural gas and propane distribution system to
serve most of the country, excluding Montevideo. SEI is in
discussions with the Uruguayan government in regard to the terms of
the concession agreement.
Net income for international operations in 1999 was $10 million
compared to net losses of $4 million and $9 million for 1998 and
1997, respectively.
Additional information on international operations is provided in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in Note 3 of the notes to Consolidated
Financial Statements of the 1999 Annual Report to Shareholders,
which is incorporated by reference.
SEMPRA ENERGY TRADING (SET)
SET, a leading natural gas and power marketing firm headquartered
in Stamford, Connecticut, was acquired on December 31, 1997. In
July 1998, SET purchased a wholesale trading and commercial
marketing subsidiary of Consolidated Natural Gas to expand its
operation in the eastern United States. During 1999, SET commenced
its European operations, opening offices in Dusseldorf, Oslo and
London.
SET derives a substantial portion of its revenue from market making
and trading activities, as a principal, in natural gas, petroleum
and electricity. It quotes bid and offer prices to end users and
other market makers. It also earns trading profits as a dealer by
structuring and executing transactions that permit its
counterparties to manage their risk profiles. In addition, it takes
positions in energy markets based on the expectation of future
market conditions. For the year ended December 31, 1999, SET had
operating revenues of $450 million and net income of $19 million.
Additional information on SET is provided in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and in Notes 3, 10 and 15 of the notes to Consolidated
Financial Statements of the 1999 Annual Report to Shareholders,
which is incorporated by reference.
RATES AND REGULATION
The Company's principal subsidiaries, SoCalGas and SDG&E, are
regulated by the CPUC. The CPUC consists of five commissioners
appointed by the Governor of California for staggered six-year
terms. It is the responsibility of the CPUC to determine that
utilities operate within the best interests of their customers. The
regulatory structure is complex and has a substantial impact on the
profitability of the Company. Both the electric and natural gas
industries are currently undergoing transitions to competition.
Electric Industry Restructuring
In September 1996, California enacted a law restructuring its
electric utility industry. The legislation adopts the December 1995
CPUC policy decision restructuring the industry to stimulate
competition and reduce rates. Additional information on electric-
industry restructuring is provided in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and in
Note 14 of the notes to Consolidated Financial Statements of the
1999 Annual Report to Shareholders, which is incorporated by
reference.
Natural Gas Industry Restructuring
The natural gas industry experienced an initial phase of
restructuring during the 1980s by deregulating natural gas sales to
noncore customers. In January 1998, the CPUC released a staff
report initiating a project to assess the current market and
regulatory framework for California's natural gas industry.
Additional information on natural gas industry restructuring is
provided in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in Note 14 of the notes to
Consolidated Financial Statements of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
Balancing Accounts
In general, earnings fluctuations from changes in the costs of
natural gas and consumption levels for the majority of natural gas
are eliminated by balancing accounts authorized by the CPUC. As a
result of California's electric restructuring law, overcollections
recorded in the electric balancing accounts were applied to
transition cost recovery, and fluctuations in certain costs and
consumption levels now can affect earnings from electric
operations. Additional information on balancing accounts is
provided in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in Note 2 of the notes to
Consolidated Financial Statements of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
Performance-Based Regulation (PBR)
To promote efficient operations and improved productivity and to
move away from reasonableness reviews and disallowances, the CPUC
has been directing utilities to use PBR. PBR has replaced the
general rate case and certain other regulatory proceedings for both
SoCalGas and SDG&E. Additional information on PBR is provided in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in Note 14 of the notes to Consolidated
Financial Statements of the 1999 Annual Report to Shareholders,
which is incorporated by reference.
Biennial Cost Allocation Proceeding (BCAP)
Rates to recover the changes in the cost of natural gas
transportation services are determined in the BCAP. The BCAP
adjusts rates to reflect variances in customer demand from
estimates previously used in establishing customer natural gas
transportation rates. The mechanism substantially eliminates the
effect on income of variances in market demand and natural gas
transportation costs and, for SoCalGas, is subject to the
limitations of the Gas Cost Incentive Mechanism (GCIM) provided
below. The BCAP will continue under PBR. Additional information on
the BCAP is provided in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and in Note 14 of
the notes to Consolidated Financial Statements of the 1999 Annual
Report to Shareholders, which is incorporated by reference.
Gas Cost Incentive Mechanism (GCIM)
The GCIM is a process SoCalGas uses to evaluate its natural-gas
purchases, substantially replacing the previous process of
reasonableness reviews. Additional information on the GCIM is
provided in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and in Note 14 of the notes to
Consolidated Financial Statements of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
Affiliate Transactions
In December 1997, the CPUC adopted rules establishing uniform
standards of conduct governing the manner in which California IOUs
conduct business with their affiliates. Information on affiliate
transactions is provided in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and in Note 14 of
the notes to Consolidated Financial Statements of the 1999 Annual
Report to Shareholders, which is incorporated by reference.
Cost of Capital
Under PBR, annual Cost of Capital proceedings have been replaced by
an automatic adjustment mechanism if changes in certain indices
exceed established tolerances. Additional information on the
utilities' cost of capital is provided in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and
in Note 14 of the notes to Consolidated Financial Statements of the
1999 Annual Report to Shareholders, which is incorporated by
reference.
ENVIRONMENTAL MATTERS
Discussions about environmental issues affecting the Company are
included in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of the 1999 Annual Report to
Shareholders, which is incorporated by reference. The following
additional information should be read in conjunction with those
discussions.
Hazardous Substances
In 1994, the CPUC approved the Hazardous Waste Collaborative
balancing account, a mechanism that allows SoCalGas, SDG&E and
other utilities to recover in rates the costs associated with the
cleanup of sites contaminated with hazardous waste. In general,
utilities are allowed to recover 90 percent of their cleanup costs
and any related costs of litigation. In early 1998, the CPUC
modified this mechanism to exclude these costs related to electric
generation activities. These costs are now eligible for inclusion
in the Competition Transition Cost (CTC) recovery process,
discussed in Note 14 of the notes to Consolidated Financial
Statements of the 1999 Annual Report to Shareholders, which is
incorporated by reference.
During the early 1900s, SDG&E, SoCalGas and their predecessors
manufactured gas from coal or oil. The manufacturing sites often
have become contaminated with the hazardous residual by-products of
the process. SDG&E has identified three former manufactured-gas
plant sites. One site has received a site-closure letter and an
environmental assessment has been conducted at the other two sites.
At December 31, 1999 estimated remaining remediation liability on
these two sites is $3 million. In addition, SoCalGas has identified
42 former manufactured-gas plant sites at which it (together with
other users as to 21 of these sites) may have cleanup obligations.
As of December 31, 1999, 13 of these sites have been remediated, of
which 10 have received certification from the California
Environmental Protection Agency. Preliminary investigations, at a
minimum, have been completed on 39 of the sites. At December 31,
1999, SoCalGas' estimated remaining investigation and remediation
liability for all of these sites is $64 million.
Station B, located in downtown San Diego, was operated as a steam
and electric generating facility between 1911 and June 1993.
Activities to dismantle and decommission the facility required the
removal of asbestos and lead-based paint, and the removal or
cleanup of other substances. These activities were completed in
1999 at a cost of $6 million. The sale of Station B was completed
in December 1999.
SDG&E sold the South Bay and Encina power plants and 17 combustion
turbines in 1999. SDG&E conducted a thorough environmental
assessment of the power plants and combustion turbine sites.
Pursuant to the sale agreements, SDG&E and the buyers have
apportioned responsibility for remediation obligations for
contamination existing on these sites. Estimated costs to perform
the necessary remediation at all sites are approximately $10
million. Together with other appropriate costs, these costs were
offset against the sales price for the facilities and the remaining
net proceeds were offset against SDG&E's other transition costs.
The Company and other subsidiaries have been named as potentially
responsible parties (PRPs) in relation to two landfills and four
industrial waste disposal sites as described below.
Remedial actions and negotiations with other PRPs and the United
States Environmental Protection Agency (EPA) have been in progress
since 1986 and 1993 for the two landfill sites. The Company's share
of costs to remediate these sites is estimated to be approximately
$3.7 million, of which $1.2 million was incurred during 1999.
In the early 1990s, the Company was notified of two industrial
waste treatment facilities. A feasibility study and remedial
investigation have been submitted and accepted by the EPA for one
of these sites. Total estimated remediation cost for both
facilities is $420,000.
The Company and 10 other entities have been named PRPs by the
Department of Toxic Substance Control (DTSC) as liable for any
required corrective action regarding contamination at an industrial
waste disposal site in Pico Rivera, California. DTSC has taken this
action because SDG&E and others sold used transformers to the
site's owner. SDG&E and the other PRPs have entered into a cost-
sharing agreement to provide funding for the implementation of a
consent order between DTSC and the site owner for the development
of a cleanup plan. SDG&E's interim share under the agreement is
10.1%, subject to adjustment based on the ultimate responsibility
allocations. The estimate for the development of the cleanup plan
and the actual cleanup is $3 million to $9 million.
In December 1999, SoCalGas was notified that it is a PRP at the
Gibson Oil waste treatment facility in Bakersfield, California.
SoCalGas is working with other PRPs in order to remove from the
site certain liquid wastes that threaten to be released. It is too
early to determine the existence or extent of any prior releases or
the Company's potential total liability.
At December 31, 1999, the Company's estimated remaining
investigation and remediation liability related to hazardous waste
sites, including the manufactured gas sites, was $70 million, of
which 90 percent is authorized to be recovered through the
Hazardous Waste Collaborative mechanism. This estimated cost
excludes remediation cost associated with the sale of the electric-
generation plants and the 17 combustion turbines. The Company
believes that any costs not ultimately recovered through rates,
insurance or other means, will not have a material adverse effect
on the Company's consolidated results of operations or financial
position.
Estimated liabilities for environmental remediation are recorded
when amounts are probable and estimable. Amounts authorized to be
recovered in rates under the Hazardous Waste Collaborative
mechanism are recorded as a regulatory asset.
Electric and Magnetic Fields (EMFs)
Although scientists continue to research the possibility that
exposure to EMFs causes adverse health effects, science has not
demonstrated a cause-and-effect relationship between adverse health
effects and exposure to the type of EMFs emitted by power lines and
other electrical facilities. Some laboratory studies suggest that
such exposure creates biological effects, but those effects have
not been shown to be harmful. The studies that have most concerned
the public are epidemiological studies, some of which have reported
a weak correlation between childhood leukemia and the proximity of
homes to certain power lines and equipment. Other epidemiological
studies found no correlation between estimated exposure and any
disease. Scientists cannot explain why some studies using estimates
of past exposure report correlations between estimated EMF levels
and disease, while others do not.
To respond to public concerns, the CPUC has directed California
utilities to adopt a low-cost EMF-reduction policy that requires
reasonable design changes to achieve noticeable reduction of EMF
levels that are anticipated from new projects. However, consistent
with the major scientific reviews of the available research
literature, the CPUC has indicated that no health risk has been
identified.
Air and Water Quality
California's air quality standards are more restrictive than
federal standards. However, as a result of the sale of the
Company's fossil-fuel power plants and combustion turbines, the
Company's primary air-quality issue, compliance with these
standards is less significant.
The transmission and distribution of natural gas require the
operation of compressor stations, which are subject to increasingly
stringent air-quality standards. Costs to comply with these
standards are recovered in rates.
In connection with the issuance of operating permits, SDG&E and the
other owners of SONGS reached agreement with the California Coastal
Commission to mitigate the environmental damage to the marine
environment attributed to the cooling-water discharge from SONGS
Units 2 and 3. This mitigation program includes an enhanced fish-
protection system, a 150-acre artificial reef and restoration of
150 acres of coastal wetlands. In addition, the owners must deposit
$3.6 million with the state for the enhancement of fish hatchery
programs and pay for monitoring and oversight of the mitigation
projects. SDG&E's share of the cost is estimated to be $24 million.
The pricing structure contained in the CPUC's decision regarding
accelerated recovery of SONGS Units 2 and 3 is expected to
accommodate these added mitigation costs.
OTHER MATTERS
Year 2000
There were only a few, very minor Year 2000 interruptions to the
Company's automated systems and applications, suppliers and
customers. The Company incurred expenses of $48 million (including
$7.6 million in 1999) for its Year 2000 readiness effort and
expects to incur no additional costs.
Research, Development and Demonstration (RD&D)
The SoCalGas RD&D portfolio is focused in five major areas:
Operations, Utilization Systems, Power Generation, Public Interest
and Transportation. Each of these activities provides benefits to
customers and society by providing more cost-effective, efficient
natural gas equipment with lower emissions, increased safety and
reduced environmental mitigation and other utility operating costs.
The CPUC has authorized SoCalGas to recover its operating cost
associated with RD&D. SoCalGas' annual RD&D costs have averaged
$9.1 million over the past three years.
As a result of electric-industry restructuring, SDG&E has
significantly reduced its electric RD&D program. For 1999, the CPUC
authorized SDG&E to fund $1.2 million and $4 million in its natural
gas and electric RD&D programs, respectively, which includes $3.9
million to the CEC's electric public purpose RD&D program. SDG&E's
annual RD&D costs have averaged $4.7 million over the past three
years.
Employees of Registrant
As of December 31, 1999 the Company had 11,248 employees, compared
to 11,148 at December 31, 1998.
Wages
SoCalGas and SDG&E employ over 9,000 persons. At SoCalGas, field,
technical and most clerical employees are represented by the
Utility Workers' Union of America or the International Chemical
Workers' Council. The collective bargaining agreement on wages,
hours and working conditions remains in effect through March 31,
2000. Negotiations for a new agreement are ongoing. Employees at
SDG&E are represented by the Local 465 International Brotherhood of
Electrical Workers with two labor agreements. The generation
contract runs through February 28, 2001 and the transmission and
distribution contract runs through August 31, 2001.
ITEM 2. PROPERTIES
Electric Properties
The Company's generating capacity is described in "Electric
Resources" herein.
The Company's electric transmission and distribution facilities
include substations, and overhead and underground lines.
Periodically various areas of the service territory require
expansion to handle customer growth.
Natural Gas Properties
At December 31, 1999, the Company owned approximately 3,021 miles
of transmission and storage pipeline, 51,566 miles of distribution
pipeline and 50,002 miles of service piping. It also owned 12
transmission compressor stations and 6 underground storage
reservoirs (with a combined working capacity of approximately 117.8
Bcf).
Other Properties
The 21-story corporate headquarters building at 101 Ash Street, San
Diego, is occupied pursuant to a capital lease through the year
2005. The lease has four separate five-year renewal options.
SoCalGas has a 15-percent limited partnership interest in a 52-
story office building in downtown Los Angeles. SoCalGas leases
approximately half of the building through the year 2011. The lease
has six separate five-year renewal options.
SDG&E occupies an office complex at Century Park Court in San Diego
pursuant to an operating lease ending in the year 2007. The lease
can be renewed for two five-year periods.
The Company owns or leases other offices, operating and maintenance
centers, shops, service facilities, and equipment necessary in the
conduct of business.
ITEM 3. LEGAL PROCEEDINGS
Neither Sempra Energy nor its subsidiaries are party to, nor is
their property the subject of, any material pending legal
proceedings other than routine litigation incidental to their
businesses.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Common stock of Sempra Energy is traded on the New York and Pacific
stock exchanges. At March 23, 2000 there were approximately 80,000
holders of record of the Company's common stock. The quarterly
common stock information, including high and low sales prices and
dividend declarations, required by Item 5 is included in the
schedule of Quarterly Financial Data of the 1999 Annual Report to
Shareholders, which is incorporated by reference.
Dividend Restrictions
At December 31, 1999, $863 million of the Company's retained
earnings was available for future dividends due to the CPUC's
regulation of the utilities' capital structure. Additional
information is provided in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" of the 1999
Annual Report to Shareholders, which is incorporated by reference.
ITEM 6. SELECTED FINANCIAL DATA
At December 31, or for the years then ended
------------------------------------------------
(Dollars in millions) 1999 1998 1997 1996 1995
-------- ------- ------- ------- -------
Income Statement Data:
Revenues and other income $ 5,435 $ 5,015 $ 5,115 $ 4,524 $ 4,201
Operating income $ 802 $ 629 $ 927 $ 927 $ 886
Net income $ 394 $ 294 $ 432 $ 427 $ 401
Balance Sheet Data:
Total assets $11,270 $10,456 $10,756 $ 9,762 $ 9,837
Long-term debt $ 2,902 $ 2,795 $ 3,175 $ 2,704 $ 2,721
Short-term debt (a) $ 337 $ 373 $ 624 $ 481 $ 485
Shareholders' equity $ 2,986 $ 2,913 $ 2,959 $ 2,930 $ 2,815
Per Common Share Data
Net income
Basic $ 1.66 $ 1.24 $ 1.83 $ 1.77 $ 1.67
Diluted $ 1.66 $ 1.24 $ 1.82 $ 1.77 $ 1.67
Dividends declared $ 1.56 $ 1.56 $ 1.27 $ 1.24 $ 1.22
Book value $ 12.58 $ 12.29 $ 12.56 $ 12.21 $ 11.70
(a) Includes long-term debt due within one year.
This data should be read in conjunction with the Consolidated Financial Statements
and the notes to Consolidated Financial Statements contained in the 1999 Annual Report
to Shareholders, which is incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by Item 7 is incorporated by reference
from pages 19 through 35 of the 1999 Annual Report to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by Item 7A is incorporated by reference
from pages 32 through 35 of the 1999 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is incorporated by reference
from pages 38 through 70 of the 1999 Annual Report to Shareholders.
Item 14(a)1 includes a listing of financial statements included in
the 1999 Annual Report to Shareholders.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required on Identification of Directors is
incorporated by reference from "Election of Directors" in the Proxy
Statement prepared for the May 2000 annual meeting of shareholders.
The information required on the Company's executive officers is
provided below.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age* Positions
- ---------------------------------------------------------------------
Richard D. Farman 64 Chairman and Chief Executive Officer
Stephen L. Baum 58 Vice Chairman, President and Chief
Operating Officer
Donald E. Felsinger 52 Group President, Unregulated
Business Units
Warren I. Mitchell 62 Group President, Regulated
Business Units
John R. Light 58 Executive Vice President and
General Counsel
Neal E. Schmale 53 Executive Vice President and
Chief Financial Officer
Darcel L. Hulse 52 Senior Vice President
Frederick E. John 53 Senior Vice President, External
Affairs
Margot A. Kyd 46 Senior Vice President,
Chief Administrative and
Environmental Officer
G. Joyce Rowland 45 Senior Vice President, Human
Resources and Chief Ethics Officer
Frank H. Ault 55 Vice President and Controller
* As of December 31, 1999.
Each Executive Officer has been an officer of the Company or one of
its subsidiaries for more than five years, with the exception of
Mssrs. Hulse, Light and Schmale. Prior to joining the Company in 1999,
Mr. Hulse was President of Unocal Asia-Pacific Ventures. Prior to
joining the Company in 1998, Mr. Light was a partner in the law firm
of Latham & Watkins. Prior to joining the Company in 1997, Mr. Schmale
was Chief Financial Officer of Unocal Corporation.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference
from "Election of Directors" and "Executive Compensation" in the
Proxy Statement prepared for the May 2000 annual meeting of
shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 is incorporated by reference
from "Election of Directors" in the Proxy Statement prepared for
the May 2000 annual meeting of shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements
Page in
Annual Report*
Statement of Management Responsibility for
Consolidated Financial Statements. . . . . . . . . . . 37
Independent Auditors' Report . . . . . . . . . . . . . . 38
Statements of Consolidated Income for the years
ended December 31, 1999, 1998 and 1997 . . . . . . . . 39
Consolidated Balance Sheets at December 31,
1999 and 1998. . . . . . . . . . . . . . . . . . . . . 40
Statements of Consolidated Cash Flows for the
years ended December 31, 1999, 1998 and 1997 . . . . . 42
Statements of Consolidated Changes in
Shareholders' Equity for the years ended
December 31, 1999, 1998 and 1997 . . . . . . . . . . . 44
Notes to Consolidated Financial Statements . . . . . . . 45
*Incorporated by reference from the indicated pages of the 1999
Annual Report to Shareholders.
2. Financial statement schedules
The following documents may be found in this report at the
indicated page numbers.
Independent Auditors' Consent and
Report on Schedule. . . . . . . . . . . . . . . . . . 29
Schedule I--Condensed Financial Information of Parent. . 30
Any other schedules for which provision is made in Regulation S-X
are not required under the instructions contained therein or are
inapplicable.
3. Exhibits
See Exhibit Index on page 33 of this report.
(b) Reports on Form 8-K
The following reports on Form 8-K were filed after September 30,
1999:
Current Report on Form 8-K filed January 28, 2000 and Amended
Current Report on Form 8-K/A filed February 8, 2000 reported
earnings for the year ended December 31, 1999 and announced a
tender offer to purchase common shares and a dividend reduction.
Current Report on Form 8-K filed February 18, 2000 and Current
Report on Form 8-K filed February 22, 2000 announced the sale of
$200,000,000 of 8.9% Cumulative Quarterly Income Preferred
Securities (Series A) and the execution of an underwriting
agreement for the issuance and sale of $500,000,000 aggregate
principal amount 7.95% Notes due 2010.
Current Report on Form 8-K filed March 9, 2000 reported the final
results of the tender offer to purchase common shares.
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
To the Board of Directors and Shareholders of Sempra Energy:
We consent to the incorporation by reference in Registration
Statement Numbers 333-51309 and 333-77843 on Form S-3 and
Registration Statement Number 333-56161 on Form S-8 of Sempra
Energy of our report dated February 4, 2000 (February 25, 2000 as
to Note 17), incorporated by reference in this Annual Report on
Form 10-K of Sempra Energy for the year ended December 31, 1999.
Our audits of the financial statements referred to in our
aforementioned report also included the financial statement
schedule of Sempra Energy listed in Item 14. This financial
statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on
our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic financial statements
taken as a whole, presents fairly in all material respects the
information set forth therein.
/S/ DELOITTE & TOUCHE LLP
San Diego, California
March 28, 2000
Schedule I -- CONDENSED FINANCIAL INFORMATION OF PARENT
SEMPRA ENERGY
Condensed Statement of Income
(Dollars in millions, except per share amounts)
For the year ended December 31 1999 1998
-------- --------
Operating revenues and other income $ 9 $ --
Operating expenses, interest and income taxes 22 10
-------- --------
Loss before subsidiary earnings (13) (10)
Subsidiary earnings 407 304
-------- --------
Net income $ 394 $ 294
======== ========
Average common shares outstanding (basic) 237,245 236,423
-------- --------
Average common shares outstanding (diluted) 237,553 237,124
-------- --------
Net income per common share (basic) $ 1.66 $ 1.24
-------- --------
Net income per common share (diluted) $ 1.66 $ 1.24
======== ========
Condensed Balance Sheet
(Dollars in millions)
Balance at December 31 1999 1998
-------- --------
Assets:
Cash and cash equivalents $ -- $ 67
Dividends receivable -- 100
Other current assets 11 174
-------- --------
Total current assets 11 341
Investments in subsidiaries 3,828 2,820
Other assets 167 106
-------- --------
Total Assets $ 4,006 $ 3,267
======== ========
Liabilities and Shareholders' Equity:
Dividends payable $ 94 $ 93
Other current liabilities 298 221
-------- --------
Total current liabilities 392 314
Long-term debt 138 9
Loan from SDG&E 422 --
Other long-term liabilities 68 31
Common equity 2,986 2,913
-------- --------
Total Liabilities and Shareholders' Equity $ 4,006 $ 3,267
======== =======
SEMPRA ENERGY
Condensed Statement of Cash Flows
(Dollars in millions)
For the year ended December 31 1999 1998
-------- --------
Cash flows from operating activities $ 337 $ 71
-------- --------
Sale of common stock 3 4
Loan from SDG&E 422 --
Dividends paid (368) (94)
-------- --------
Cash provided by (used in) financing activities 57 (90)
-------- --------
Expenditures for property, plant and equipment (86) (44)
Increase in investments and other assets (475) --
Dividends received from subsidiaries 100 130
-------- --------
Cash provided by (used in) investing activities (461) 86
-------- --------
Net cash flow (67) 67
Cash and cash equivalents,
beginning of year 67 --
-------- --------
Cash and cash equivalents, end of year $ -- $ 67
======== ========
Supplemental Disclosure of Cash Flow Information:
Cash dividends received from subsidiaries $ 200 $ 130
======== ========
Property dividends received from subsidiaries $ 2 $ 56
======== ========
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized.
SEMPRA ENERGY
By: /s/ Richard D. Farman
.
Richard D. Farman
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.
Name/Title Signature Date
Principal Executive Officers:
Richard D. Farman
Chairman, Chief Executive Officer /s/ Richard D. Farman March 7, 2000
Stephen L. Baum
Vice Chairman, President,
Chief Operating Officer /s/ Stephen L. Baum March 7, 2000
Principal Financial Officer:
Neal E. Schmale
Executive Vice President,
Chief Financial Officer /s/ Neal E. Schmale March 7, 2000
Principal Accounting Officer:
Frank H. Ault
Vice President and Controller /s/ Frank H. Ault March 7, 2000
Directors:
Richard D. Farman, Chairman /s/ Richard D. Farman March 7, 2000
Stephen L. Baum, Vice Chairman /s/ Stephen L. Baum March 7, 2000
Hyla H. Bertea, Director /s/ Hyla H. Bertea March 7, 2000
Ann L. Burr, Director /s/ Ann L. Burr March 7, 2000
Herbert L. Carter, Director /s/ Herbert L. Carter March 7, 2000
Richard A. Collato, Director /s/ Richard A. Collato March 7, 2000
Daniel W. Derbes, Director /s/ Daniel W. Derbes March 7, 2000
Wilford D. Godbold, Jr., Director /s/ Wilford D. Godbold, Jr. March 7, 2000
Robert H. Goldsmith, Director /s/ Robert H. Goldsmith March 7, 2000
William D. Jones, Director /s/ William D. Jones March 7, 2000
Ignacio E. Lozano, Jr., Director /s/ Ignacio E. Lozano, Jr. March 7, 2000
Ralph R. Ocampo, Director /s/ Ralph R. Ocampo March 7, 2000
William G. Ouchi, Director /s/ William G. Ouchi March 7, 2000
Richard J. Stegemeier, Director /s/ Richard J. Stegemeier March 7, 2000
Thomas C. Stickel, Director /s/ Thomas C. Stickel March 7, 2000
Diana L. Walker, Director /s/ Diana L. Walker March 7, 2000
EXHIBIT INDEX
The Forms 8, 8-B/A, 8-K, S-4, 10-K and 10-Q referred to herein were filed
under Commission File Number 1-40 (Pacific Enterprises), Commission File
Number 1-3779 (San Diego Gas & Electric), Commission File Number 1-1402
(Southern California Gas Company), Commission File Number 1-11439 (Enova
Corporation) and/or Commission File Number 333-30761 (SDG&E Funding LLC).
3.a The following exhibits relate to Sempra Energy and its subsidiaries
Exhibit 1 -- Underwriting Agreements
Enova Corporation and San Diego Gas & Electric Company (SDG&E)
- --------------------------------------------------------------
1.01 Underwriting Agreement dated December 4, 1997 (Incorporated by
reference from Form 8-K filed by SDG&E Funding LLC on
December 23, 1997 (Exhibit 1.1)).
Exhibit 3 -- Bylaws and Articles of Incorporation
Bylaws
Sempra Energy
- -------------
3.01 Amended and Restated Bylaws of Sempra Energy effective May 26, 1998
(Incorporated by reference from the Registration Statement on Form
S-8 Sempra Energy Registration No. 333-56161 dated June 5, 1998
(Exhibit 3.2)).
Articles of Incorporation
Sempra Energy
- -------------
3.02 Amended and Restated Articles of Incorporation of Sempra Energy
(Incorporated by reference to the Registration Statement on Form S-3
File No. 333-51309 dated April 29, 1998, Exhibit 3.1).
Exhibit 4 -- Instruments Defining the Rights of Security Holders,
Including Indentures
The Company agrees to furnish a copy of each such instrument to the
Commission upon request.
Enova Corporation and San Diego Gas & Electric Company (SDG&E)
- --------------------------------------------------------------
4.01 Mortgage and Deed of Trust dated July 1, 1940. (Incorporated
by reference from SDG&E Registration No. 2-49810, Exhibit 2A.)
4.02 Second Supplemental Indenture dated as of March 1, 1948.
(Incorporated by reference from SDG&E Registration No. 2-49810,
Exhibit 2C.)
4.03 Ninth Supplemental Indenture dated as of August 1, 1968.
(Incorporated by reference from SDG&E Registration No. 2-68420,
Exhibit 2D.)
4.04 Tenth Supplemental Indenture dated as of December 1, 1968.
(Incorporated by reference from SDG&E Registration No. 2-36042,
Exhibit 2K.)
4.05 Sixteenth Supplemental Indenture dated August 28, 1975.
(Incorporated by reference from SDG&E Registration No. 2-68420,
Exhibit 2E.)
4.06 Thirtieth Supplemental Indenture dated September 28, 1983.
(Incorporated by reference from SDG&E Registration No. 33-34017,
Exhibit 4.3.)
Pacific Enterprises/Southern California Gas
- -------------------------------------------
4.07 First Mortgage Indenture of Southern California Gas Company to American
Trust Company dated as of October 1, 1940 (Registration Statement No.
2-4504 filed by Southern California Gas Company on September 16, 1940;
Exhibit B-4).
4.08 Supplemental Indenture of Southern California Gas Company to American
Trust Company dated as of July 1, 1947 (Registration Statement No. 2-
7072 filed by Southern California Gas Company on March 15, 1947;
Exhibit B-5).
4.09 Supplemental Indenture of Southern California Gas Company to American
Trust Company dated as of August 1, 1955 (Registration Statement No.
2-11997 filed by Pacific Lighting Corporation on October 26, 1955;
Exhibit 4.07).
4.10 Supplemental Indenture of Southern California Gas Company to American
Trust Company dated as of June 1, 1956 (Registration Statement No.
2-12456 filed by Southern California Gas Company on April 23, 1956;
Exhibit 2.08).
4.11 Supplemental Indenture of Southern California Gas Company to Wells
Fargo Bank, National Association dated as of August 1, 1972
(Registration Statement No. 2-59832 filed by Southern California Gas
Company on September 6, 1977; Exhibit 2.19).
4.12 Supplemental Indenture of Southern California Gas Company to Wells
Fargo Bank, National Association dated as of May 1, 1976 (Registration
Statement No. 2-56034 filed by Southern California Gas Company on April
14, 1976; Exhibit 2.20).
4.13 Supplemental Indenture of Southern California Gas Company to Wells
Fargo Bank, National Association dated as of September 15, 1981
(Pacific Enterprises 1981 Form 10-K; Exhibit 4.25).
4.14 Supplemental Indenture of Southern California Gas Company to
Manufacturers Hanover Trust Company of California, successor to Wells
Fargo Bank, National Association, and Crocker National Bank as
Successor Trustee dated as of May 18, 1984 (Southern California Gas
Company 1984 Form 10-K; Exhibit 4.29).
4.15 Supplemental Indenture of Southern California Gas Company to Bankers
Trust Company of California, N.A., successor to Wells Fargo Bank,
National Association dated as of January 15, 1988
(Pacific Enterprises 1987 Form 10-K; Exhibit 4.11).
4.16 Supplemental Indenture of Southern California Gas Company to First
Trust of California, National Association, successor to Bankers Trust
Company of California, N.A. dated as of August 15, 1992 (Registration
Statement No. 33-50826 filed by Southern California Gas Company on
August 13, 1992; Exhibit 4.37).
Exhibit 10 -- Material Contracts (Previously filed exhibits are
incorporated by reference from Forms 8-K, S-4, 10-K or
10-Q as referenced below).
Sempra Energy
- -------------
10.01 Amendment to Employment Agreement, effective December 1, 1998.
(Employment agreement, dated as of October 12, 1996 between
Mineral Energy Company and Stephen L. Baum (Enova 8-K filed
October 15, 1996, Exhibit 10.2))
10.02 Amendment to Employment Agreement effective December 1, 1998.
(Employment contract dated as of October 12, 1996 between
Mineral Energy Company and Richard D. Farman (Enova 8-K filed
October 15, 1996, Exhibit 10.3))
10.03 Amendment to Employment Agreement effective December 1, 1998.
(Employment contract, dated as of October 12, 1996 between
Mineral Energy Company and Donald E. Felsinger (Enova 8-K filed
October 15, 1996, Exhibit 10.4))
10.04 Amendment to Employment Agreement effective December 1, 1998.
(Employment contract, dated as of October 12, 1996 between
Mineral Energy Company and Warren I. Mitchell (Enova 8-K filed
October 15, 1996, Exhibit 10.5))
Enova Corporation and San Diego Gas & Electric Company (SDG&E)
- --------------------------------------------------------------
10.05 Transition Property Purchase and Sale Agreement dated December
16, 1997 (Incorporated by reference from Form 8-K filed by SDG&E
Funding LLC on December 23, 1997 (Exhibit 10.1)).
10.06 Transition Property Servicing Agreement dated December 16, 1997
(Incorporated by reference from Form 8-K filed by SDG&E Funding
LLC on December 23, 1997 (Exhibit 10.2)).
Compensation
Sempra Energy
- -------------
10.07 Sempra Energy Supplemental Executive Retirement Plan as amended
and restated effective July 1, 1998 (1998 Form 10-K Exhibit 10.09).
10.08 Sempra Energy Deferred Compensation Agreement for Directors
effective June 1, 1998 (1998 Form 10-K Exhibit 10.10).
10.09 Sempra Energy Executive Incentive Plan effective June 1, 1998
1998 Form 10-K Exhibit 10.11).
10.10 Sempra Energy Executive Deferred Compensation Agreement
effective June 1, 1998 (1998 Form 10-K Exhibit 10.12).
10.11 Sempra Energy Retirement Plan for Directors effective June 1, 1998
(1998 Form 10-K Exhibit 10.13).
10.12 Sempra Energy 1998 Long Term Incentive Plan (Incorporated by reference
from the Registration Statement on Form S-8 Sempra Energy Registration
No. 333-56161 dated June 5, 1998 (Exhibit 4.1)).
10.13 Sempra Energy 1998 Non-Employee Directors' Stock Plan (Incorporated by
reference from the Registration Statement on Form S-8 Sempra Energy
Registration No. 333-56161 dated June 5, 1998 (Exhibit 4.2)).
San Diego Gas & Electric (SDG&E)
- --------------------------------
10.14 Supplemental Executive Retirement Plan restated as of
July 1, 1994 (1994 SDG&E Form 10-K Exhibit 10.14).
Pacific Enterprises/Southern California Gas Company
- ---------------------------------------------------
10.15 Pacific Enterprises Employee Stock Ownership Plan and Trust Agreement
as amended effective October 1, 1992 (Pacific Enterprises 1992
Form 10-K Exhibit 10.18).
Financing
Enova Corporation and San Diego Gas & Electric (SDG&E)
- ------------------------------------------------------
10.16 Loan agreement with the City of Chula Vista in connection
with the issuance of $25 million of Industrial Development
Bonds, dated as of October 1, 1997 (Enova 1997 Form 10-K
Exhibit 10.34).
10.17 Loan agreement with the City of Chula Vista in connection
with the issuance of $38.9 million of Industrial Development
Bonds, dated as of August 1, 1996 (Enova 1996 Form 10-K
Exhibit 10.31).
10.18 Loan agreement with the City of Chula Vista in connection
with the issuance of $60 million of Industrial Development
Bonds, dated as of November 1, 1996 (Enova 1996 Form 10-K
Exhibit 10.32).
10.19 Loan agreement with City of San Diego in connection with
the issuance of $57.7 million of Industrial Development
Bonds, dated as of June 1, 1995 (June 30, 1995 SDG&E
Form 10-Q Exhibit 10.3).
10.20 Loan agreement with the City of San Diego in connection with
the issuance of $92.9 million of Industrial Development
Bonds 1993 Series C dated as of July 1, 1993 (June 30, 1993
SDG&E Form 10-Q Exhibit 10.2).
10.21 Loan agreement with the City of San Diego in connection with
the issuance of $70.8 million of Industrial Development Bonds
1993 Series A dated as of April 1, 1993 (March 31, 1993 SDG&E
Form 10-Q Exhibit 10.3).
10.22 Loan agreement with the City of San Diego in connection with
the issuance of $118.6 million of Industrial Development
Bonds dated as of September 1, 1992 (Sept. 30, 1992 SDG&E
Form 10-Q Exhibit 10.1).
10.23 Loan agreement with the City of Chula Vista in connection
with the issuance of $250 million of Industrial Development
Bonds, dated as of December 1, 1992 (1992 SDG&E Form 10-K
Exhibit 10.5).
10.24 Loan agreement with the California Pollution Control Financing
Authority in connection with the issuance of $129.82 million
of Pollution Control Bonds, dated as of June 1, 1996
(Enova 1996 Form 10-K Exhibit 10.41).
10.25 Loan agreement with the California Pollution Control
Financing Authority in connection with the issuance of $60
million of Pollution Control Bonds dated as of June 1, 1993
(June 30, 1993 SDG&E Form 10-Q Exhibit 10.1).
10.26 Loan agreement with the California Pollution Control Financing
Authority, dated as of December 1, 1991, in connection with
the issuance of $14.4 million of Pollution Control Bonds
(1991 SDG&E Form 10-K Exhibit 10.11).
Natural Gas Transportation
Enova Corporation and San Diego Gas & Electric (SDG&E)
- ------------------------------------------------------
10.27 Amendment to Firm Transportation Service Agreement, dated
December 2, 1996, between Pacific Gas and Electric Company
and San Diego Gas & Electric Company (1997 Enova Corporation
Form 10-K Exhibit 10.58).
10.28 Firm Transportation Service Agreement, dated December 31,
1991 between Pacific Gas and Electric Company and San Diego
Gas & Electric Company (1991 SDG&E Form 10-K Exhibit 10.7).
10.29 Firm Transportation Service Agreement, dated October 13, 1994
between Pacific Gas Transmission Company and San Diego Gas
& Electric Company (1997 Enova Corporation Form 10-K Exhibit
10.60).
Nuclear
Enova Corporation and San Diego Gas & Electric (SDG&E)
- ------------------------------------------------------
10.30 Uranium enrichment services contract between the U.S.
Department of Energy (DOE assigned its rights to the U.S.
Enrichment Corporation, a U.S. government-owned corporation,
on July 1, 1993) and Southern California Edison Company, as
agent for SDG&E and others; Contract DE-SC05-84UEO7541,
dated November 5, 1984, effective June 1, 1984, as amended
(1991 SDG&E Form 10-K Exhibit 10.9).
10.31 Fuel Lease dated as of September 8, 1983 between SONGS Fuel
Company, as Lessor and San Diego Gas & Electric Company, as
Lessee, and Amendment No. 1 to Fuel Lease, dated September
14, 1984 and Amendment No. 2 to Fuel Lease, dated March 2,
1987 (1992 SDG&E Form 10-K Exhibit 10.11).
10.32 Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station,
approved November 25, 1987 (1992 SDG&E Form 10-K Exhibit 10.7).
10.33 Amendment No. 1 to the Qualified CPUC Decommissioning Master
Trust Agreement dated September 22, 1994 (see Exhibit 10.32
herein)(1994 SDG&E Form 10-K Exhibit 10.56).
10.34 Second Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.32 herein)(1994 SDG&E Form 10-K Exhibit 10.57).
10.35 Third Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.32 herein)(1996 SDG&E Form 10-K Exhibit 10.59).
10.36 Fourth Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.32 herein)(1996 SDG&E Form 10-K Exhibit 10.60).
10.37 Fifth Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generation Station
(see Exhibit 10.32 herein)(1999 SDG&E Form 10-K Exhibit 10.26).
10.38 Sixth Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.32 herein)(1999 SDG&E Form 10-K Exhibit 10.27).
10.39 Nuclear Facilities Non-Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station,
approved November 25, 1987 (1992 SDG&E Form 10-K Exhibit 10.8).
10.40 First Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Non-Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.39 herein)(1996 Form 10-K Exhibit 10.62).
10.41 Second Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Non-Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.39 herein)(1996 Form 10-K Exhibit 10.63).
10.42 Third Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Non-Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.39 herein)(1999 SDG&E Form 10-K Exhibit 10.31).
10.43 Fourth Amendment to the San Diego Gas & Electric Company
Nuclear Facilities Non-Qualified CPUC Decommissioning Master
Trust Agreement for San Onofre Nuclear Generating Station
(see Exhibit 10.39 herein)(1999 SDG&E Form 10-K Exhibit 10.32).
10.44 Second Amended San Onofre Agreement among Southern
California Edison Company, SDG&E, the City of Anaheim and
the City of Riverside, dated February 26, 1987 (1990 SDG&E
Form 10-K Exhibit 10.6).
10.45 U. S. Department of Energy contract for disposal of spent
nuclear fuel and/or high-level radioactive waste, entered
into between the DOE and Southern California Edison Company,
as agent for SDG&E and others; Contract DE-CR01-83NE44418,
dated June 10, 1983 (1988 SDG&E Form 10-K Exhibit 10N).
Exhibit 12 -- Statement re: Computation Of Ratios
12.01 Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends for the years ended December
31, 1999, 1998, 1997, 1996 and 1995.
Exhibit 13 -- Annual Report to Security Holders
13.01 Sempra Energy 1999 Annual Report to Shareholders. (Such report,
except for the portions thereof which are expressly incorporated by
reference in this Annual Report, is furnished for the information
of the Securities and Exchange Commission and is not to be deemed
"filed" as part of this Annual Report).
Exhibit 21 -- Subsidiaries
21.01 Schedule of Significant Subsidiaries at December 31, 1999.
Exhibit 23 -- Independent Auditors' Consent, page 29.
Exhibit 27 -- Financial Data Schedules
27.01 Financial Data Schedule for the year ended December 31, 1999.
GLOSSARY
BCAP Biennial Cost Allocation Proceeding
Bcf One Billion Cubic Feet (of natural gas)
CEC California Energy Commission
CPUC California Public Utilities Commission
CTC Competition Transition Charge
DOE Department of Energy
DGN Distribuidora de Gas Natural
DTSC Department of Toxic Substances Control
Edison Southern California Edison Company
EMFs Electric and Magnetic Fields
Enova Enova Corporation
EPA Environmental Protection Agency
FERC Federal Energy Regulatory Commission
GCIM Gas Cost Incentive Mechanism
IOUs Investor-Owned Utilities
ISO Independent System Operator
Kwhr Kilowatt Hour
Mw Megawatt
NRC Nuclear Regulatory Commission
PBR Performance-Based Ratemaking/Regulation
PE Pacific Enterprises
PG&E Pacific Gas and Electric Company
PGE Portland General Electric Company
PNM Public Service Company of New Mexico
PRP Potentially Responsible Party
PSEG Public Service Enterprise Group
PX Power Exchange
ROE Return on Equity
ROR Rate of Return
SDG&E San Diego Gas & Electric Company
SEI Sempra Energy International
SET Sempra Energy Trading
SoCalGas Southern California Gas Company
SONGS San Onofre Nuclear Generating Station
Southwest Powerlink A transmission line connecting San Diego to
Phoenix and intermediate points
UEG Utility Electric Generation
WSPP Western Systems Power Pool