San Diego Gas & Electric 10-K 26 Feb 10 2009 FY Annual report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION (USD $)
In Billions, except Share data	12 Months Ended Dec. 31, 2009
Document and Entity Information
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Entity Registrant Name	Sempra Energy
Entity Central Index Key	0001032208
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	12.1
Entity Common Shares Outstanding	247,003,443

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Share data in Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008		12 Months Ended Dec. 31, 2007
Sempra Energy Consolidated
REVENUES
Sempra Utilities	$6,220	$7,972	[1]	$7,053	[1]
Sempra Global and parent	1,886	2,786	[1]	4,385	[1]
Total revenues	8,106	10,758	[1]	11,438	[1]
Sempra Utilities:
Cost of natural gas	(1,530)	(3,244)	[1]	(2,763)	[1]
Cost of electric fuel and purchased power	(672)	(900)	[1]	(699)	[1]
Sempra Global and parent:
Cost of natural gas, electric fuel and purchased power	(976)	(1,671)	[1]	(1,302)	[1]
Other cost of sales	(80)	(182)	[1]	(988)	[1]
Operation and maintenance	(2,474)	(2,536)	[1]	(3,032)	[1]
Depreciation and amortization	(775)	(687)	[1]	(686)	[1]
Franchise fees and other taxes	(296)	(312)	[1]	(295)	[1]
Gains on sale of assets	3	114	[1]	6	[1]
Write-off of long-lived assets	(132)	0	[1]	0	[1]
Equity earnings (losses):
RBS Sempra Commodities LLP	463	383	[1]	0	[1]
Other	36	37	[1]	(9)	[1]
Other income (expense), net	149	(109)	[1]	73	[1]
Interest income	21	45	[1]	72	[1]
Interest expense	(367)	(253)	[1]	(272)	[1]
Income from continuing operations before income taxes and equity earnings of certain unconsolidated subsidiaries	1,476	1,443	[1]	1,543	[1]
Income tax expense	(422)	(438)	[1]	(524)	[1]
Equity earnings, net of income tax	68	63	[1]	99	[1]
Income from continuing operations	1,122	1,068	[1]	1,118	[1]
Discontinued operations, net of income tax	0	0	[1]	(26)	[1]
Net income	1,122	1,068	[1]	1,092	[1]
(Earnings) losses attributable to noncontrolling interests	7	55	[1]	17	[1]
Preferred dividends of subsidiaries	(10)	(10)	[1]	(10)	[1]
Earnings	1,119	1,113	[1]	1,099	[1]
Basic earnings per common share:
Basic earnings common per share, continuing operations attributable to common shares	4.6	4.5	[1]	4.34	[1]
Basic earnings per common share, discontinued operations, net of income tax	0	0	[1]	-0.1	[1]
Basic earnings per common share	4.6	4.5	[1]	4.24	[1]
Basic earnings per common share, weighted-average number of shares outstanding (thousands)	243,339	247,387	[1]	259,269	[1]
Diluted earnings per common share:
Diluted earnings per common share, continuing operations attributable to common shares	4.52	4.43	[1]	4.26	[1]
Diluted earnings per common share, discontinued operations, net of income tax	0	0	[1]	-0.1	[1]
Diluted earnings per common share	4.52	4.43	[1]	4.16	[1]
Diluted earnings per common share, weighted-average number of shares outstanding (thousands)	247,384	251,159	[1]	264,004	[1]
Dividends declared per share of common stock	1.56	1.37	[1]	1.24	[1]
Sempra Energy Consolidated | Retained Earnings
Equity earnings (losses):
Net income	1,129	1,123	[1]	1,109	[1]
Preferred dividends of subsidiaries	(10)	(10)	[1]	(10)	[1]
Sempra Energy Consolidated | Total Shareholders' Equity
Equity earnings (losses):
Net income	1,129	1,123	[1]	1,109	[1]
Preferred dividends of subsidiaries	(10)	(10)	[1]	(10)	[1]
Sempra Energy Consolidated | Noncontrolling Interests
Equity earnings (losses):
Net income	(7)	(55)	[1]	(17)	[1]
San Diego Gas and Electric Company and Subsidiary
Utility operating revenues
Electric	2,426	2,562	[1]	2,194	[1]
Natural gas	490	689	[1]	658	[1]
Total utility operating revenues	2,916	3,251	[1]	2,852	[1]
Utility operating expenses
Utility cost of natural gas	206	415	[1]	392	[1]
Utility cost of electric fuel and purchased power	672	900	[1]	699	[1]
Utility operation and maintenance	961	913	[1]	807	[1]
Utility depreciation and amortization	329	298	[1]	301	[1]
Utility franchise fees and other taxes	160	158	[1]	155	[1]
Utility gains on sale of assets	(1)	(3)	[1]	(2)	[1]
Total utility operating expenses	2,327	2,681	[1]	2,352	[1]
Utility operating income	589	570	[1]	500	[1]
Equity earnings (losses):
Other income (expense), net	64	(29)	[1]	(6)	[1]
Interest income	1	6	[1]	8	[1]
Interest expense	(104)	(96)	[1]	(96)	[1]
Income from continuing operations before income taxes and equity earnings of certain unconsolidated subsidiaries	550	451	[1]	406	[1]
Income tax expense	(177)	(161)	[1]	(135)	[1]
Net income	373	290	[1]	271	[1]
(Earnings) losses attributable to noncontrolling interests	(24)	54	[1]	17	[1]
Earnings	349	344	[1]	288	[1]
Preferred dividend requirements	(5)	(5)	[1]	(5)	[1]
Earnings attributable to common shares	344	339	[1]	283	[1]
San Diego Gas and Electric Company and Subsidiary | Retained Earnings
Equity earnings (losses):
Net income	349	344	[1]	288	[1]
San Diego Gas and Electric Company and Subsidiary | Total Shareholders' Equity
Equity earnings (losses):
Net income	349	344	[1]	288	[1]
San Diego Gas and Electric Company and Subsidiary | Noncontrolling Interests
Equity earnings (losses):
Net income	24	(54)	[1]	(17)	[1]
Pacific Enterprises and Subsidiaries
Utility operating revenues
Total utility operating revenues	3,355	4,768	[1]	4,282	[1]
Utility operating expenses
Utility cost of natural gas	1,343	2,841	[1]	2,420	[1]
Utility operation and maintenance	1,138	1,077	[1]	1,022	[1]
Utility depreciation and amortization	293	280	[1]	281	[1]
Utility franchise fees and other taxes	105	135	[1]	125	[1]
Utility gains on sale of assets	0	0	[1]	(2)	[1]
Total utility operating expenses	2,879	4,333	[1]	3,846	[1]
Utility operating income	476	435	[1]	436	[1]
Equity earnings (losses):
Other income (expense), net	4	2	[1]	(3)	[1]
Interest income	4	22	[1]	51	[1]
Interest expense	(69)	(65)	[1]	(76)	[1]
Income from continuing operations before income taxes and equity earnings of certain unconsolidated subsidiaries	415	394	[1]	408	[1]
Income tax expense	(145)	(141)	[1]	(165)	[1]
Net income	270	253	[1]	243	[1]
Preferred dividends of subsidiaries	(1)	(1)	[1]	(1)	[1]
Earnings	269	252	[1]	242	[1]
Preferred dividend requirements	(4)	(4)	[1]	(4)	[1]
Earnings attributable to common shares	265	248	[1]	238	[1]
Pacific Enterprises and Subsidiaries | Retained Earnings
Equity earnings (losses):
Net income	270	253	[1]	243	[1]
Preferred dividends of subsidiaries	(1)	(1)	[1]	(1)	[1]
Pacific Enterprises and Subsidiaries | Total Shareholders' Equity
Equity earnings (losses):
Net income	270	253	[1]	243	[1]
Preferred dividends of subsidiaries	(1)	(1)	[1]	(1)	[1]
Southern California Gas Company and Subsidiaries
Utility operating revenues
Total utility operating revenues	3,355	4,768		4,282
Utility operating expenses
Utility cost of natural gas	1,343	2,841		2,420
Utility operation and maintenance	1,138	1,078		1,021
Utility depreciation and amortization	293	280		281
Utility franchise fees and other taxes	105	135		125
Utility gains on sale of assets	0	0		(2)
Total utility operating expenses	2,879	4,334		3,845
Utility operating income	476	434		437
Equity earnings (losses):
Other income (expense), net	7	2		(3)
Interest income	3	11		27
Interest expense	(68)	(62)		(70)
Income from continuing operations before income taxes and equity earnings of certain unconsolidated subsidiaries	418	385		391
Income tax expense	(144)	(140)		(160)
Net income	274	245		231
Earnings	274	245		231
Preferred dividend requirements	(1)	(1)		(1)
Earnings attributable to common shares	273	244		230
Southern California Gas Company and Subsidiaries | Retained Earnings
Equity earnings (losses):
Net income	$274	$245		$231
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160).

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Sempra Energy Consolidated
Current assets:
Cash and cash equivalents	$110	$331	[1]
Short-term investments	0	176
Restricted cash	35	27
Trade accounts receivable, net	971	903
Other accounts and notes receivable, net	159	78
Due from unconsolidated affiliates	41	4
Income taxes receivable	221	195
Deferred income taxes, net current assets	10	31
Inventories	197	320
Regulatory assets	54	121
Fixed-price contracts and other derivatives, current assets	77	160
Insurance receivable related to wildfire litigation (Note 17)	273	0
Other current assets	147	130
Total current assets	2,295	2,476
Investments and other assets:
Regulatory assets arising from fixed-price contracts and other derivatives - noncurrent	241	264
Regulatory assets arising from pension and other postretirement benefit obligations	959	1,188
Other regulatory assets	603	534
Nuclear decommissioning trusts	678	577
Investment in RBS Sempra Commodities LLP	2,172	2,082
Other investments	2,151	1,166
Goodwill and other intangible assets	524	539
Sundry	608	709
Total investments and other assets	7,936	7,059
Property, plant and equipment:
Property, plant and equipment	25,034	23,153
Less accumulated depreciation and amortization	(6,753)	(6,288)
Property, plant and equipment, net	18,281	16,865
Total assets	28,512	26,400
Current liabilities:
Short-term debt	618	503	[1]
Accounts payable - trade	522	606	[1]
Accounts payable - other	171	250	[1]
Due to unconsolidated affiliates	29	38	[1]
Dividends and interest payable	190	156	[1]
Accrued compensation and benefits	264	280	[1]
Regulatory balancing accounts, net	382	335	[1]
Current portion of long-term debt	573	410	[1]
Fixed-price contracts and other derivatives, current liabilities	95	180	[1]
Customer deposits	145	170	[1]
Reserve for wildfire litigation (Note 17)	270	0	[1]
Other current liabilities	629	684	[1]
Total current liabilities	3,888	3,612	[1]
Long-term debt	7,460	6,544	[1]
Deferred credits and other liabilities:
Due to unconsolidated affiliate	2	102	[1]
Customer advances for construction	146	155	[1]
Pension and other postretirement benefit obligations, net of plan assets	1,252	1,487	[1]
Deferred income taxes, net noncurrent liabilities	1,318	946	[1]
Deferred investment tax credits	54	57	[1]
Regulatory liabilities arising from removal obligations	2,557	2,430	[1]
Asset retirement obligations	1,277	1,159	[1]
Other regulatory liabilities	181	219	[1]
Fixed-price contracts and other derivatives, noncurrent liabilities	312	392	[1]
Deferred credits and other	735	909	[1]
Total deferred credits and other liabilities	7,834	7,856	[1]
Contingently redeemable preferred stock	79	79	[1]
Equity:
Preferred stock	0	0	[1]
Common stock	2,418	2,265	[1]
Retained earnings	6,971	6,235	[1]
Deferred compensation	(13)	(18)	[1]
Accumulated other comprehensive income (loss)	(369)	(513)	[1]
Total shareholders' equity	9,007	7,969	[1]
Preferred stock of subsidiaries	100	100	[1]
Other noncontrolling interests	144	240	[1]
Total equity	9,251	8,309	[1]
Total liabilities and equity	28,512	26,400	[1]
Sempra Energy Consolidated | Common Stock
Equity:
Total equity	2,418	2,265	[1]
Sempra Energy Consolidated | Retained Earnings
Equity:
Total equity	6,971	6,235	[1]
Sempra Energy Consolidated | Deferred Compensation Relating to ESOP
Equity:
Total equity	(13)	(18)	[1]
Sempra Energy Consolidated | Accumulated Other Comprehensive Income (Loss)
Equity:
Total equity	(369)	(513)	[1]
Sempra Energy Consolidated | Total Shareholders' Equity
Equity:
Total equity	9,007	7,969	[1]
Sempra Energy Consolidated | Noncontrolling Interests
Equity:
Total equity	244	340	[1]
San Diego Gas and Electric Company and Subsidiary
Current assets:
Cash and cash equivalents	13	19	[1]
Short-term investments	0	24
Restricted cash	8	0
Trade accounts receivable, net	229	225
Other accounts and notes receivable, net	85	30
Due from unconsolidated affiliates	8	29
Income taxes receivable	59	22
Deferred income taxes, net current assets	41	17
Inventories	61	62
Regulatory assets arising from fixed-price contracts and other derivatives - current	30	94
Regulatory assets	4	8
Fixed-price contracts and other derivatives, current assets	40	39
Insurance receivable related to wildfire litigation (Note 17)	273	0
Other current assets	35	15
Total current assets	886	584
Investments and other assets:
Due from unconsolidated affiliate	2	4
Deferred taxes recoverable in rates	415	369
Regulatory assets arising from fixed-price contracts and other derivatives - noncurrent	241	264
Regulatory assets arising from pension and other postretirement benefit obligations	342	393
Other regulatory assets	53	59
Nuclear decommissioning trusts	678	577
Sundry	43	154
Total investments and other assets	1,774	1,820
Property, plant and equipment:
Property, plant and equipment	10,156	9,095
Less accumulated depreciation and amortization	(2,587)	(2,420)
Property, plant and equipment, net	7,569	6,675
Total assets	10,229	9,079
Current liabilities:
Short-term debt	33	0	[1]
Accounts payable - trade	249	261	[1]
Due to unconsolidated affiliates	0	1	[1]
Accrued compensation and benefits	104	105	[1]
Regulatory balancing accounts, net	159	114	[1]
Current portion of long-term debt	45	2	[1]
Fixed-price contracts and other derivatives, current liabilities	51	77	[1]
Customer deposits	56	53	[1]
Reserve for wildfire litigation (Note 17)	270	0	[1]
Other current liabilities	157	163	[1]
Total current liabilities	1,124	776	[1]
Long-term debt	2,623	2,142	[1]
Deferred credits and other liabilities:
Customer advances for construction	23	26	[1]
Pension and other postretirement benefit obligations, net of plan assets	370	419	[1]
Deferred income taxes, net noncurrent liabilities	774	628	[1]
Deferred investment tax credits	26	26	[1]
Regulatory liabilities arising from removal obligations	1,330	1,212	[1]
Asset retirement obligations	585	550	[1]
Fixed-price contracts and other derivatives, noncurrent liabilities	265	347	[1]
Deferred credits and other	145	204	[1]
Total deferred credits and other liabilities	3,518	3,412	[1]
Contingently redeemable preferred stock	79	79	[1]
Equity:
Common stock	1,138	1,138	[1]
Retained earnings	1,611	1,417	[1]
Accumulated other comprehensive income (loss)	(10)	(13)	[1]
Total shareholders' equity	2,739	2,542	[1]
Other noncontrolling interests	146	128	[1]
Total equity	2,885	2,670	[1]
Total liabilities and equity	10,229	9,079	[1]
San Diego Gas and Electric Company and Subsidiary | Common Stock
Equity:
Total equity	1,138	1,138	[1]
San Diego Gas and Electric Company and Subsidiary | Retained Earnings
Equity:
Total equity	1,611	1,417	[1]
San Diego Gas and Electric Company and Subsidiary | Accumulated Other Comprehensive Income (Loss)
Equity:
Total equity	(10)	(13)	[1]
San Diego Gas and Electric Company and Subsidiary | Total Shareholders' Equity
Equity:
Total equity	2,739	2,542	[1]
San Diego Gas and Electric Company and Subsidiary | Noncontrolling Interests
Equity:
Total equity	146	128	[1]
Pacific Enterprises and Subsidiaries
Current assets:
Cash and cash equivalents	49	206	[1]
Trade accounts receivable, net	567	572
Other accounts and notes receivable, net	44	20
Due from unconsolidated affiliates	12	5
Income taxes receivable	36	108
Inventories	93	167
Regulatory assets	9	18
Other current assets	39	37
Total current assets	849	1,133
Investments and other assets:
Due from unconsolidated affiliate	513	457
Regulatory assets arising from pension and other postretirement benefit obligations	617	795
Other regulatory assets	131	105
Sundry	40	49
Total investments and other assets	1,301	1,406
Property, plant and equipment:
Property, plant and equipment	9,299	8,816
Less accumulated depreciation and amortization	(3,615)	(3,448)
Property, plant and equipment, net	5,684	5,368
Total assets	7,834	7,907
Current liabilities:
Accounts payable - trade	207	257	[1]
Accounts payable - other	120	163	[1]
Due to unconsolidated affiliates	87	106	[1]
Deferred income taxes, net current liabilities	5	6	[1]
Accrued compensation and benefits	86	92	[1]
Regulatory balancing accounts, net	223	221	[1]
Current portion of long-term debt	11	100	[1]
Customer deposits	87	114	[1]
Other current liabilities	162	213	[1]
Total current liabilities	988	1,272	[1]
Long-term debt	1,283	1,270	[1]
Deferred credits and other liabilities:
Customer advances for construction	123	131	[1]
Pension and other postretirement benefit obligations, net of plan assets	644	823	[1]
Deferred income taxes, net noncurrent liabilities	273	157	[1]
Deferred investment tax credits	28	30	[1]
Regulatory liabilities arising from removal obligations	1,227	1,218	[1]
Asset retirement obligations	662	581	[1]
Deferred taxes refundable in rates	175	214	[1]
Deferred credits and other	203	251	[1]
Total deferred credits and other liabilities	3,335	3,405	[1]
Equity:
Preferred stock	80	80	[1]
Common stock	1,462	1,462	[1]
Retained earnings	691	426	[1]
Accumulated other comprehensive income (loss)	(25)	(28)	[1]
Total shareholders' equity	2,208	1,940	[1]
Preferred stock of subsidiaries	20	20	[1]
Total equity	2,228	1,960	[1]
Total liabilities and equity	7,834	7,907	[1]
Pacific Enterprises and Subsidiaries | Preferred Stock
Equity:
Total equity	80	80	[1]
Pacific Enterprises and Subsidiaries | Common Stock
Equity:
Total equity	1,462	1,462	[1]
Pacific Enterprises and Subsidiaries | Retained Earnings
Equity:
Total equity	691	426	[1]
Pacific Enterprises and Subsidiaries | Accumulated Other Comprehensive Income (Loss)
Equity:
Total equity	(25)	(28)	[1]
Pacific Enterprises and Subsidiaries | Total Shareholders' Equity
Equity:
Total equity	2,208	1,940	[1]
Pacific Enterprises and Subsidiaries | Noncontrolling Interests
Equity:
Total equity	20	20	[1]
Southern California Gas Company and Subsidiaries
Current assets:
Cash and cash equivalents	49	206
Trade accounts receivable, net	567	572
Other accounts and notes receivable, net	44	20
Due from unconsolidated affiliates	6	0
Income taxes receivable	35	41
Inventories	93	167
Regulatory assets	9	18
Other current assets	40	37
Total current assets	843	1,061
Investments and other assets:
Regulatory assets arising from pension and other postretirement benefit obligations	617	795
Other regulatory assets	131	105
Sundry	14	24
Total investments and other assets	762	924
Property, plant and equipment:
Property, plant and equipment	9,297	8,814
Less accumulated depreciation and amortization	(3,615)	(3,448)
Property, plant and equipment, net	5,682	5,366
Total assets	7,287	7,351
Current liabilities:
Accounts payable - trade	207	257
Accounts payable - other	120	163
Due to unconsolidated affiliates	3	23
Deferred income taxes, net current liabilities	6	6
Accrued compensation and benefits	86	92
Regulatory balancing accounts, net	223	221
Current portion of long-term debt	11	100
Customer deposits	87	114
Other current liabilities	158	211
Total current liabilities	901	1,187
Long-term debt	1,283	1,270
Deferred credits and other liabilities:
Customer advances for construction	123	131
Pension and other postretirement benefit obligations, net of plan assets	644	823
Deferred income taxes, net noncurrent liabilities	280	167
Deferred investment tax credits	28	30
Regulatory liabilities arising from removal obligations	1,227	1,218
Asset retirement obligations	662	581
Deferred taxes refundable in rates	175	214
Deferred credits and other	198	240
Total deferred credits and other liabilities	3,337	3,404
Equity:
Preferred stock	22	22
Common stock	866	866
Retained earnings	903	630
Accumulated other comprehensive income (loss)	(25)	(28)
Total shareholders' equity	1,766	1,490
Total equity	1,766	1,490
Total liabilities and equity	7,287	7,351
Southern California Gas Company and Subsidiaries | Preferred Stock
Equity:
Total equity	22	22
Southern California Gas Company and Subsidiaries | Common Stock
Equity:
Total equity	866	866
Southern California Gas Company and Subsidiaries | Retained Earnings
Equity:
Total equity	903	630
Southern California Gas Company and Subsidiaries | Accumulated Other Comprehensive Income (Loss)
Equity:
Total equity	($25)	($28)
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160).

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)
Share data in Millions	Dec. 31, 2009	Dec. 31, 2008
Sempra Energy Consolidated
Preferred Stock Shares Authorized	50	50
Preferred Stock Shares Issued	0	0
Common Stock Shares Authorized	750	750
Common Stock Shares Outstanding	247	243
San Diego Gas and Electric Company and Subsidiary
Common Stock Shares Authorized	255	255
Common Stock Shares Outstanding	117	117
Pacific Enterprises and Subsidiaries
Common Stock Shares Authorized	600	600
Common Stock Shares Outstanding	84	84
Southern California Gas Company and Subsidiaries
Common Stock Shares Authorized	100	100
Common Stock Shares Outstanding	91	91

STATEMENTS OF CONSOLIDATED CASH

STATEMENTS OF CONSOLIDATED CASH FLOWS (USD $)
In Millions	12 Months Ended Dec. 31, 2009		12 Months Ended Dec. 31, 2008		12 Months Ended Dec. 31, 2007
Sempra Energy Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$1,122		$1,068	[1]	$1,092	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Discontinued operations	0		0	[1]	26	[1]
Depreciation and amortization	775		687	[1]	686	[1]
Gains on sale of assets	(3)		(114)	[1]	(6)	[1]
Deferred income taxes and investment tax credits	295		324	[1]	149	[1]
Noncash rate-reduction bond expense	0		0	[1]	55	[1]
Equity earnings	(567)		(483)	[1]	(90)	[1]
Write-off of long-lived assets	132		0	[1]	0	[1]
Fixed-price contracts and other derivatives	(30)		46	[1]	8	[1]
Other adjustments to reconcile net income to net cash provided by operating activities	(45)		150	[1]	55	[1]
Net changes in other working capital components (Excluding cash and cash equivalents and debt due within one year)
Net change in accounts and notes receivable	(190)		110	[1]	(63)	[1]
Net change in net trading assets	0		(4)	[1]	303	[1]
Net change in income taxes, net	(17)		13	[1]	(73)	[1]
Net change in inventories	124		(75)	[1]	(9)	[1]
Net change in regulatory balancing accounts	42		(138)	[1]	120	[1]
Net change in regulatory assets and liabilities	(1)		1	[1]	0	[1]
Net change in other current assets	685		71	[1]	(109)	[1]
Net change in accounts payable	(109)		(526)	[1]	(82)	[1]
Net change in other current liabilities	(790)		65	[1]	(62)	[1]
Net changes in other working capital components	(256)		(483)	[1]	25	[1]
Distributions from RBS Sempra Commodities LLP	407		85	[1]	0	[1]
Changes in other assets	139		(15)	[1]	22	[1]
Changes in other liabilities	(94)		(74)	[1]	79	[1]
Net cash provided by continuing operations, operating activities	1,875		1,191	[1]	2,101	[1]
Net cash used in discontinued operations, operating activities	0		0	[1]	(3)	[1]
Net cash provided by operating activities	1,875		1,191	[1]	2,098	[1]
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(1,912)		(2,061)	[1]	(2,011)	[1]
Proceeds from sale of assets from continuing operations, net of cash sold	179		2,295	[1]	103	[1]
Expenditures for investments and acquisition of businesses, net of cash acquired	(939)		(2,675)	[1]	(121)	[1]
Distributions from investments	23		34	[1]	18	[1]
Purchases of nuclear decommissioning and other trust assets	(267)		(485)	[1]	(646)	[1]
Proceeds from sales by nuclear decommissioning and other trusts	230		469	[1]	613	[1]
Decrease (increase) in notes receivable from unconsolidated affiliates, net	100		60	[1]	0	[1]
Purchase of bonds issued by unconsolidated affiliate	(50)		0	[1]	0	[1]
Other cash flows from investing activities	(36)		(23)	[1]	(29)	[1]
Net cash used in investing activities	(2,672)		(2,386)	[1]	(2,073)	[1]
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(341)		(339)	[1]	(316)	[1]
Preferred dividends paid by subsidiaries	(10)		(10)	[1]	(10)	[1]
Issuances of common stock	73		18	[1]	40	[1]
Repurchases of common stock	(22)		(1,018)	[1]	(185)	[1]
Issuances of debt (maturities greater than 90 days)	2,151		1,706	[1]	404	[1]
Payments on debt (maturities greater than 90 days)	(435)		(19)	[1]	(1,072)	[1]
Increase (decrease) in short-term debt, net	(659)		564	[1]	812	[1]
Payments on notes payable to unconsolidated affiliate	(100)		(60)	[1]	0	[1]
Purchase of noncontrolling interest	(94)		0	[1]	0	[1]
Other cash flows from financing activities	13		16	[1]	21	[1]
Net cash provided by (used in) financing activities	576		858	[1]	(306)	[1]
Increase (decrease) in cash and cash equivalents	(221)		(337)	[1]	(281)	[1]
Cash and cash equivalents, beginning of period	331	[1]	668	[1]	920
Cash assumed in connection with initial consolidation of variable interest entity	0		0	[1]	29	[1]
Cash and cash equivalents, end of period	110		331	[1]	668	[1]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	326		233	[1]	380
Income tax payments, net of refunds	112		114	[1]	443
Acquisition of business:
Assets acquired	0		1,307	[1]	0
Cash paid, net of cash acquired	0		(495)	[1]	0
Noncontrolling interests in acquired business	0		(86)	[1]	0
Liabilities assumed	0		726	[1]	0
Increase in capital lease obligations for investments in property, plant and equipment	50		0	[1]	0
Dividends declared but not paid	99		88	[1]	84
Fair value of stock received for services rendered	0		0	[1]	32
Fair value of stock received for sale of investments	0		0	[1]	26
Sempra Energy Consolidated | Retained Earnings
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	1,129		1,123	[1]	1,109	[1]
Sempra Energy Consolidated | Total Shareholders' Equity
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	1,129		1,123	[1]	1,109	[1]
Sempra Energy Consolidated | Noncontrolling Interests
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	(7)		(55)	[1]	(17)	[1]
San Diego Gas and Electric Company and Subsidiary
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	373		290	[1]	271	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Utility depreciation and amortization	329		298	[1]	301	[1]
Utility gains on sale of assets	(1)		(3)	[1]	(2)	[1]
Deferred income taxes and investment tax credits	73		113	[1]	(40)	[1]
Noncash rate-reduction bond expense	0		0	[1]	55	[1]
Fixed-price contracts and other derivatives	(41)		55	[1]	3	[1]
Other adjustments to reconcile net income to net cash provided by operating activities	(20)		(1)	[1]	28	[1]
Net changes in other working capital components (Excluding cash and cash equivalents and debt due within one year)
Net change in accounts and notes receivable	(53)		1	[1]	(43)	[1]
Net change in due to/from affiliates, net	0		18	[1]	7	[1]
Net change in interest receivable	0		1	[1]	(1)	[1]
Net change in income taxes, net	(44)		44	[1]	(31)	[1]
Net change in inventories	1		51	[1]	(16)	[1]
Net change in regulatory balancing accounts	32		(184)	[1]	133	[1]
Net change in other current assets	660		(49)	[1]	6	[1]
Net change in accounts payable	1		(70)	[1]	10	[1]
Net change in other current liabilities	(639)		59	[1]	(21)	[1]
Net changes in other working capital components	(42)		(129)	[1]	44	[1]
Changes in other assets	23		19	[1]	5	[1]
Changes in other liabilities	(53)		(23)	[1]	(5)	[1]
Net cash provided by operating activities	641		619	[1]	660	[1]
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(955)		(884)	[1]	(714)	[1]
Proceeds from sale of assets	1		1	[1]	2	[1]
Expenditures for short-term investments	(152)		(488)	[1]	0	[1]
Proceeds from sale of short-term investments	176		464	[1]	0	[1]
Purchases of nuclear decommissioning and other trust assets	(237)		(468)	[1]	(587)	[1]
Proceeds from sales by nuclear decommissioning and other trusts	230		468	[1]	592	[1]
Decrease (increase) in notes receivable from unconsolidated affiliates, net	20		(33)	[1]	0	[1]
Net increase in restricted cash	(8)		0	[1]	0	[1]
Net cash used in investing activities	(925)		(940)	[1]	(707)	[1]
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(150)		0	[1]	0	[1]
Preferred dividends paid	(5)		(5)	[1]	(5)	[1]
Redemptions of preferred stock	0		(14)	[1]	(3)	[1]
Issuances of long-term debt	439		193	[1]	313	[1]
Payments on long-term debt	(2)		0	[1]	(66)	[1]
Increase (decrease) in short-term debt, net	4		0	[1]	(72)	[1]
Capital contribution received by Otay Mesa VIE	4		9	[1]	0	[1]
Capital distribution made by Otay Mesa VIE	(9)		0	[1]	0	[1]
Other cash flows from financing activities	(3)		(1)	[1]	0	[1]
Net cash provided by (used in) financing activities	278		182	[1]	167	[1]
Increase (decrease) in cash and cash equivalents	(6)		(139)	[1]	120	[1]
Cash and cash equivalents, beginning of period	19	[1]	158	[1]	9
Cash assumed in connection with initial consolidation of variable interest entity	0		0	[1]	29	[1]
Cash and cash equivalents, end of period	13		19	[1]	158	[1]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	99		92		85
Income tax payments, net of refunds	148		3		206
Acquisition of business:
Increase in capital lease obligations for investments in property, plant and equipment	21		0		0
Dividends declared but not paid	1		1		1
San Diego Gas and Electric Company and Subsidiary | Retained Earnings
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	349		344	[1]	288	[1]
San Diego Gas and Electric Company and Subsidiary | Total Shareholders' Equity
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	349		344	[1]	288	[1]
San Diego Gas and Electric Company and Subsidiary | Noncontrolling Interests
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	24		(54)	[1]	(17)	[1]
Pacific Enterprises and Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	270		253	[1]	243	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Utility depreciation and amortization	293		280	[1]	281	[1]
Utility gains on sale of assets	0		0	[1]	(2)	[1]
Deferred income taxes and investment tax credits	72		92	[1]	10	[1]
Other adjustments to reconcile net income to net cash provided by operating activities	4		(2)	[1]	2	[1]
Net changes in other working capital components (Excluding cash and cash equivalents and debt due within one year)
Net change in accounts and notes receivable	(30)		102	[1]	(31)	[1]
Net change in due to/from affiliates, net	(77)		(4)	[1]	4	[1]
Net change in interest receivable	0		0	[1]	10	[1]
Net change in income taxes, net	65		(71)	[1]	42	[1]
Net change in inventories	74		(69)	[1]	8	[1]
Net change in regulatory balancing accounts	10		46	[1]	(13)	[1]
Net change in other current assets	10		(23)	[1]	(2)	[1]
Net change in accounts payable	(99)		7	[1]	(79)	[1]
Net change in customer deposits	(28)		24	[1]	3	[1]
Net change in other current liabilities	(66)		24	[1]	(17)	[1]
Net changes in other working capital components	(141)		36	[1]	(75)	[1]
Changes in other assets	11		(30)	[1]	4	[1]
Changes in other liabilities	(76)		(56)	[1]	29	[1]
Net cash provided by operating activities	433		573	[1]	492	[1]
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(480)		(454)	[1]	(457)	[1]
Proceeds from sale of assets	0		0	[1]	2	[1]
Decrease (increase) in notes receivable from unconsolidated affiliates, net	(4)		136	[1]	(34)	[1]
Other cash flows from investing activities	(1)		(1)	[1]	0	[1]
Net cash used in investing activities	(485)		(319)	[1]	(489)	[1]
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	0		(350)	[1]	(150)	[1]
Preferred dividends paid	(4)		(4)	[1]	(4)	[1]
Preferred dividends paid by subsidiaries	(1)		(1)	[1]	(1)	[1]
Issuances of long-term debt	0		250	[1]	0	[1]
Payments on long-term debt	(100)		0	[1]	0	[1]
Other cash flows from financing activities	0		(2)	[1]	0	[1]
Net cash provided by (used in) financing activities	(105)		(107)	[1]	(155)	[1]
Increase (decrease) in cash and cash equivalents	(157)		147	[1]	(152)	[1]
Cash and cash equivalents, beginning of period	206	[1]	59	[1]	211
Cash and cash equivalents, end of period	49		206	[1]	59	[1]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	60		61		72
Income tax payments, net of refunds	76		120		114
Acquisition of business:
Increase in capital lease obligations for investments in property, plant and equipment	29		0		0
Dividends declared but not paid	1		1		151
Pacific Enterprises and Subsidiaries | Retained Earnings
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	270		253	[1]	243	[1]
Pacific Enterprises and Subsidiaries | Total Shareholders' Equity
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	270		253	[1]	243	[1]
Southern California Gas Company and Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	274		245		231
Adjustments to reconcile net income to net cash provided by operating activities:
Utility depreciation and amortization	293		280		281
Utility gains on sale of assets	0		0		(2)
Deferred income taxes and investment tax credits	70		87		8
Other adjustments to reconcile net income to net cash provided by operating activities	8		2		5
Net changes in other working capital components (Excluding cash and cash equivalents and debt due within one year)
Net change in accounts and notes receivable	(30)		102		(31)
Net change in due to/from affiliates, net	(10)		(6)		1
Net change in interest receivable	0		0		10
Net change in income taxes, net	(2)		(67)		38
Net change in inventories	74		(69)		8
Net change in regulatory balancing accounts	10		46		(13)
Net change in other current assets	10		(23)		(2)
Net change in accounts payable	(99)		7		(79)
Net change in customer deposits	(28)		24		3
Net change in other current liabilities	(69)		24		(17)
Net changes in other working capital components	(144)		38		(82)
Changes in other assets	7		(33)		0
Changes in other liabilities	(68)		(51)		37
Net cash provided by operating activities	440		568		478
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(480)		(454)		(457)
Proceeds from sale of assets	0		0		2
Decrease (increase) in notes receivable from unconsolidated affiliates, net	(16)		136		(24)
Net cash used in investing activities	(496)		(318)		(479)
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	0		(350)		(150)
Preferred dividends paid	(1)		(1)		(1)
Issuances of long-term debt	0		250		0
Payments on long-term debt	(100)		0		0
Other cash flows from financing activities	0		(2)		0
Net cash provided by (used in) financing activities	(101)		(103)		(151)
Increase (decrease) in cash and cash equivalents	(157)		147		(152)
Cash and cash equivalents, beginning of period	206		59		211
Cash and cash equivalents, end of period	49		206		59
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	59		58		66
Income tax payments, net of refunds	76		120		114
Acquisition of business:
Increase in capital lease obligations for investments in property, plant and equipment	29		0		0
Dividends declared but not paid	0		0		150
Southern California Gas Company and Subsidiaries | Retained Earnings
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$274		$245		$231
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160).

STATEMENTS OF CONSOLIDATED COMP

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME AND CHANGES IN EQUITY (USD $)
In Millions	12 Months Ended Dec. 31, 2009		12 Months Ended Dec. 31, 2008		12 Months Ended Dec. 31, 2007
Sempra Energy Consolidated
Equity, beginning of period	$8,309	[1]	$8,587	[1]	$7,622
Net income	1,122		1,068	[1]	1,092	[1]
Comprehensive income adjustments:
Foreign currency translation adjustments	102		(140)	[1]	38	[1]
Available-for-sale securities	7		(26)	[1]	10	[1]
Pension and other postretirement benefits	(3)		(30)	[1]	15	[1]
Financial instruments	35		(30)	[1]	26	[1]
Comprehensive income (loss)	1,263		842	[1]	1,181	[1]
Adoption of new accounting principles					10	[1]
Share-based compensation expense	38		49	[1]	43	[1]
Common stock dividends declared	(383)		(342)	[1]	(326)	[1]
Preferred dividends of subsidiaries	(10)		(10)	[1]	(10)	[1]
Quasi-reorganization adjustment					(2)	[1]
Issuance of common stock	114		18	[1]	62	[1]
Tax benefit related to share-based compensation	23		6	[1]	26	[1]
Repurchases of common stock	(22)		(1,018)	[1]	(185)	[1]
Common stock released from ESOP	15		16	[1]	12	[1]
Equity contributed by noncontrolling interests	7		75	[1]	2	[1]
Distributions to noncontrolling interests	(9)
Initial consolidation of Otay Mesa VIE					152	[1]
EnergySouth acquisition			86	[1]
Purchase of noncontrolling interest in subsidiary	(94)
Equity, end of period	9,251		8,309	[1]	8,587	[1]
Sempra Energy Consolidated | Common Stock
Equity, beginning of period	2,265	[1]	3,198	[1]	3,245
Comprehensive income adjustments:
Share-based compensation expense	38		49	[1]	43	[1]
Quasi-reorganization adjustment					(2)	[1]
Issuance of common stock	114		18	[1]	62	[1]
Tax benefit related to share-based compensation	23		6	[1]	26	[1]
Repurchases of common stock	(22)		(1,018)	[1]	(185)	[1]
Common stock released from ESOP	10		12	[1]	9	[1]
Purchase of noncontrolling interest in subsidiary	(10)
Equity, end of period	2,418		2,265	[1]	3,198	[1]
Sempra Energy Consolidated | Retained Earnings
Equity, beginning of period	6,235	[1]	5,464	[1]	4,681
Net income	1,129		1,123	[1]	1,109	[1]
Comprehensive income adjustments:
Adoption of new accounting principles					10	[1]
Common stock dividends declared	(383)		(342)	[1]	(326)	[1]
Preferred dividends of subsidiaries	(10)		(10)	[1]	(10)	[1]
Equity, end of period	6,971		6,235	[1]	5,464	[1]
Sempra Energy Consolidated | Deferred Compensation Relating to ESOP
Equity, beginning of period	(18)	[1]	(22)	[1]	(25)
Comprehensive income adjustments:
Common stock released from ESOP	5		4	[1]	3	[1]
Equity, end of period	(13)		(18)	[1]	(22)	[1]
Sempra Energy Consolidated | Accumulated Other Comprehensive Income (Loss)
Equity, beginning of period	(513)	[1]	(301)	[1]	(390)
Comprehensive income adjustments:
Foreign currency translation adjustments	102		(140)	[1]	38	[1]
Available-for-sale securities	7		(26)	[1]	10	[1]
Pension and other postretirement benefits	(3)		(30)	[1]	15	[1]
Financial instruments	38		(16)	[1]	26	[1]
Comprehensive income (loss)	144		(212)	[1]	89	[1]
Equity, end of period	(369)		(513)	[1]	(301)	[1]
Sempra Energy Consolidated | Total Shareholders' Equity
Equity, beginning of period	7,969	[1]	8,339	[1]	7,511
Net income	1,129		1,123	[1]	1,109	[1]
Comprehensive income adjustments:
Foreign currency translation adjustments	102		(140)	[1]	38	[1]
Available-for-sale securities	7		(26)	[1]	10	[1]
Pension and other postretirement benefits	(3)		(30)	[1]	15	[1]
Financial instruments	38		(16)	[1]	26	[1]
Comprehensive income (loss)	1,273		911	[1]	1,198	[1]
Adoption of new accounting principles					10	[1]
Share-based compensation expense	38		49	[1]	43	[1]
Common stock dividends declared	(383)		(342)	[1]	(326)	[1]
Preferred dividends of subsidiaries	(10)		(10)	[1]	(10)	[1]
Quasi-reorganization adjustment					(2)	[1]
Issuance of common stock	114		18	[1]	62	[1]
Tax benefit related to share-based compensation	23		6	[1]	26	[1]
Repurchases of common stock	(22)		(1,018)	[1]	(185)	[1]
Common stock released from ESOP	15		16	[1]	12	[1]
Purchase of noncontrolling interest in subsidiary	(10)
Equity, end of period	9,007		7,969	[1]	8,339	[1]
Sempra Energy Consolidated | Noncontrolling Interests
Equity, beginning of period	340	[1]	248	[1]	111
Net income	(7)		(55)	[1]	(17)	[1]
Comprehensive income adjustments:
Financial instruments	(3)		(14)	[1]
Comprehensive income (loss)	(10)		(69)	[1]	(17)	[1]
Equity contributed by noncontrolling interests	7		75	[1]	2	[1]
Distributions to noncontrolling interests	(9)
Initial consolidation of Otay Mesa VIE					152	[1]
EnergySouth acquisition			86	[1]
Purchase of noncontrolling interest in subsidiary	(84)
Equity, end of period	244		340	[1]	248	[1]
San Diego Gas and Electric Company and Subsidiary
Equity, beginning of period	2,670	[1]	2,335	[1]	1,915
Net income	373		290	[1]	271	[1]
Comprehensive income adjustments:
Pension and other postretirement benefits	2		3	[1]	4	[1]
Financial instruments	(2)		(14)	[1]	(1)	[1]
Comprehensive income (loss)	373		279	[1]	274	[1]
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared	(150)
Preferred stock dividends declared	(5)		(5)	[1]	(5)	[1]
Equity contributed by noncontrolling interests	6		61	[1]
Distributions to noncontrolling interests	(9)
Initial consolidation of Otay Mesa VIE					152	[1]
Equity, end of period	2,885		2,670	[1]	2,335	[1]
San Diego Gas and Electric Company and Subsidiary | Common Stock
Equity, beginning of period	1,138	[1]	1,138	[1]	1,138
Comprehensive income adjustments:
Equity, end of period	1,138		1,138	[1]	1,138	[1]
San Diego Gas and Electric Company and Subsidiary | Retained Earnings
Equity, beginning of period	1,417	[1]	1,078	[1]	796
Net income	349		344	[1]	288	[1]
Comprehensive income adjustments:
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared	(150)
Preferred stock dividends declared	(5)		(5)	[1]	(5)	[1]
Equity, end of period	1,611		1,417	[1]	1,078	[1]
San Diego Gas and Electric Company and Subsidiary | Accumulated Other Comprehensive Income (Loss)
Equity, beginning of period	(13)	[1]	(16)	[1]	(19)
Comprehensive income adjustments:
Pension and other postretirement benefits	2		3	[1]	4	[1]
Financial instruments	1				(1)	[1]
Comprehensive income (loss)	3		3	[1]	3	[1]
Equity, end of period	(10)		(13)	[1]	(16)	[1]
San Diego Gas and Electric Company and Subsidiary | Total Shareholders' Equity
Equity, beginning of period	2,542	[1]	2,200	[1]	1,915
Net income	349		344	[1]	288	[1]
Comprehensive income adjustments:
Pension and other postretirement benefits	2		3	[1]	4	[1]
Financial instruments	1				(1)	[1]
Comprehensive income (loss)	352		347	[1]	291	[1]
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared	(150)
Preferred stock dividends declared	(5)		(5)	[1]	(5)	[1]
Equity, end of period	2,739		2,542	[1]	2,200	[1]
San Diego Gas and Electric Company and Subsidiary | Noncontrolling Interests
Equity, beginning of period	128	[1]	135	[1]	0
Net income	24		(54)	[1]	(17)	[1]
Comprehensive income adjustments:
Financial instruments	(3)		(14)	[1]
Comprehensive income (loss)	21		(68)	[1]	(17)	[1]
Equity contributed by noncontrolling interests	6		61	[1]
Distributions to noncontrolling interests	(9)
Initial consolidation of Otay Mesa VIE					152	[1]
Equity, end of period	146		128	[1]	135	[1]
Pacific Enterprises and Subsidiaries
Equity, beginning of period	1,960	[1]	1,936	[1]	1,950
Net income	270		253	[1]	243	[1]
Comprehensive income adjustments:
Pension and other postretirement benefits			1	[1]
Financial instruments	3		(25)	[1]	1	[1]
Comprehensive income (loss)	273		229	[1]	244	[1]
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared			(200)	[1]	(250)	[1]
Preferred stock dividends declared	(4)		(4)	[1]	(4)	[1]
Preferred dividends of subsidiaries	(1)		(1)	[1]	(1)	[1]
Quasi-reorganization adjustment					(2)	[1]
Equity, end of period	2,228		1,960	[1]	1,936	[1]
Pacific Enterprises and Subsidiaries | Preferred Stock
Equity, beginning of period	80	[1]	80	[1]	80
Comprehensive income adjustments:
Equity, end of period	80		80	[1]	80	[1]
Pacific Enterprises and Subsidiaries | Common Stock
Equity, beginning of period	1,462	[1]	1,462	[1]	1,464
Comprehensive income adjustments:
Quasi-reorganization adjustment					(2)	[1]
Equity, end of period	1,462		1,462	[1]	1,462	[1]
Pacific Enterprises and Subsidiaries | Retained Earnings
Equity, beginning of period	426	[1]	378	[1]	391
Net income	270		253	[1]	243	[1]
Comprehensive income adjustments:
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared			(200)	[1]	(250)	[1]
Preferred stock dividends declared	(4)		(4)	[1]	(4)	[1]
Preferred dividends of subsidiaries	(1)		(1)	[1]	(1)	[1]
Equity, end of period	691		426	[1]	378	[1]
Pacific Enterprises and Subsidiaries | Accumulated Other Comprehensive Income (Loss)
Equity, beginning of period	(28)	[1]	(4)	[1]	(5)
Comprehensive income adjustments:
Pension and other postretirement benefits			1	[1]
Financial instruments	3		(25)	[1]	1	[1]
Comprehensive income (loss)	3		(24)	[1]	1	[1]
Equity, end of period	(25)		(28)	[1]	(4)	[1]
Pacific Enterprises and Subsidiaries | Total Shareholders' Equity
Equity, beginning of period	1,940	[1]	1,916	[1]	1,930
Net income	270		253	[1]	243	[1]
Comprehensive income adjustments:
Pension and other postretirement benefits			1	[1]
Financial instruments	3		(25)	[1]	1	[1]
Comprehensive income (loss)	273		229	[1]	244	[1]
Adoption of new accounting principles					(1)	[1]
Common stock dividends declared			(200)	[1]	(250)	[1]
Preferred stock dividends declared	(4)		(4)	[1]	(4)	[1]
Preferred dividends of subsidiaries	(1)		(1)	[1]	(1)	[1]
Quasi-reorganization adjustment					(2)	[1]
Equity, end of period	2,208		1,940	[1]	1,916	[1]
Pacific Enterprises and Subsidiaries | Noncontrolling Interests
Equity, beginning of period	20	[1]	20	[1]	20
Comprehensive income adjustments:
Equity, end of period	20		20	[1]	20	[1]
Southern California Gas Company and Subsidiaries
Equity, beginning of period	1,490		1,470		1,490
Net income	274		245		231
Comprehensive income adjustments:
Pension and other postretirement benefits			1
Financial instruments	3		(25)		1
Comprehensive income (loss)	277		221		232
Adoption of new accounting principles					(1)
Common stock dividends declared			(200)		(250)
Preferred stock dividends declared	(1)		(1)		(1)
Equity, end of period	1,766		1,490		1,470
Southern California Gas Company and Subsidiaries | Preferred Stock
Equity, beginning of period	22		22		22
Comprehensive income adjustments:
Equity, end of period	22		22		22
Southern California Gas Company and Subsidiaries | Common Stock
Equity, beginning of period	866		866		866
Comprehensive income adjustments:
Equity, end of period	866		866		866
Southern California Gas Company and Subsidiaries | Retained Earnings
Equity, beginning of period	630		586		607
Net income	274		245		231
Comprehensive income adjustments:
Adoption of new accounting principles					(1)
Common stock dividends declared			(200)		(250)
Preferred stock dividends declared	(1)		(1)		(1)
Equity, end of period	903		630		586
Southern California Gas Company and Subsidiaries | Accumulated Other Comprehensive Income (Loss)
Equity, beginning of period	(28)		(4)		(5)
Comprehensive income adjustments:
Pension and other postretirement benefits			1
Financial instruments	3		(25)		1
Comprehensive income (loss)	3		(24)		1
Equity, end of period	($25)		($28)		($4)
[1]As adjusted for the retrospective adoption of ASC 810 (SFAS 160).

PRINCIPLES OF CONSOLIDATION

PRINCIPLES OF CONSOLIDATION
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Principles of Consolidation, Basis of Presentation and Use of Estimates in the Preparation of the Financial Statements Disclosure	SEMPRA ENERGY AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SIGNIFICANT ACCOUNTING POLICIES AND OTHER FINANCIAL DATA Principles of ConsolidationSempra EnergySempra Energy's Consolidated Financial Statements include the accounts of Sempra Energy, a California-based Fortune 500 holding company, its consolidated subsidiaries, and variable interest entities. Sempra Energys principal subsidiaries are San Diego Gas Electric Company (SDGE) and Southern California Gas Company (SoCalGas), which we collectively refer to as the Sempra Utilities; and Sempra Global, which is the holding company for Sempra Commodities, Sempra Generation, Sempra Pipelines Storage, Sempra LNG and other, smaller businesses. Sempra Energy uses the equity method to account for investments in affiliated companies over which we have the ability to exercise significant influence, but not control. We discuss our investments in unconsolidated subsidiaries in Notes 3 and 4. SDGESDGE's Consolidated Financial Statements include its accounts, the accounts of its sole subsidiary, SDGE Funding LLC, and the accounts of Otay Mesa Energy Center LLC (Otay Mesa VIE) and Orange Grove Energy L.P. (Orange Grove VIE), which are variable interest entities of which SDGE is the primary beneficiary, as discussed below under "Variable Interest Entities." SDGEs common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra Energy. The activities of SDGE Funding LLC were substantially complete in 2007, and the entity was dissolved in 2008. Pacific Enterprises and SoCalGasThe Consolidated Financial Statements of Pacific Enterprises include the accounts of Pacific Enterprises (PE) and its subsidiary, SoCalGas. Sempra Energy owns all of PEs common stock and PE owns all of SoCalGas common stock. SoCalGas Consolidated Financial Statements include its subsidiaries, which comprise less than one percent of its consolidated financial position and results of operations. PE's operations consist solely of those of SoCalGas and additional items (e.g., cash, intercompany accounts and equity) attributable to serving as a holding company for SoCalGas.Basis of PresentationThis is a combined report of Sempra Energy, SDGE, PE and SoCalGas. We provide separate information for SDGE, PE and SoCalGas as required. When only information for SoCalGas is provided, it is the same for PE. References in this report to "we," "our" and "Sempra Energy Consolidated" are to Sempra Energy and its consolidated entities, unless otherwise indicated by the context. We have eliminated intercompany accounts and transactions within each set of consolidated financial statements.We evaluated events and transactions that occurred after December 31, 2009 through the date the financial statements were issued, and in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation. Use of Estimates in the Preparation of the Financial Statements We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). This requires us to make estimates and assumptions that affect the

QUASI-REORGANIZATION

QUASI-REORGANIZATION
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Quasi-reorganization and Dividends and Loans at the Sempra Utilities Disclosure	Quasi-ReorganizationIn 1993, PE effected a quasi-reorganization for financial reporting purposes as of December 31, 1992. A quasi-reorganization permits a company, for accounting purposes, to adjust its financial statements and proceed on much the same basis as if it had been legally reorganized. In 2007, an adjustment to liabilities related to the quasi-reorganization resulted in a decrease to equity. We expect to resolve the remaining liabilities of $4 million in 2010. We believe the provisions established for these matters are adequate. Dividends and Loans at the Sempra Utilities The CPUC's regulation of the Sempra Utilities' capital structures limits the amounts that are available for dividends and loans to Sempra Energy. At December 31, 2009, Sempra Energy could have received combined loans and dividends of approximately $140 million from SoCalGas and $75 million from SDGE.

REGULATORY MATTERS

REGULATORY MATTERS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Regulatory Matters Disclosure	REGULATORY MATTERS Effects of Regulation The accounting policies of our principal regulated utility subsidiaries, SDGE and SoCalGas, conform with GAAP for regulated enterprises and reflect the policies of the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC). The Sempra Utilities prepare their financial statements in accordance with GAAP provisions governing regulated operations. Under these provisions, a regulated utility records a regulatory asset if it is probable that, through the ratemaking process, the utility will recover that asset from customers. To the extent that recovery is no longer probable as a result of changes in regulation or the utility's competitive position, the related regulatory assets are written off. Regulatory liabilities represent amounts collected from customers in advance of the actual expenditure by the utility. If the actual expenditures are less than amounts previously collected from ratepayers, the excess would be refunded to customers, generally by reducing future rates. The following subsidiaries of Sempra Pipelines Storage also apply GAAP for regulated utilities to their operations: Mobile Gas Service Corporation (Mobile Gas), a small regulated natural gas distribution utility in Southwest Alabama acquired in October 2008 Ecogas Mexico, S de RL de CV (Ecogas), a small regulated natural gas distribution utility in Northern Mexico We provide information concerning regulatory assets and liabilities below in "Regulatory Balancing Accounts" and "Regulatory Assets and Liabilities." Regulatory Balancing Accounts The following table summarizes our regulatory balancing accounts at December 31. The net payables (payables net of receivables) will be returned to customers by reducing future rates. SUMMARY OF REGULATORY BALANCING ACCOUNTS AT DECEMBER 31 (Dollars in millions) Sempra Energy Consolidated SDGE SoCalGas 2009 2008 2009 2008 2009 2008 Overcollected $ 699 $ 728 $ 383 $ 364 $ 316 $ 364 Undercollected (317) (393) (224) (250) (93) (143) Net payable $ 382 $ 335 $ 159 $ 114 $ 223 $ 221 Over- and undercollected regulatory balancing accounts reflect the difference between customer billings and recorded or CPUC-authorized costs, primarily commodity costs. Amounts in the balancing accounts are recoverable or refundable in future rates, subject to CPUC approval. Balancing account treatment eliminates the impact on earnings from variances in the covered costs from authorized amounts. Absent balancing account treatment, variations in operating and maintenance costs from amounts approved by the CPUC would increase volatility in utility earnings. We provide additional information about regulatory matters in Notes 15 and 16. Regulatory Assets and LiabilitiesWe show the details of regulatory assets and liabilities in the following table, and discuss each of them separately below. REGULATORY ASSETS (LIABILITIES) AT DECEMBER 31 (Dollars in millions) 2009 2008 SDGE Fixed-price contracts and other derivatives $ 271 $ 358 Deferred taxes recoverable in rates 415 369 Pension and other postretirement benefit obligations 342 393 Remov

FAIR VALUE MEASUREMENTS POLICY

FAIR VALUE MEASUREMENTS POLICY
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Fair Value Measurements Accounting Policy Disclosure	Fair Value MeasurementsWe apply recurring fair value measurements to certain assets and liabilities, primarily nuclear decommissioning trusts, marketable securities and other miscellaneous derivatives. Prior to the formation of RBS Sempra Commodities LLP (RBS Sempra Commodities) on April 1, 2008, as we discuss in Notes 3 and 4, we also applied fair value measurements to trading derivatives and certain trading inventories. "Fair value" is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). A fair value measurement reflects the assumptions market participants would use in pricing an asset or liability based on the best available information. These assumptions include the risk inherent in a particular valuation technique (such as a pricing model) and the risks inherent in the inputs to the model. Also, we consider an issuer's credit standing when measuring liabilities at fair value.We establish a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 financial instruments primarily consist of exchange-traded derivatives, listed equities and U.S. government treasury securities.Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including: quoted forward prices for commodities time value current market and contractual prices for the underlying instruments volatility factors other relevant economic measures Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Our financial instruments in this category include non-exchange-traded derivatives such as over-the-counter (OTC) forwards and options.Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value from the perspective of a market participant. As a result of implementing new accounting standards in 2007 related to fair value measurement, we recorded a transition adjustment gain of $12 million to Sempra Energy's beginn

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Cash and Cash Equivalents Disclosure	Cash and Cash EquivalentsCash equivalents are highly liquid investments with maturities of three months or less at the date of purchase. Restricted Cash Restricted cash at Sempra Energy was $35 million in 2009 and $27 million in 2008 at December 31. In 2009 and 2008, $27 million of restricted cash represents funds held in trust for construction financing of certain natural gas storage facilities of Sempra Pipelines Storage. SDGE had $8 million of restricted cash at December 31, 2009, which represents funds held by a trustee for Otay Mesa VIE to pay certain operating costs.

COLLECTION ALLOWANCES

COLLECTION ALLOWANCES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Collection Allowances Disclosure	Collection Allowances We record allowances for the collection of receivables and, prior to the sale of our commodities-marketing businesses, realization of trading assets (discussed below under "Trading Instruments"). The allowances for collection of receivables include allowances for doubtful customer accounts and for other receivables. The changes in allowances for collection of receivables and realization of trading assets are shown in the table below: COLLECTION ALLOWANCES (Dollars in millions) Years ended December 31, 2009 2008 2007 Sempra Energy Consolidated Allowances for collection of receivables at January 1 $ 29 $ 16 $ 15 Provisions for uncollectible accounts 25 36 20 Write-offs of uncollectible accounts (27) (25) (19) Acquisition of EnergySouth (see Note 3) - 2 - Allowances for collection of receivables at December 31 $ 27 $ 29 $ 16 Allowance for realization of trading assets at January 1 $ - $ 48 $ 53 Provisions for (recovery of) uncollectible accounts - 42 (2) Write-offs of uncollectible accounts - - (3) Sale of commodities-marketing businesses (see Note 3) - (90) - Allowance for realization of trading assets at December 31 $ - $ - $ 48 SDGE Allowances for collection of receivables at January 1 $ 6 $ 5 $ 5 Provisions for uncollectible accounts 8 12 8 Write-offs of uncollectible accounts (10) (11) (8) Allowances for collection of receivables at December 31 $ 4 $ 6 $ 5 SoCalGas Allowances for collection of receivables at January 1 $ 18 $ 9 $ 8 Provisions for uncollectible accounts 12 23 12 Write-offs of uncollectible accounts (14) (14) (11) Allowances for collection of receivables at December 31 $ 16 $ 18 $ 9

TRADING INSTRUMENTS

TRADING INSTRUMENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Trading Instruments Disclosure	Trading Instruments Trading SecuritiesIn the first quarter of 2008, Sempra Commodities recorded $2 million of pretax losses related to trading securities, including a pretax gain of $3 million resulting from sales and an unrealized pretax loss of $5 million related to securities held at March 31, 2008. In 2007, Sempra Commodities recorded $14 million of pretax gains related to trading securities, including a pretax gain of $6 million resulting from sales, an unrealized pretax gain of $8 million from transfers to trading securities from available-for-sale securities due to changes in their status, and unrealized pretax loss of a negligible amount related to securities held at December 31, 2007.

INVENTORIES

INVENTORIES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Inventories Disclosure	Inventories The Sempra Utilities value natural gas inventory by the last-in first-out (LIFO) method. As inventories are sold, differences between the LIFO valuation and the estimated replacement cost are reflected in customer rates. Materials and supplies at the Sempra Utilities are generally valued at the lower of average cost or market.At December 31, 2009 and 2008, Sempra Pipelines Storage had $5 million and $39 million, respectively, of natural gas inventory recorded at lower of average cost or market, and Sempra LNG had $19 million and $17 million, respectively, of LNG inventory (categorized as natural gas below) valued by the first-in first-out method. INVENTORY BALANCES AT DECEMBER 31 (Dollars in millions) Sempra Energy Consolidated SDGE SoCalGas 2009 2008 2009 2008 2009 2008 Natural gas $ 93 $ 201 $ - $ - $ 69 $ 143 Materials and supplies 104 119 61 62 24 24 Total $ 197 $ 320 $ 61 $ 62 $ 93 $ 167

INCOME TAXES POLICY

INCOME TAXES POLICY
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Income Taxes Accounting Policy Disclosure	Income TaxesIncome tax expense includes current and deferred income taxes from operations during the year. We record deferred income taxes for temporary differences between the book and the tax bases of assets and liabilities. Investment tax credits from prior years are amortized to income by the Sempra Utilities over the estimated service lives of the properties as required by the CPUC, and represent regulatory liabilities. At Sempra Global and Parent, investment tax credits and other credits, mainly low-income housing and synthetic fuels tax credits in 2007, are recognized in income as earned. The Sempra Utilities and Mobile Gas recognize regulatory assets to offset deferred tax liabilities if it is probable that the amounts will be recovered from customers; and regulatory liabilities to offset deferred tax assets if it is probable that the amounts will be returned to customers. We currently do not record deferred income taxes for undistributed earnings of our non-U.S. subsidiaries. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position we take has to have at least a "more likely than not" chance of being sustained (based on the positions technical merits) upon challenge by the respective authorities. The term "more likely than not" means a likelihood of more than 50 percent. Otherwise, we may not recognize any of the potential tax benefit associated with the position. We recognize a benefit for a tax position that meets the "more likely than not" criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution.Unrecognized tax benefits involve managements judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows. We provide additional information about income taxes in Note 8.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Property, Plant and Equipment Disclosure	Property, Plant and Equipment Property, plant and equipment primarily represents the buildings, equipment and other facilities used by the Sempra Utilities to provide natural gas and electric utility services, and by Sempra Generation, Sempra LNG and Sempra Pipelines Storage. It also reflects projects included in construction work in progress at these business units. Our plant costs include labor materials and contract services expenditures for replacement parts incurred during a major maintenance outage of a generating plant In addition, the cost of our utility plant includes an allowance for funds used during construction (AFUDC). We discuss AFUDC below. The cost of non-utility plant includes capitalized interest.Maintenance costs are expensed as incurred. The cost of most retired depreciable utility plant minus salvage value is charged to accumulated depreciation. PROPERTY, PLANT AND EQUIPMENT BY MAJOR FUNCTIONAL CATEGORY (Dollars in millions) Property, Plant Depreciation rates for and Equipment at years ended December 31, December 31, 2009 2008 2009 2008 2007 SDGE: Natural gas operations $ 1,204 $ 1,150 2.84 % 2.80 % 3.43 % Electric distribution 4,425 4,183 3.97 3.95 4.15 Electric transmission 1,662 1,533 2.67 2.67 2.84 Electric generation 1,503 863 3.84 3.77 3.67 Other electric(1) 613 483 8.50 8.13 8.50 Construction work in progress 749 883 NA NA NA Total SDGE 10,156 9,095 SoCalGas: Natural gas operations(2) 8,911 8,500 3.50 3.49 3.63 Other non-utility 114 110 1.41 1.55 4.28 Construction work in progress 272 204 NA NA NA Total SoCalGas 9,297 8,814 Sempra Global and parent(3): Estimated Useful Lives Land and land rights 189 157 25 to 50 years(4) Machinery and equipment: Generating plants 1,457 1,399 4 to 35 years LNG(5) receipt terminals 2,033 958 5 to 50 years Pipelines and storage 942 775 10 to 50 years Other 136 79 2 to 50 years Construction work in progress: LNG facilities 27 915 NA Other 534 737 NA Other(6) 263 224 3 to 50 years 5,581 5,244 Total Sempra Energy Consolidated $ 25,034 $ 23,153 (1) Includes capital lease assets of $21 million at December 31, 2009. (2) Includes capital lease assets of $29 million at December 31, 2009. (3) December 31, 2009 balances include $150 million and $125 million of utility plant, primarily pipelines and storage, at Mobile Gas and Ecogas, respectively. December 31, 2008 balances include $142 million and $116 million of utility plant, primarily pipelines and storage, at Mobile Gas and Ecogas, respectively. (4) Estimated useful lives are for land rights. (5) Liquefied natural gas. (6) Includes $2 million at both December 31, 2009 and 2008 for PE. Depreciation expense is based on the straight-line method over the useful lives of the assets or, for the Sempra Utilities, a shorter period prescribed by the CPUC. Depreciation expense is computed using the straight-line method over the asset's estimated original composite useful life or the remaining term of the site leases, whichever is shorter. The accumula

LONG-LIVED ASSETS

LONG-LIVED ASSETS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Assets Held for Sale and Long-lived Assets Disclosure	Assets Held for SaleWe classify assets as held for sale when management approves and commits to a formal plan to actively market an asset for sale and we expect the sale to close within the next twelve months. Upon classifying an asset as held for sale, we record the asset at the lower of its carrying value or its estimated fair value reduced for selling costs. We cease to record depreciation expense on an asset when it is classified as held for sale.During 2008, management approved and committed to a formal plan to dispose of certain Sempra Generation assets, recorded at December 31, 2009 and 2008 as follows: (Dollars in millions) Gas turbine $ 34 Steam turbine 6 Emission reduction credits 1 $ 41 We classified these assets as held for sale as of December 31, 2009 and 2008. They are included in Other Current Assets on the Consolidated Balance Sheets. For the years ended December 31, 2009 and 2008, there was no impairment of the assets held for sale nor do the assets held for sale generate operating income. We continue to evaluate the assets in our total portfolio for whether events or circumstances have occurred that may affect recoverability or estimated useful life, and continue to pursue disposal of our assets held for sale. Long-Lived Assets We periodically evaluate whether events or circumstances have occurred that may affect the recoverability or the estimated useful lives of long-lived assets, the definition of which includes intangible assets subject to amortization, but does not include unconsolidated subsidiaries. Impairment of long-lived assets occurs when the estimated future undiscounted cash flows are less than the carrying amount of the assets. If that comparison indicates that the assets' carrying value may not be recoverable, the impairment is measured based on the difference between the carrying amount and the fair value of the assets. This evaluation is performed at the lowest level for which separately identifiable cash flows exist. In the second quarter of 2009, we recorded a $132 million pretax write-off related to certain assets at one of Sempra Pipelines Storages Liberty Gas Storage natural gas storage projects. This amount is recorded as Write-off of Long-lived Assets on our Consolidated Statement of Operations for the year ended December 31, 2009. Sempra Pipelines Storage owns 75 percent of the partnership that is developing the project. Our partner's 25-percent share of the pretax charge is $33 million, which is included in (Earnings) Losses Attributable to Noncontrolling Interests on our Consolidated Statement of Operations for the year ended December 31, 2009. The impact to our net income and to our earnings is $97 million and $64 million, respectively, for the year ended December 31, 2009. In September 2009, the members of the partnership unanimously voted to proceed with the abandonment of the assets that were written off.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Goodwill and Other Intangible Assets Disclosure	Goodwill and other Intangible AssetsGoodwillGoodwill is the excess of the purchase price over the fair value of the net assets of acquired companies. Goodwill is not amortized but is tested annually on October 1 for impairment. Impairment of goodwill occurs when the carrying amount (book value) of goodwill exceeds its implied fair value.If the book value of goodwill is greater than the fair value on the test date, an impairment loss is recorded. In connection with the acquisition of EnergySouth in October 2008, which we discuss in Note 3, Sempra Pipelines Storage initially recorded goodwill of $67 million, which was reduced to $62 million by purchase price adjustments in 2009.Goodwill included in Goodwill and Other Intangible Assets on the Sempra Energy Consolidated Balance Sheets is recorded as follows: GOODWILL (Dollars in millions) December 31, December 31, 2009 2008 Sempra Pipelines Storage $ 62 $ 67 Parent and Other 6 6 $ 68 $ 73 We provide additional information concerning goodwill related to our equity method investments and the impairment of investments in unconsolidated subsidiaries in Note 4.Other Intangible AssetsSempra Pipelines Storage recorded $460 million of intangible assets in connection with the acquisition of EnergySouth. These intangible assets represent storage and development rights related to the Bay Gas and Mississippi Hub natural gas storage facilities and were recorded at estimated fair value as of the date of the acquisition using discounted cash flows analysis. Our important assumptions in determining fair value include estimated future cash flows, the estimated useful life of the intangible assets and our use of appropriate discount rates. We are amortizing these intangible assets over their estimated useful lives as shown in the table below. Intangible assets included in Goodwill and Other Intangible Assets on the Sempra Energy Consolidated Balance Sheets are recorded as follows: OTHER INTANGIBLE ASSETS (Dollars in millions) Amortization period December 31, December 31, (years) 2009 2008 Storage rights 46 $ 138 $ 138 Development rights 50 322 322 Other 15 years to indefinite 9 9 Total 469 469 Less accumulated amortization (13) (3) Total $ 456 $ 466 Amortization expense related to the above intangible assets was $10 million in 2009, $3 million in 2008 and a negligible amount in 2007. We estimate the aggregate amortization expense for the next five years to be $10 million per year.

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Variable Interest Entities Disclosure	Variable Interest EntitiesWe consolidate a variable interest entity (VIE) if we are the primary beneficiary of the VIEs activities. Our determination of whether we are the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE; the nature of the VIE's risks and the risks we absorb; and whether the variable interest holders will absorb a majority of the VIE's expected losses or receive a majority of its expected residual returns (or both). Otay Mesa VIESDGE has a 10-year agreement to purchase power to be generated at the Otay Mesa Energy Center (OMEC), a 573-megawatt (MW) generating facility that began commercial operations in October 2009. SDGE supplies all of the natural gas to fuel the power plant and purchases its electric generation output (i.e., tolling). The agreement provides SDGE with the option to purchase the power plant at the end of the contract term in 2019, or upon earlier termination of the purchased-power agreement, at a predetermined price subject to adjustments based on performance of the facility. If SDGE does not exercise its option, under certain circumstances, it may be required to purchase the power plant at a predetermined price. The facility owner, Otay Mesa Energy Center LLC (OMEC LLC), is a VIE (Otay Mesa VIE), of which SDGE is the primary beneficiary. SDGE has no OMEC LLC voting rights and does not operate OMEC.Based upon our analysis, SDGE absorbs the majority of risk from Otay Mesa VIE under the combination of the tolling agreement and the put option. Accordingly, Sempra Energy and SDGE have consolidated Otay Mesa VIE since the second quarter of 2007. The CPUC has approved an additional financial return to SDGE to compensate it for the effect on its financial ratios from the requirement to consolidate Otay Mesa VIE. Otay Mesa VIE's equity of $146 million and $128 million is included on the Consolidated Balance Sheets in Other Noncontrolling Interests for Sempra Energy and in Noncontrolling Interests for SDGE at December 31, 2009 and 2008, respectively.OMEC LLC has a loan outstanding of $375 million at December 31, 2009, the proceeds of which were used for the construction of OMEC. The loan is with third party lenders and is secured by property, plant and equipment. SDGE is not a party to the loan agreement and does not have any additional implicit or explicit financial responsibility to Otay Mesa VIE. The loan matures in April2019 and bears interest at rates varying with market rates. In addition, OMEC LLC has entered into interest-rate swap agreements to moderate its exposure to interest-rate changes. We provide additional information concerning the interest-rate swaps in Note 11. Orange Grove VIESDGE has a 25-year agreement to purchase power to be generated by Orange Grove Energy L.P. (Orange Grove), at its 94-MW generating facility located in San Diego County, California. The facility is currently under construction, and we expect it to be available for commercial operation during the second quarter of 2010. Orange Grove is a VIE (Orange Grove VIE) of which SDGE is the primary beneficiary. During the third quarter of 2009, all of the conditi

ASSET RETIREMENT OBLIGATIONS

ASSET RETIREMENT OBLIGATIONS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Asset Retirement Obligations Disclosure	Asset Retirement ObligationsFor tangible long-lived assets, we record asset retirement obligations for the present value of liabilities of future costs expected to be incurred when assets are retired from service, if the retirement process is legally required and if a reasonable estimate of fair value can be made. We record the estimated retirement cost over the life of the related asset by depreciating the present value of the obligation (measured at the time of the asset's acquisition) and accreting the discount until the liability is settled. Rate-regulated entities record regulatory assets or liabilities as a result of the timing difference between the recognition of costs in accordance with GAAP and costs recovered through the rate-making process. We have recorded a regulatory liability to show that the Sempra Utilities have collected funds from customers more quickly and for larger amounts than we would accrete the retirement liability and depreciate the asset in accordance with GAAP. We have recorded asset retirement obligations related to various assets including:SDGE and SoCalGas fuel and storage tanks natural gas distribution system hazardous waste storage facilities asbestos-containing construction materials SDGE decommissioning of nuclear power facilities electric distribution and transmission systems site restoration of a former power plant SoCalGas natural gas transmission pipeline underground natural gas storage facilities and wells Sempra Global certain power generation plants (natural gas and solar) natural gas distribution and transportation systems LNG receipt terminal The changes in asset retirement obligations are as follows: CHANGES IN ASSET RETIREMENT OBLIGATIONS (Dollars in millions) Sempra Energy Consolidated SDGE SoCalGas 2009 2008 2009 2008 2009 2008 Balance as of January 1(1) $ 1,177 $ 1,158 $ 554 $ 568 $ 595 $ 577 Accretion expense 75 74 38 37 35 36 Liabilities incurred 17 7 - - - - Payments (5) (11) (3) (10) (2) (1) Revisions to estimated cash flows 49 (57) 1 (41) 48 (17) Acquisition of EnergySouth (see Note 3) - 6 - - - - Balance as of December 31(1) $ 1,313 $ 1,177 $ 590 $ 554 $ 676 $ 595 (1) The current portions of the obligations are included in Other Current Liabilities on the Consolidated Balance Sheets. SONGS DecommissioningObjectives, work scope, and procedures for the dismantling and decontamination of the SONGS' units must meet the requirements of the Nuclear Regulatory Commission (NRC), the Environmental Protection Agency (EPA), the U.S. Department of the Navy (the land owner), the CPUC and other regulatory bodies.SDGE's asset retirement obligation related to decommissioning costs for the SONGS units was $474 million at December 31, 2009. That amount includes the cost to decommission Units 2 and 3, and the remaining cost to complete the decommissioning of Unit 1, which is currently in progress. Southern California Edison (Edison), the operator of SONGS, updates decommissioning cost studies every three years. Rate recovery of decommissioning costs is allowed until the time that the costs are fully recovered and is sub

CONTINGENCIES POLICY

CONTINGENCIES POLICY
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Contingencies Accounting Policy Disclosure	ContingenciesWe accrue losses for the estimated impacts of various conditions, situations or circumstances involving uncertain outcomes. For loss contingencies, we accrue the loss if an event has occurred on or before the balance sheet date and: Information available through the date we file our financial statements indicates it is probable that a loss has been incurred, given the likelihood of uncertain future events, and the amounts of the loss can be reasonably estimated. We do not accrue contingencies that might result in gains. We continuously assess contingencies for litigation claims, environmental remediation and other events.

LEGAL FEES

LEGAL FEES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Legal Fees Accounting Policy Disclosure	Legal FeesLegal fees that are associated with a past event for which a liability has been recorded are accrued when it is probable that fees also will be incurred.

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Comprehensive Income Disclosure	Comprehensive IncomeComprehensive income includes all changes in the equity of a business enterprise (except those resulting from investments by owners and distributions to owners), including: foreign-currency translation adjustments amortization of net actuarial gain or loss and prior service cost related to pension and other postretirement benefits plans unrealized gains or losses on available-for-sale securities certain hedging activities The Statements of Consolidated Comprehensive Income and Changes in Equity show the changes in the components of other comprehensive income (OCI), including the amounts attributable to noncontrolling interests. The components of Accumulated Other Comprehensive Income (Loss) (AOCI), shown net of income taxes on the Consolidated Balance Sheets, and the related income tax balance at December 31, 2009 and 2008 are as follows: ACCUMULATED OTHER COMPRENSIVE INCOME (LOSS) AND ASSOCIATED INCOME TAX EXPENSE (BENEFIT) (Dollars in millions) Accumulated Other Comprehensive Income (Loss) Income Tax Expense (Benefit) 2009 2008 2009 2008 Sempra Energy Consolidated Foreign currency translation loss $ (276) $ (378) $ - $ - Financial instruments (2) (40) (3) (25) Unrealized gains on available-for-sale securities 9 2 3 1 Unamortized net actuarial loss (102) (99) (70) (68) Unamortized prior service credit 2 2 1 2 Balance as of December 31 $ (369) $ (513) $ (69) $ (90) SDGE Unamortized net actuarial loss $ (11) $ (13) $ (7) $ (8) Unamortized prior service credit 1 1 1 1 Financial instruments - (1) - (1) Balance as of December 31 $ (10) $ (13) $ (6) $ (8) SoCalGas Unamortized net actuarial loss $ (5) $ (5) $ (4) $ (4) Unamortized prior service credit 1 1 1 1 Financial instruments (21) (24) (14) (16) Balance as of December 31 $ (25) $ (28) $ (17) $ (19)

REVENUES

REVENUES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Revenues Disclosure	REVENUESSempra UtilitiesThe Sempra Utilities generate revenues primarily from deliveries to their customers of electricity by SDGE and natural gas by both SoCalGas and SDGE, and from related services. They record these revenues under the accrual method and recognize them upon delivery and performance. They also record revenue from CPUC-approved incentive awards, some of which require approval by the CPUC prior to being recognized. We provide additional discussion on utility incentive mechanisms in Note 16.Under an operating agreement with the California Department of Water Resources (DWR), SDGE acts as a limited agent on behalf of the DWR in the administration of energy contracts, including natural gas procurement functions under the DWR contracts allocated to SDGE's customers. The legal and financial responsibilities associated with these activities continue to reside with the DWR. Accordingly, the commodity costs associated with long-term contracts allocated to SDGE from the DWR (and the revenues to recover those costs) are not included in our Consolidated Statements of Operations. We provide discussion on electric industry restructuring related to the DWR in Note 15.On a monthly basis, SoCalGas accrues natural gas storage contract revenues, which consist of storage, reservation, and variable charges based on negotiated agreements with terms of up to 15 years. The table below shows the total revenues from the Sempra Utilities in Sempra Energy's Consolidated Statements of Operations, net of sales taxes, for each of the last three years. The revenues include amounts for services rendered but unbilled (approximately one-half month's deliveries) at the end of each year. TOTAL SEMPRA UTILITIES REVENUES AT SEMPRA ENERGY CONSOLIDATED(1) (Dollars in millions) Years ended December 31, 2009 2008 2007 Natural gas revenues $ 3,801 $ 5,419 $ 4,869 Electric revenues 2,419 2,553 2,184 Total $ 6,220 $ 7,972 $ 7,053 (1) Excludes intercompany revenues. As we discuss in Note 16, beginning April 1, 2008, the SDGE and SoCalGas core natural gas supply portfolios were combined and are managed by SoCalGas. Effective as of that date, SoCalGas procures natural gas for SDGEs core customers. Core customers are primarily residential and small commercial and industrial customers. This core gas procurement function is considered a shared service, therefore amounts related to SDGE are not included in SoCalGas' income statement.We provide additional information concerning utility revenue recognition in "Regulatory Matters" above.Sempra GlobalSempra CommoditiesAs we discuss in Notes 3 and 4, on April 1, 2008, our commodities-marketing businesses, previously wholly owned subsidiaries of Sempra Energy, were sold into RBS Sempra Commodities, a partnership jointly owned by Sempra Energy and The Royal Bank of Scotland. Therefore, beginning April 1, 2008, we account for our earnings in the partnership under the equity method. RBS Sempra Commodities generates most of its revenues from trading and marketing activities in natural gas, electricity, petroleum, petroleum products, base metals and other commodities. RBS Sempra Commodities quotes bid and ask prices

OTHER COST OF SALES

OTHER COST OF SALES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Other Cost of Sales Disclosure	OTHER COST OF SALESOther Cost of Sales primarily includes the transportation and storage costs incurred at Sempra Commodities prior to April 1, 2008 and pipeline transportation and natural gas marketing costs incurred at Sempra LNG.

OPERATION AND MAINTENANCE

OPERATION AND MAINTENANCE
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Operation and Maintenance Expenses Disclosure	OPERATION AND MAINTENanCE EXPENSES Operation and Maintenance includes operating and maintenance costs, and general and administrative costs, which consist primarily of personnel costs, purchased materials and services, and rent.

FOREIGN CURRENCY TRANSLATION

FOREIGN CURRENCY TRANSLATION
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Foreign Currency Translation Disclosure	Foreign Currency Translation Our foreign operations generally use their local currency as their functional currency. The assets and liabilities of our foreign operations are translated into U.S. dollars at current exchange rates at the end of the reporting period, and revenues and expenses are translated at average exchange rates for the year. The resulting noncash translation adjustments do not enter into the calculation of earnings or retained earnings (unless the operation is being discontinued), but are reflected in Comprehensive Income and in Accumulated Other Comprehensive Income (Loss), a component of shareholders' equity. To reflect the fluctuations in the values of functional currencies of Sempra Pipelines Storages South American investments accounted for under the equity method, the following adjustments were made to the carrying value of these investments (dollars in millions): Upward (downward) adjustment to investments Investment Currency 2009 2008 2007 Chile Chilean Peso $ 85 $ (101) $ 29 Peru Peruvian Nuevo Sol 13 (7) 8 Argentina Argentine Peso - (8) (2) Smaller adjustments have been made to other operations where the U.S. dollar is not the functional currency. We provide additional information concerning these investments in Note 4. Currency transaction gains and losses in a currency other than the entity's functional currency are included in the calculation of consolidated earnings at Sempra Energy as follows: Years ended December 31, (Dollars in millions) 2009 2008 2007 Currency transaction gain (loss) $ 3 $ (2) $ -

TRANSACTIONS WITH AFFILIATES

TRANSACTIONS WITH AFFILIATES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Transactions With Affiliates Disclosure	Transactions with Affiliates Loans to Unconsolidated Affiliates In December 2001, Sempra Pipelines Storage issued two U.S. dollar-denominated loans to affiliates: $35 million to Camuzzi Gas Pampeana S.A. and $22 million to Camuzzi Gas del Sur S.A. These companies are affiliates of Sempra Pipelines Storages Argentine investments discussed in Note 4. In June 2006, Sempra Pipelines Storage collected the outstanding balance from Camuzzi Gas Pampeana S.A. The loan to Camuzzi Gas del Sur S.A. has a $27 million balance outstanding at a variable interest rate (7.25 percent at December 31, 2009). The loan is fully reserved at December 31, 2009.Loans from Unconsolidated Affiliates At December 31, 2008, Sempra Pipelines Storage had a $100 million note payable due in 2011 to Chilquinta Energa Finance Co. LLC, an unconsolidated affiliate, which was paid in full in November 2009.InvestmentsSempra Pipelines Storage has an investment in bonds issued by Chilquinta Energa S.A. that we discuss in Note 4. Other Affiliate TransactionsSempra Energy, SDGE and SoCalGas provide certain services to each other and are charged an allocable share of the cost of such services. Amounts due to/from affiliates are as follows: AMOUNTS DUE TO AND FROM AFFILIATES AT SDGE, PE AND SOCALGAS (Dollars in millions) December 31, 2009 2008 SDGE Current: Due from Sempra Energy $ 2 $ 20 Due from SoCalGas 3 8 Due from various affiliates 3 1 $ 8 $ 29 Due to various affiliates $ - $ 1 Income taxes due to (from) Sempra Energy(1) $ (37) $ 7 Noncurrent: Promissory note due from Sempra Energy, variable rate based on short-term commercial paper rates (0.13% at December 31, 2009) $ 2 $ 4 Pacific Enterprises Current: Due from Sempra Energy $ 7 $ - Due from various affiliates 5 5 $ 12 $ 5 Due to affiliate $ 84 $ 83 Due to Sempra Energy - 15 Due to SDGE 3 8 $ 87 $ 106 Income taxes due from Sempra Energy(1) $ 2 $ 66 Noncurrent: Promissory note due from Sempra Energy, variable rate based on short-term commercial paper rates (0.13% at December 31, 2009) $ 513 $ 457 SoCalGas Current: Due from Sempra Energy $ 6 $ - Due to Sempra Energy $ - $ 15 Due to SDGE 3 8 $ 3 $ 23 Income taxes due to (from) Sempra Energy(1) $ (2) $ 1 (1) SDGE, PE and SoCalGas are included in the consolidated income tax return of Sempra Energy and are allocated income tax expense from Sempra Energy in an amount equal to that which would result from the companies' having always filed a separate return. Revenues from unconsolidated affiliates at the Sempra Utilities are as follows: REVENUES FROM UNCONSOLIDATED AFFILIATES AT THE SEMPRA UTILITIES (Dollars in millions) Years ended December 31, 2009 2008 2007 SDGE $ 8 $ 11 $ 13 SoCalGas 43 36 68 Transactions with RBS Sempra CommoditiesSeveral of our business units engage in transactions with RBS Sempra Commodities. Amounts in our Consolidated Financial Statements related to these transactions are as follows: AMOUNTS RECORDED FOR TRANSACTIONS WITH RBS SEMPRA COMMODITIES (Dollars in millions) Years ended December 3

OTHER INCOME

OTHER INCOME
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Other Income (Expense), Net Disclosure	OTHER INCOME (EXPENSE), NETOther Income (Expense), Net on the Consolidated Statements of Operations consists of the following: OTHER INCOME (EXPENSE), NET (Dollars in millions) Years ended December 31, 2009 2008(1) 2007(1) Sempra Energy Consolidated: Allowance for equity funds used during construction $ 39 $ 35 $ 22 Regulatory interest income (expense), net 4 (9) (13) Investment gains (losses)(2) 55 (53) 27 Gain (loss) on interest rate swaps, Otay Mesa VIE 27 (54) (17) Gain on interest rate swaps, other 6 1 24 Mexican peso exchange losses(3) - (57) - Sundry, net(4) 18 28 30 Total $ 149 $ (109) $ 73 SDGE: Allowance for equity funds used during construction $ 29 $ 27 $ 17 Regulatory interest income (expense), net 5 (5) (7) Gain (loss) on interest rate swaps, Otay Mesa VIE 27 (54) (17) Sundry, net 3 3 1 Total $ 64 $ (29) $ (6) SoCalGas and PE: Allowance for equity funds used during construction $ 10 $ 8 $ 5 Regulatory interest expense, net (1) (4) (6) Sundry, net (2) (2) (2) Total at SoCalGas 7 2 (3) Additional at PE: Sundry, net (3) - - Total at PE $ 4 $ 2 $ (3) (1) Amounts for Sempra Energy Consolidated, SDGE, and PE have been adjusted for the retrospective adoption of ASC 810 (SFAS 160). (2) Represents investment gains (losses) on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are partially offset by corresponding changes in compensation expense related to the plans. (3) The losses for the year ended December 31, 2008 were largely offset by Mexican tax benefits arising from fluctuations in the U.S. dollar/Mexican peso exchange rate and inflation rate. (4) The year ended December 31, 2008 includes a $16 million cash payment received for the early termination of a capacity agreement for the Cameron LNG receipt terminal.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
New Accounting Standards Disclosure	NOTE 2. NEW ACCOUNTING STANDARDS We describe below recent pronouncements that have had or may have a significant effect on our financial statements. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or disclosures. SEMPRA ENERGY, SDGE, PE AND SOCALGAS Statement of Financial Accounting Standards (SFAS) No. 168, "The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162" (SFAS 168): The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC or the Codification) became the official source of GAAP on July 1, 2009. For convenience, we have provided the prior GAAP source references in addition to the Codification reference throughout these financial statements and footnotes. In addition, the Codification changed the referencing system used to identify new accounting guidance. As a result, we refer to an accounting update issued after July 1, 2009 as an Accounting Standards Update (ASU). We refer to new pronouncements issued before July 1, 2009 by their original title.ASU 2010-06, Improving Disclosures About Fair Value Measurements (ASU 2010-06): ASU 2010-06 requires the following additional fair value measurement disclosures: transfers into and out of Levels 1 and 2 segregation of classes of assets and liabilities measured at fair value valuation techniques and inputs used for Level 2 and Level 3 instruments detailed activity for Level 3 instruments, including separate presentation of purchases, sales, issuances, and settlements ASU 2010-06 applies to us beginning with the first quarter of 2010, and we will provide the additional disclosure in our 2010 interim financial statements. ASU 2009-17, "Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities" (ASU 2009-17): ASU 2009-17 (SFAS 167) amends FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities an interpretation of ARB No. 51 (FIN 46(R)), which provides consolidation guidance related to variable interest entities. ASU 2009-17 requires a qualitative approach for identifying the primary beneficiary of a variable interest entity based on 1) the power to direct activities that most significantly impact the economic performance of the entity, and 2) the obligation to absorb losses or right to receive benefits that could be significant to the entity; ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; and separate disclosure by the primary beneficiary on the face of the balance sheet to identify 1) assets that can only be used to settle obligations of the variable interest entity, and 2) liabilities for which creditors do not have recourse to the primary beneficiary. ASU 2009-17 applies to us beginning with the first quarter of 2010. We are evaluating the impact of its adoption on our financial position, but we do not expect it to have a material effect on earnings. ASU 2009-12, Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent

RECENT INVESTMENT ACTIVITY

RECENT INVESTMENT ACTIVITY
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Recent Investment Activity Disclosure	NOTE 3. RECENT INVESTMENT ACTIVITY Sempra Pipelines StorageIn October 2008, Sempra Pipelines Storage acquired EnergySouth, an energy services holding company based in Mobile, Alabama for $511 million in cash and the assumption of debt. Principal holdings of EnergySouth include EnergySouth Midstream and Mobile Gas. As a natural gas distribution utility, Mobile Gas serves approximately 93,000 customers in southwest Alabama. In December 2008, EnergySouth Midstream changed its name to Sempra Midstream.Sempra Midstream is the general partner and 91-percent owner of Bay Gas Storage Company (Bay Gas) and owned 60 percent of Mississippi Hub, LLC (Mississippi Hub) through December 31, 2008. On January 16, 2009, Sempra Midstream purchased the remaining 40-percent ownership interest of Mississippi Hub for $94 million in cash.Assets and liabilities assumed as of the date of Sempra Pipelines Storages acquisition of EnergySouth were: September 30, (Dollars in millions) 2008(1) ASSETS Current assets: Cash $ 16 Accounts receivable 31 Other current assets 121 Total current assets 168 Property, plant and equipment 609 Goodwill and other intangible assets(2) 527 Other noncurrent assets 19 Total assets $ 1,323 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 85 Current portion of long-term debt 212 Other current liabilities 43 Total current liabilities 340 Deferred income taxes 243 Long-term debt 114 Other noncurrent liabilities 29 Total liabilities 726 Noncontrolling interests 86 Total liabilities and equity $ 812 Net assets acquired $ 511 (1) As adjusted for the retrospective adoption of ASC 810 (SFAS 160). (2) As a result of the acquisition, we recorded $67 million of goodwill, none of which is deductible for tax purposes. The results of operations and changes in cash flows for EnergySouth are included in our Consolidated Statements of Operations and Statements of Consolidated Cash Flows from October 1, 2008.We provide further information regarding the other intangible assets acquired in Note 1.We discuss Sempra Pipelines Storages investment in Rockies Express Pipeline LLC (Rockies Express) in Note 4.

INVESTMENTS IN UNCONSOLIDATED E

INVESTMENTS IN UNCONSOLIDATED ENTITIES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Investments in Unconsolidated Entities Disclosure	Sempra CommoditiesOn April 1, 2008, Sempra Energy and The Royal Bank of Scotland (RBS) completed the formation of RBS Sempra Commodities, a partnership to own and operate the commodities-marketing businesses previously operated through wholly owned subsidiaries of Sempra Energy. Our initial equity contribution to the partnership was $1.6 billion. RBS made an initial equity contribution of $1.665 billion and is committed to provide any additional funding required for the ongoing operations of the partnerships businesses. As a result of the transaction, we received approximately $1.2 billion in cash, net of our contribution and including cash withdrawn from the businesses in anticipation of the transaction. We recorded an after-tax gain of $67 million on the transaction. We provide additional information about this transaction in Notes 4 and 6.On February 16, 2010, Sempra Energy, RBS and the partnership entered into an agreement to sell certain businesses within the partnership. We discuss this transaction and related agreements affecting the partnership in Note 20.Sempra GenerationWe provide information about investment activity at Sempra Generation in Note 4. NOTE 4. INVESTMENTS IN UNCONSOLIDATED ENTITIESWe account for investments under the equity method when we have an ownership interest of 20 to 50 percent. In these cases, our pro rata shares of the subsidiaries net assets are included in Other Investments and in Investment in RBS Sempra Commodities LLP on the Consolidated Balance Sheets. These investments are adjusted for our share of each investees earnings or losses, dividends, and other comprehensive income or loss. Equity in earnings of unconsolidated subsidiaries that is recorded before income tax is reported in Equity Earnings (Losses) RBS Sempra Commodities LLP and in Equity Earnings (Losses) Other on the Consolidated Statements of Operations. Equity earnings recorded net of income tax recorded by the subsidiary are reported in Equity Earnings (Losses), Net of Income Tax, on the Consolidated Statements of Operations. The carrying value of unconsolidated subsidiaries is evaluated for impairment under the GAAP provisions for equity method investments. We account for certain investments in housing partnerships made before May 19, 1995 under the cost method, whereby the costs were amortized over ten years based on the expected residual value. We summarize our investment balances and earnings below: EQUITY METHOD AND OTHER INVESTMENTS ON THE CONSOLIDATED BALANCE SHEETS (Dollars in millions) Investment at December 31, 2009 2008 Sempra Commodities: Investment in RBS Sempra Commodities LLP $ 2,172 $ 2,082 Other equity method investments: Sempra Pipelines Storage: Chilquinta Energa S.A. $ 373 $ 364 Luz del Sur S.A. 206 183 Rockies Express 850 249 Sempra Generation: Elk Hills Power 198 198 Fowler Ridge II Wind Farm 236 - Housing partnerships 21 30 Total other equity method investments 1,884 1,024 Cost method investments - housing partnerships 12 13 Other(1) 255 129 Total $ 2,151 $ 1,166 (1) Other includes Sempra Pipelines Storages investments in bonds, which inclu

AVAILABLE-FOR-SALE SECURITIES

AVAILABLE-FOR-SALE SECURITIES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Available-for-sale Securities Disclosure	Available-for-Sale Securities Sempra Commodities recorded purchases of available-for-sale securities of $1 million in the first quarter of 2008 and $12 million in the year 2007. Sempra Commodities had no sales of available-for-sale securities in 2008 prior to the formation of the joint venture. Sempra Commodities sold $20 million of available-for-sale securities in 2007, yielding proceeds of $54 million. The cost basis of the sales was determined by the specific identification method and pretax gains of $34 million were realized as a result of the sales in 2007. There was no impairment of available-for-sale securities in 2008.In June 2009, we reclassified into earnings a $7 million loss associated with available-for-sale securities held by RBS Sempra Commodities. The following table shows the fair values and gross unrealized gains and losses for the securities held in the trust funds. NUCLEAR DECOMMISSIONING TRUSTS (Dollars in millions) Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value As of December 31, 2009: Debt securities: U.S. government(1) $ 141 $ 12 $ (3) $ 150 Municipal bonds(2) 85 3 (3) 85 Total debt securities 226 15 (6) 235 Equity securities 238 188 (5) 421 Cash and other securities(3) 21 1 - 22 Total available-for-sale securities $ 485 $ 204 $ (11) $ 678 As of December 31, 2008: Debt securities: U.S. government $ 127 $ 28 $ - $ 155 Municipal bonds 69 1 (9) 61 Total debt securities 196 29 (9) 216 Equity securities 251 105 (36) 320 Cash and other securities 40 3 (2) 41 Total available-for-sale securities $ 487 $ 137 $ (47) $ 577 (1) Maturity dates are 2011-2039. (2) Maturity dates are 2010-2057. (3) Maturity dates are 2010-2049. The following table shows the proceeds from sales of securities in the trusts and gross realized gains and losses on those sales. SALES OF SECURITIES (Dollars in millions) Years ended December 31, 2009 2008 2007 Proceeds from sales $ 224 $ 458 $ 578 Gross realized gains 6 18 18 Gross realized losses (33) (40) (12) Net unrealized gains (losses) are included in Regulatory Liabilities Arising from Removal Obligations on the Consolidated Balance Sheets. We determine the cost of securities in the trusts on the basis of specific identification. The fair value of securities in an unrealized loss position as of December 31, 2009 was $110 million. The unrealized losses of $11 million were primarily caused by a negative market environment. We do not consider these investments to be other than temporarily impaired as of December 31, 2009. Customer contribution amounts are determined by the CPUC using estimates of after-tax investment returns, decommissioning costs, and decommissioning cost escalation rates. Changes in investment returns and decommissioning costs may result in a change in future customer contributions.We discuss the impact of asset retirement obligations in Note 1. We provide additional information about SONGS in Notes 15 and 17.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Discontinued Operations Disclosure	NOTE 5. DISCONTINUED OPERATIONS In June 2006, in line with our previously announced plan to focus resources on the development of our core businesses, we decided to sell Bangor Gas and Frontier Energy, Sempra Pipelines Storages natural gas distribution companies located in Maine and North Carolina, respectively. The sales of Frontier Energy and Bangor Gas were completed on September 30, and November 30, 2007, respectively, for a total of $5 million in cash. We have reported the above operations as discontinued for all periods presented in our Consolidated Financial Statements and summarize the income statement information concerning our discontinued operations in the table below. DISCONTINUED OPERATIONS (Dollars in millions) Year ended December 31, 2007 Revenues $ 10 Income from operations, before income taxes $ 2 Income tax expense (4) (2) Loss on disposal, before income taxes (2) Income tax expense (23) Consolidated state tax adjustment 1 (24) $ (26)

DEBT AND CREDIT FACILITIES

DEBT AND CREDIT FACILITIES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Debt and Credit Facilities Disclosure	NOTE 6. DEBT AND CREDIT FACILITIES Committed Lines of CreditAt December 31, 2009, Sempra Energy Consolidated had $4.3 billion in committed lines of credit to provide liquidity and to support commercial paper and variable-rate demand notes, the major components of which are detailed below. Available unused credit on these lines at December 31, 2009 was $3.6 billion.These amounts exclude lines of credit associated with Sempra Commodities, some of which we continue to guarantee, as we discuss below in "RBS Sempra Commodities." RBS has replaced Sempra Energy as guarantor on all uncommitted lines of credit associated with Sempra Commodities. To the extent that Sempra Energy's credit support arrangements, including Sempra Commodities' committed facilities, have not been terminated or replaced, RBS has indemnified Sempra Energy for any claims or losses arising in connection with those arrangements.Sempra EnergySempra Energy has a $1 billion, three-year syndicated revolving credit agreement expiring in 2011. Citibank, N.A. serves as administrative agent for the syndicate of 17 lenders. No single bank has greater than an 11-percent share. Borrowings bear interest at benchmark rates plus a margin that varies with market index rates and Sempra Energy's credit ratings. The facility requires Sempra Energy to maintain a ratio of total indebtedness to total capitalization (as defined in the agreement) of no more than 65 percent at the end of each quarter. The actual ratio at December 31, 2009, calculated as defined in the agreement, was 48.1 percent.At December 31, 2009, Sempra Energy had no outstanding borrowings under the facility. Sempra GlobalSempra Global has a $2.5 billion, three-year syndicated revolving credit agreement expiring in 2011. Citibank, N.A. serves as administrative agent for the syndicate of 18 lenders. No single bank has greater than an 11-percent share. The facility also provides for issuance of up to $300 million of letters of credit on behalf of Sempra Global with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit.Sempra Energy guarantees Sempra Globals obligations under the credit facility. Borrowings bear interest at benchmark rates plus a margin that varies with market index rates and Sempra Energys credit ratings. The facility requires Sempra Energy to maintain a ratio of total indebtedness to total capitalization (as defined in the agreement) of no more than 65 percent at the end of each quarter. At December 31, 2009, Sempra Global had letters of credit of $7 million outstanding and no outstanding borrowings under the facility. The facility provides support for $460 million of commercial paper outstanding at December 31, 2009. At December 31, 2008, $600 million of the $1.1 billion commercial paper outstanding under this facility was classified as long-term debt based on management's intent and ability to maintain this level of borrowing on a long-term basis either supported by this credit facility or by issuing long-term debt. The classification had no impact on cash flows. Sempra UtilitiesSDGE and SoCalGas have a combined $800 million, three-year syndicated

GUARANTEES

GUARANTEES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Guarantees Disclosure	RBS Sempra CommoditiesRBS is obligated to provide RBS Sempra Commodities with all growth capital, working-capital requirements and credit support. However, as a transitional measure, we continue to provide back-up guarantees for a portion of RBS Sempra Commodities trading obligations and for a credit facility with third party lenders pending novation (legal transfer) of the remaining trading obligations to RBS, or after the closing of the transaction we discuss in Note 20, to J.P. Morgan Ventures Energy Corporation. Some of these back-up guarantees may continue for a prolonged period of time. RBS, which is controlled by the government of the United Kingdom, has fully indemnified us for any claims or losses in connection with these arrangements. RBS Sempra Commodities net trading liabilities supported by Sempra Energys guarantees at December 31, 2009 were $798 million, consisting of guaranteed trading obligations net of collateral. The amount of guaranteed net trading liabilities varies from day to day with the value of the trading obligations and related collateral.Sempra Energy also has guaranteed $344 million of $1.72 billion of RBS Sempra Commodities' commitments under a credit facility expiring September 29, 2010. Extensions of credit under the committed facility, which totaled $968 million at December 31, 2009, are limited to and secured by a borrowing base consisting of receivables, inventories and other joint venture assets that are valued at varying percentages of current market value. At December 31, 2009, the gross market value of the borrowing base assets was $3.3 billion. The facility will be reduced and end as the borrowing base assets are transferred to RBS as established by the joint-venture agreement.On February 16, 2010, Sempra Energy, RBS and the partnership entered into an agreement to sell certain businesses within the partnership. We discuss this transaction and related agreements affecting the partnership in Note 20.Other Guarantees As discussed in Note 4, Sempra Energy, Conoco and KMP hold 25-percent, 25-percent and 50-percent ownership interests, respectively, in Rockies Express. Rockies Express operates a natural gas pipeline linking natural gas producing areas in the Rocky Mountain region to the upper Midwest and the eastern United States. Rockies Express has a $2 billion, five-year credit facility expiring in 2011 that provides for revolving extensions of credit that are guaranteed by Sempra Energy, Conoco and KMP in proportion to their respective ownership percentages. Borrowings under the facility bear interest at rates varying with market rates plus a margin that varies with the credit ratings of the lowest-rated guarantor. The facility requires each guarantor to comply with various financial and other covenants comparable to those contained in its senior unsecured credit facilities. In the case of Sempra Energy, the primary requirement is that we maintain a ratio of total indebtedness to total capitalization (as defined in the facility) of no more than 65 percent at the end of each quarter. Rockies Express had $1.7 billion of outstanding borrowings under this facility at December 31, 2009, of which $418 milli

FACILITIES UNDER JOINT OWNERSHI

FACILITIES UNDER JOINT OWNERSHIP
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Facilities Under Joint Ownership Disclosure	NOTE 7. FACILITIES UNDER JOINT OWNERSHIPSan Onofre Nuclear Generating Station (SONGS) and the Southwest Powerlink transmission line are owned jointly by SDGE with other utilities. SDGE's interests at December 31, 2009 were as follows: Southwest (Dollars in millions) SONGS Powerlink Percentage ownership 20 % 91 % Utility plant in service $ 117 $ 323 Accumulated depreciation and amortization 28 183 Construction work in progress 157 12 SDGE, and each of the other owners, holds its undivided interest as a tenant in common in the property. Each owner is responsible for financing its share of each project and participates in decisions concerning operations and capital expenditures.SDGE's share of operating expenses is included in Sempra Energy's and SDGE's Consolidated Statements of Operations.

INCOME TAXES

INCOME TAXES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Income Taxes Disclosure	NOTE 8. INCOME TAXES Reconciliation of net U.S. statutory federal income tax rates to the effective income tax rates are as follows: RECONCILIATION OF FEDERAL INCOME TAX RATES TO EFFECTIVE INCOME TAX RATES Years ended December 31, 2009 2008(1) 2007(1) Sempra Energy Consolidated U.S. federal statutory income tax rate 35 % 35 % 35 % Utility depreciation 3 3 3 State income taxes, net of federal income tax benefit 3 3 4 Tax credits (1) (1) (3) Allowance for equity funds used during construction (1) (1) (1) Non-U.S. earnings taxed at lower statutory income tax rates (5) (2) (1) Resolution of Internal Revenue Service audits (2) (2) - Utility repair allowance (1) (1) (1) Self-developed software expenditures (3) (2) (1) Mexican foreign exchange and inflation effects 1 (3) - Variable interest entities (1) 1 - Noncontrolling interests 1 - - Other, net - - (1) Effective income tax rate 29 % 30 % 34 % SDGE U.S. federal statutory income tax rate 35 % 35 % 35 % Depreciation 4 4 5 State income taxes, net of federal income tax benefit 4 5 5 Allowance for equity funds used during construction (2) (2) (1) Resolution of Internal Revenue Service audits (1) (3) (3) Utility repair allowance (1) (2) (2) Self-developed software expenditures (2) (3) (2) Regulatory reserve release - - (2) Variable interest entities (2) 4 1 Other, net (3) (2) (3) Effective income tax rate 32 % 36 % 33 % PE U.S. federal statutory income tax rate 35 % 35 % 35 % Depreciation 6 5 6 State income taxes, net of federal income tax benefit 4 4 5 Self-developed software expenditures (6) (3) (1) Other, net (4) (5) (5) Effective income tax rate 35 % 36 % 40 % SoCalGas U.S. federal statutory income tax rate 35 % 35 % 35 % Depreciation 6 6 6 State income taxes, net of federal income tax benefit 4 4 5 Self-developed software expenditures (6) (3) (1) Other, net (5) (6) (4) Effective income tax rate 34 % 36 % 41 % (1) As adjusted at Sempra Energy, SDGE and PE for the retrospective adoption of ASC 810 (SFAS 160). The geographic components of Income from Continuing Operations Before Income Taxes and Equity Earnings of Certain Unconsolidated Subsidiaries at Sempra Energy are as follows: Years ended December 31, (Dollars in millions) 2009 2008(1) 2007(1) U.S. $ 1,007 $ 1,199 $ 1,275 Non-U.S. 469 244 268 Total $ 1,476 $ 1,443 $ 1,543 (1) As adjusted for the retrospective adoption of ASC 810 (SFAS 160). The components of income tax expense are as follows: INCOME TAX EXPENSE (Dollars in millions) Years ended December 31, 2009 2008 2007 Sempra Energy Consolidated Current: U.S. Federal $ 39 $ (10) $ 247 U.S. State 40 28 77 Non-U.S. 48 96 51 Total 127 114 375 Deferred: U.S. Federal 216 359 124 U.S. State 24 29 (5) Non-U.S. 58 (59) 36 Total 298 329 155 Deferred investment tax credits (3) (5) (6) Total income tax expense $ 422 $ 438 $ 524 SDGE Current: U.S. Federal $ 70 $ 25 $ 131 U.S. State 34 23 44 Tot

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Employee Benefit Plans Disclosure	NOTE 9. EMPLOYEE BENEFIT PLANSWe are required by applicable GAAP to: recognize an asset for a plan's overfunded status or a liability for a plan's underfunded status in the statement of financial position; measure a plan's assets and its obligations that determine its funded status as of the end of the fiscal year (with limited exceptions); and recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Generally, those changes are reported in other comprehensive income and as a separate component of shareholders' equity. The information presented below covers the employee benefit plans of Sempra Energy and its principal subsidiaries. Sempra Energy has funded and unfunded noncontributory defined benefit plans, including separate plans for SDGE and SoCalGas, which together cover substantially all employees and Sempra Energy's board of directors. The plans generally provide defined benefits based on years of service and either final average or career salary.Sempra Energy also has other postretirement benefit plans, including separate plans for SDGE and SoCalGas, which together cover substantially all employees and Sempra Energy's board of directors. The life insurance plans are both contributory and noncontributory and the health-care plans are contributory. Participants' contributions are adjusted annually. Other postretirement benefits include medical benefits for retirees' spouses. Pension and other postretirement benefits costs and obligations are dependent on assumptions used in calculating such amounts. These assumptions include discount rates expected return on plan assets health-care cost trend rates mortality rates compensation increase rates payout elections (lump sum or annuity) We review these assumptions on an annual basis prior to the beginning of each year and update them as appropriate. We consider current market conditions, including interest rates, in making these assumptions. We use a December 31 measurement date for all of our plans.In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra Energy maintains dedicated assets, including investments in life insurance contracts, which totaled $453 million and $401 million at December 31, 2009 and 2008, respectively.Pension and Other Postretirement Benefit PlansBenefit Plan Amendments Affecting 2008 and 2009Effective January 1, 2009, one of Sempra Energy's pension plans, separate from the Sempra Utilities' plans, was amended to increase the cash balance benefit obligation for certain participants. This amendment resulted in an increase of $3 million in the benefit obligation and unrecognized prior service costs as of December 31, 2008.Effective October 1, 2009, the SDGE pension plan was amended to set the automatic cost of living adjustment for retirees with grandfathered benefits at 0 percent for the period beginning October 1, 2009 and ending September 30, 2010. Without this amendment, the automatic cost of living adjustment for 2009 would have been negative, resulting in a reduction in benefits. This amendment resulted in an increase of $3 million in th

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Share-based Compensation Disclosure	NOTE 10. SHARE-BASED COMPENSATIONSempra Energy Equity Compensation PlansSempra Energy has share-based compensation plans intended to align employee and shareholder objectives related to the long-term growth of Sempra Energy. The plans permit a wide variety of share-based awards, including: non-qualified stock options incentive stock options restricted stock restricted stock units stock appreciation rights performance awards stock payments dividend equivalents Eligible Sempra Utilities employees participate in Sempra Energy's share-based compensation plans as a component of their compensation package.At December 31, 2009, Sempra Energy had the following types of equity awards outstanding: Non-Qualified Stock Options: Options have an exercise price equal to the market price of the common stock at the date of grant, are service-based, become exercisable over a four-year period, and expire 10 years from the date of grant. Vesting and/or the ability to exercise may be accelerated upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Options are subject to forfeiture or earlier expiration when an employee terminates employment. Restricted Stock: Substantially all restricted stock awards vest at the end of four-year performance periods based on Sempra Energys total return to shareholders relative to that of market indices. Vesting is subject to earlier forfeiture upon termination of employment and accelerated vesting upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Holders of restricted stock have full voting rights. They also have full dividend rights; however, dividends paid on restricted stock held by officers are reinvested to purchase additional shares that become subject to the same vesting conditions as the restricted stock to which the dividends relate. Restricted Stock Units: Restricted stock unit awards vest at the end of four-year performance periods based on Sempra Energys total return to shareholders relative to that of market indices. If Sempra Energys total return to shareholders exceeds the target levels established under the 2008 Long Term Incentive Plan for awards granted beginning in 2008, up to an additional 50 percent of the number of granted restricted stock units may be issued. If Sempra Energy's total return to shareholders is below the target levels, shares are subject to partial vesting on a pro rata basis. Vesting is subject to earlier forfeiture upon termination of employment and accelerated vesting upon a change in control, in accordance with severance pay agreements or upon eligibility for retirement. Dividend equivalents on shares subject to restricted stock units are reinvested to purchase additional shares that become subject to the same vesting conditions as the restricted stock units to which the dividends relate. The Sempra Energy 2008 Long Term Incentive Plan for EnergySouth, Inc. Employees and Other Eligible Individuals (the Plan) authorizes the issuance of up to 302,478 shares of Sempra Energy common stock. In connection with the acquisition of EnergySouth in October 2008, we adopted the Plan

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Derivative Financial Instruments Disclosure	Interest Rate SwapsWe discuss our fair value interest rate swaps and interest rate swaps to hedge cash flows in Note 11. NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTSOn January 1, 2009, we adopted SFAS 161 (ASC 815) as discussed in Note 2. The adoption had no impact on our consolidated financial statements, but requires additional disclosures, which we provide below. Comparative disclosures for periods prior to the date of adoption are not required and we have not provided them. We use derivative instruments primarily to manage exposures arising in the normal course of business. These exposures are commodity market risk and benchmark interest rate risk. Our use of derivatives for these risks is integrated into the economic management of our anticipated revenues, anticipated expenses, assets and liabilities. Derivatives may be effective in mitigating these risks that could lead to declines in anticipated revenues or increases in anticipated expenses, or that our asset values may fall or our liabilities increase. Accordingly, our derivative activity summarized below generally represents an impact that is intended to offset associated revenues, expenses, assets or liabilities that are not presented below. We record all derivatives at fair value on the Consolidated Balance Sheets. We designate each derivative as 1) a cash flow hedge, 2) a fair value hedge, or 3) undesignated.Depending on the applicability of hedge accounting and, for the Sempra Utilities and other operations subject to regulatory accounting, the requirement to pass impacts through to customers, the impact of derivative instruments may be offset in other comprehensive income (cash flow hedge), on the balance sheet (fair value hedges and regulatory offsets), or recognized in earnings. We classify cash flows from the settlements of derivative instruments as operating activities on the Statements of Consolidated Cash Flows. In certain cases, we apply the normal purchase or sale exception to derivative accounting and have other commodity contracts that are not derivatives. These contracts are not recorded at fair value and are therefore excluded from the disclosures below. HEDGE ACCOUNTINGWe may designate a derivative as a cash flow hedging instrument if it effectively converts anticipated revenues or expenses to a fixed dollar amount. We may utilize cash flow hedge accounting for derivative commodity instruments and interest rate instruments. Designating cash flow hedges is dependent on the business context in which the instrument is being used, the effectiveness of the instrument in offsetting the risk that a given future revenue or expense item may vary, and other criteria.We may designate an interest rate derivative as a fair value hedging instrument if it effectively converts our own debt from a fixed interest rate to a variable rate. The combination of the derivative and debt instruments results in fixing that portion of the fair value of the debt that is related to benchmark interest rates. Designating fair value hedges is dependent on the instrument being used, the effectiveness of the instrument in offsetting changes in the fair value of our debt instruments, and other criter

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Fair Value of Financial Instruments Disclosure	NOTE 12. FAIR VALUE MEASUREMENTSFair Value of Financial InstrumentsThe fair values of certain of our financial instruments (cash, temporary investments, accounts and notes receivable, dividends and accounts payable, short-term debt and customer deposits) approximate their carrying amounts. The following table provides the carrying amounts and fair values of the remaining financial instruments at December 31: FAIR VALUE OF FINANCIAL INSTRUMENTS (Dollars in millions) 2009 2008 Carrying Fair Carrying Fair Amount Value Amount Value Sempra Energy Consolidated: Investments in affordable housing partnerships(1) $ 34 $ 59 $ 43 $ 63 Total long-term debt(2) 8,050 8,618 6,962 7,013 Due to unconsolidated affiliates 2 2 102 101 Preferred stock of subsidiaries 179 156 179 149 SDGE: Total long-term debt(3) $ 2,672 $ 2,828 $ 2,146 $ 2,073 Contingently redeemable preferred stock 79 76 79 71 PE and SoCalGas: Total long-term debt(4) $ 1,296 $ 1,382 $ 1,372 $ 1,333 PE: Preferred stock $ 80 $ 61 $ 80 $ 59 Preferred stock of subsidiary 20 19 20 19 $ 100 $ 80 $ 100 $ 78 SoCalGas: Preferred stock $ 22 $ 20 $ 22 $ 20 (1) We discuss our investments in affordable housing partnerships in Note 4. (2) Before reductions for unamortized discount of $17 million at December 31, 2009 and $8 million at December 31, 2008. (3) Before reductions for unamortized discount of $4 million at December 31, 2009 and $2 million at December 31, 2008. (4) Before reductions for unamortized discount of $2 million at December 31, 2009 and $2 million at December 31, 2008. Sempra Energy based the fair values of investments in affordable housing partnerships on the present value of estimated future cash flows, discounted at rates available for similar investments. Sempra Energy estimated the fair values of debt incurred to acquire affordable housing partnerships based on the present value of the future cash flows, discounted at rates available for similar notes with comparable maturities.All entities based the fair values of the long-term debt and preferred stock on their quoted market prices or quoted market prices for similar securities.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Fair Value Measurements Disclosure	Derivative Positions Net of Cash CollateralEach Consolidated Balance Sheet reflects the offsetting of net derivative positions with fair value amounts for cash collateral with the same counterparty when management believes a legal right of offset exists.The following table provides the amount of fair value of cash collateral receivables that were not offset in the Consolidated Balance Sheets as of December 31, 2009 and 2008: December 31, (Dollars in millions) 2009 2008 Sempra Energy Consolidated $ 36 $ 28 SDGE 30 21 SoCalGas 5 7 Fair Value HierarchyWe discuss the valuation techniques we use to measure fair value and the definition of the three levels of the fair value hierarchy in Note 1 under "Fair Value Measurements" and in Note 2 under "FSP FAS 157-4." The three tables below, by level within the fair value hierarchy, set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2009 and 2008. We classify financial assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities, and their placement within the fair value hierarchy levels. The fair value of commodity derivative assets and liabilities is determined in accordance with our netting policy, as discussed above under "Derivative Positions Net of Cash Collateral." The determination of fair values, shown in the tables below, incorporates various factors, including but not limited to, the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests).Our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2009 and 2008 in the tables below include the following: Nuclear decommissioning trusts reflect the assets of SDGE's nuclear decommissioning trusts, excluding cash balances, as we discuss in Note 7. The trust assets are valued by a third party trustee. The trustee obtains prices from pricing services that are derived from observable data. We monitor the prices supplied by pricing services by validating pricing with other sources of data. Investments include marketable securities and are primarily priced based on observable interest rates for similar instruments actively trading in the marketplace. Commodity and other derivative positions, which include other interest rate management instruments, are entered into primarily as a means to manage price exposures. We use market participant assumptions to price these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. In the third quarter of 2007, the California Independent System Operator (ISO) began the process of allocating CRRs to load serving entities, including SDGE. These instruments are included with commodit

PREFERRED STOCK

PREFERRED STOCK
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Preferred Stock Disclosure	NOTE 13. PREFERRED STOCK The table below shows the details of preferred stock for SDGE, PE and SoCalGas. PREFERRED STOCK Call/ Redemption December 31, Price 2009 2008 (in millions) Contingently redeemable: SDGE: $20 par value, authorized 1,375,000 shares: 5% Series, 375,000 shares outstanding $ 24.00 $ 8 $ 8 4.5% Series, 300,000 shares outstanding $ 21.20 6 6 4.4% Series, 325,000 shares outstanding $ 21.00 7 7 4.6% Series, 373,770 shares outstanding $ 20.25 7 7 Without par value: $1.70 Series, 1,400,000 shares outstanding $ 25.595 35 35 $1.82 Series, 640,000 shares outstanding $ 26.00 16 16 SDGE - Total contingently redeemable preferred stock 79 79 Sempra Energy - total preferred stock of subsidiary, contingently redeemable $ 79 $ 79 PE: Without par value, authorized 15,000,000 shares: $4.75 Dividend, 200,000 shares outstanding $ 100.00 $ 20 $ 20 $4.50 Dividend, 300,000 shares outstanding $ 100.00 30 30 $4.40 Dividend, 100,000 shares outstanding $ 101.50 10 10 $4.36 Dividend, 200,000 shares outstanding $ 101.00 20 20 $4.75 Dividend, 253 shares outstanding $ 101.00 - - Total preferred stock of PE 80 80 SoCalGas: $25 par value, authorized 1,000,000 shares: 6% Series, 79,011 shares outstanding 3 3 6% Series A, 783,032 shares outstanding 19 19 Total preferred stock of SoCalGas 22 22 Less: 50,970 shares of the 6% Series outstanding owned by PE (2) (2) PE - total preferred stock of subsidiary 20 20 Sempra Energy - total preferred stock of subsidiaries $ 100 $ 100 Following are the attributes of each companys preferred stock. No amounts currently outstanding are subject to mandatory redemption.SDGE All outstanding series are callable. The $20 par value preferred stock has two votes per share on matters being voted upon by shareholders of SDGE and a liquidation preference at par plus any unpaid dividends. All outstanding series of SDGE's preferred stock have cumulative preferences as to dividends. The no-par-value preferred stock is nonvoting and has a liquidation preference of $25 per share plus any unpaid dividends. SDGE is authorized to issue 10 million shares of no-par-value preferred stock (both subject to and not subject to mandatory redemption). SDGE is currently authorized to issue up to 25million shares of an additional class of preference shares designated as "Series Preference Stock." The Series Preference Stock is in addition to the Cumulative Preferred Stock, Preference Stock (Cumulative) and Common Stock that SDGE was otherwise authorized to issue, and when issued would rank junior to the Cumulative Preferred Stock and Preference Stock (Cumulative). The stocks rights, preferences and privileges would be established by the board of directors at the time of issuance. SDGE's outstanding preferred securities are classified as contingently redeemable because they contain a contingent redemption feature that allows the holder to elect a majority of SDGE's board of directors if dividends are not paid for eight consecutive quarters, and such a redemption triggering eve

EARNINGS PER SHARE

EARNINGS PER SHARE
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Earnings Per Share Disclosure	NOTE 14. SEMPRA ENERGY - SHAREHOLDERS' EQUITY AND EARNINGS PER SHARE The following table provides the per share computations for income from continuing operations for the years ended December 31. Basic earnings per common share (EPS) is calculated by dividing earnings applicable to common stock by the weighted-average number of common shares outstanding for the year. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. EARNINGS PER SHARE COMPUTATIONS (Dollars in millions, except per share amounts; shares in thousands) Years ended December 31, 2009 2008(1) 2007(1) Numerator: Income from continuing operations $ 1,122 $ 1,068 $ 1,118 Losses from continuing operations attributable to noncontrolling interests 7 55 17 Preferred dividends of subsidiaries (10) (10) (10) Income from continuing operations attributable to common shares $ 1,119 $ 1,113 $ 1,125 Denominator: Weighted-average common shares outstanding for basic EPS 243,339 247,387 259,269 Dilutive effect of stock options, restricted stock awards and restricted stock units 4,045 3,772 4,735 Weighted-average common shares outstanding for diluted EPS 247,384 251,159 264,004 Income from continuing operations attributable to common shares: Per common share, basic $ 4.60 $ 4.50 $ 4.34 Per common share, diluted $ 4.52 $ 4.43 $ 4.26 (1) As adjusted for the retrospective adoption of ASC 810 (SFAS 160). The dilution from common stock options is based on the treasury stock method. Under this method, proceeds based on the exercise price plus unearned compensation and windfall tax benefits and minus tax shortfalls are assumed to be used to repurchase shares on the open market at the average market price for the year. The windfall tax benefits are tax deductions we would receive upon the assumed exercise of stock options in excess of the deferred income taxes we recorded related to the compensation expense on the stock options. Tax shortfalls occur when the assumed tax deductions are less than recorded deferred income taxes. The calculation excludes options for which the exercise price on common stock was greater than the average market price during the year. We had 1,504,250; 1,496,500 and 55,800 such stock options outstanding during 2009, 2008 and 2007, respectively. During 2007, we had 699,600 stock options outstanding that were antidilutive because of the unearned compensation and windfall tax benefits included in the assumed proceeds under the treasury stock method. There were no such antidilutive stock options outstanding during 2009 or 2008.The dilution from unvested restricted stock awards and units is also based on the treasury stock method. Assumed proceeds equal to the unearned compensation and windfall tax benefits and minus tax shortfalls related to the awards are assumed to be used to repurchase shares on the open market at the average market price for the year. The windfall tax benefits or tax shortfalls are the difference between tax deductions we would recei

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Shareholders' Equity Disclosure	We are authorized to issue 750,000,000 shares of no-par-value common stock. In addition, we are authorized to issue 50,000,000 shares of preferred stock having rights, preferences and privileges that would be established by the Sempra Energy board of directors at the time of issuance. Shares of common stock held by the ESOP were 868,173; 1,177,196 and 1,488,046 at December 31, 2009, 2008 and 2007, respectively. These shares are unallocated and therefore excluded from the computation of EPS.Excluding shares held by the ESOP, common stock activity consisted of the following: COMMON STOCK ACTIVITY 2009 2008 2007 Common shares outstanding, January 1 243,324,281 261,214,009 262,005,690 Savings plan issuance 1,021,023 - 268,178 Shares released from ESOP 309,023 310,850 195,720 Stock options exercised 1,835,184 683,858 1,245,696 Restricted stock issuances 37,233 4,002 803,706 Common stock investment plan(1) 381,167 1,508 95,499 Shares repurchased (396,046) (18,841,287) (3,349,771) Shares forfeited and other (4,000) (48,659) (50,709) Common shares outstanding, December 31 246,507,865 243,324,281 261,214,009 (1) Participants in the Direct Stock Purchase Plan may reinvest dividends to purchase newly issued shares. Our board of directors has the discretion to determine the payment and amount of future dividends. Common Stock Repurchase ProgramOn September 11, 2007, our board of directors authorized the repurchase of additional shares of our common stock provided that the amounts expended for such purposes did not exceed the greater of $2 billion or amounts expended to purchase no more than 40 million shares. Purchases may include open-market and negotiated transactions, structured purchase arrangements, and tender offers.In April 2008, we entered into a Collared Accelerated Share Acquisition Program under which we prepaid $1 billion to repurchase shares of our common stock to be delivered later in 2008 in a share forward transaction. Our outstanding shares used to calculate earnings per share were reduced by the number of shares repurchased when they were delivered to us, and the $1 billion purchase price was recorded as a reduction in shareholders equity upon its prepayment. We received 18,416,241 shares under the program during 2008 based on a final weighted average price of $54.30 per share.This share repurchase program is unrelated to share-based compensation as described in Note 10.

SEMPRA UTILITIES' REGULATORY MA

SEMPRA UTILITIES' REGULATORY MATTERS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Electric Industry Regulation and Other Regulatory Matters Disclosure	NOTE 15. ELECTRIC INDUSTRY REGULATION BackgroundCalifornia's legislative response to the 2000 - 2001 energy crisis resulted in the DWR purchasing a substantial portion of power for California's electricity users. In 2001, the DWR entered into long-term contracts with suppliers, including Sempra Generation, to provide power for the utility procurement customers of each of the California investor-owned utilities (IOUs), including SDGE. The CPUC allocates the power and its administrative responsibility, including collection of power contract costs from utility customers, among the IOUs. Effective in 2003, the IOUs resumed responsibility for electric commodity procurement above their allocated share of the DWR's long-term contracts. Power Procurement and Resource PlanningEffective in 2003, the CPUC: directed the IOUs, including SDGE, to resume electric commodity procurement to cover their net short energy requirements, which are the total customer energy requirements minus supply from resources owned, operated or contracted; implemented legislation regarding procurement and renewable energy portfolio standards; and established a process for review and approval of the utilities' long-term resource and procurement plans. This process is intended to identify anticipated needs for generation and transmission resources in order to support transmission grid reliability and to better serve customers. Sunrise Powerlink Electric Transmission LineIn December 2008, the CPUC issued a final decision authorizing SDGE to construct a 500-kilovolt (kV) electric transmission line between the Imperial Valley and the San Diego region (Sunrise Powerlink). This line is designed to provide 1,000 MW of increased import capability into the San Diego area. The decision allows SDGE to construct the Sunrise Powerlink along a route that would generally run south of the Anza-Borrego Desert State Park. The decision also approves the environmental impact review conducted jointly by the CPUC and the Bureau of Land Management (BLM) and establishes a total project cost cap of $1.9 billion, including approximately $190 million for environmental mitigation costs. In January 2009, the BLM issued its decision approving the project, route and environmental review. Three community groups and an individual have filed a lawsuit in Federal District Court in Sacramento, California, for Declaratory and Injunctive Relief regarding Sunrise Powerlink. The complaint alleges that the BLM failed to properly assess the environmental impacts of the approved Sunrise Powerlink route and the related potential development of renewable resources in east San Diego County and Imperial County. The complaint requests a declaration that the BLM violated Federal law in approving Sunrise Powerlink and an injunction against any construction activities.Sunrise Powerlink costs will be recovered in SDGE's Electric Transmission Formula Rate, where SDGE must demonstrate to the FERC that such costs were prudently incurred. The CPUC decision requires SDGE to adhere to certain commitments it made during the application process, as follows: not to contract, for any length of term, with conventional coal genera

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Legal Proceedings Disclosure	NOTE 17. COMMITMENTS AND CONTINGENCIESLEGAL PROCEEDINGSWe record loss reserves for legal proceedings when it is probable that a loss has been incurred and the amounts of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to estimate with reasonable certainty the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from reserved amounts or exceed applicable insurance coverages and could materially adversely affect our business, cash flows, results of operations, and financial condition.At December 31, 2009, Sempra Energys reserves for legal proceedings, on a consolidated basis, were $465 million, of which $270 million is offset by an insurance receivable for wildfire litigation and $161 million is for previously resolved matters, as described further below. At December 31, 2009, SDGE and SoCalGas had reserves of $290 million (including the $270 million offset) and $11 million, respectively. SDGE 2007 Wildfire LitigationIn October 2007, San Diego County experienced several catastrophic wildfires. Reports issued by the California Department of Forestry and Fire Protection (Cal Fire) concluded that two of these fires (the Witch and Rice fires) were SDGE "power line caused" and that a third fire (the Guejito fire) occurred when a wire securing a Cox Communications' fiber optic cable came into contact with an SDGE power line "causing an arc and starting the fire." Cal Fire reported that the Rice fire burned approximately 9,500 acres and damaged 206 homes and two commercial properties, and the Witch and Guejito fires merged and eventually burned approximately 198,000 acres, resulting in two fatalities, approximately 40 firefighters injured and approximately 1,141 homes destroyed.A September 2008 staff report issued by the CPUC's Consumer Protection and Safety Division reached substantially the same conclusions as the Cal Fire reports, but also contended that the power lines involved in the Witch and Rice fires and the lashing wire involved in the Guejito fire were not properly designed, constructed and maintained. In November 2008, the CPUC initiated proceedings to determine if any of its rules were violated and in October 2009, SDGE and the Consumer Protection and Safety Division entered into a settlement agreement that, if approved by the CPUC, would resolve these proceedings by SDGE's payment of $14.75 million without any admission of responsibility for the wildfires. Numerous plaintiffs have sued SDGE and Sempra Energy in San Diego County Superior Court seeking recovery of unspecified amounts of damages, including punitive damages, from the three fires. Plaintiffs include owners and insurers of properties that were destroyed or damaged in the fires and public entities seeking recovery of firefighting, emergency response, and environmental costs. Plaintiffs assert various bases for recovery, including inverse condemnation based upon a California Court of Appeal decision finding that another California investor-owned utility was subject to strict liability, without regard to foreseeability or negligence, for damages resulting from a

CONTRACTUAL COMMITMENTS

CONTRACTUAL COMMITMENTS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Contractual Commitments Disclosure	Natural Gas Contracts Natural GasSoCalGas has the responsibility for procuring natural gas for both SDGEs and SoCalGas core customers in a combined portfolio. SoCalGas buys natural gas under short-term and long-term contracts for this portfolio. Purchases are from various southwestern U.S., U.S. Rockies, Canadian and California suppliers and are primarily based on published monthly bid-week indices. SoCalGas transports natural gas primarily under long-term firm interstate pipeline capacity agreements that provide for annual reservation charges, which are recovered in rates. SoCalGas has commitments with interstate pipeline companies for firm pipeline capacity under contracts that expire at various dates through 2025. At December 31, 2009, the future minimum payments under existing natural gas contracts and natural gas storage and transportation contracts were: Sempra Energy Consolidated (Dollars in millions) Transportation Natural Gas(1) Total(1) 2010 $ 123 $ 1,039 $ 1,162 2011 80 315 395 2012 46 7 53 2013 45 7 52 2014 35 6 41 Thereafter 176 - 176 Total minimum payments $ 505 $ 1,374 $ 1,879 (1) Excludes amounts related to Sempra LNG's contracts with Tangguh PSC and RasGas discussed below. SoCalGas (Dollars in millions) Transportation Natural Gas Total 2010 $ 123 $ 1,003 $ 1,126 2011 80 309 389 2012 46 3 49 2013 45 3 48 2014 35 3 38 Thereafter 176 - 176 Total minimum payments $ 505 $ 1,321 $ 1,826 Total payments under these natural gas contracts were: Years ended December 31, (Dollars in millions) 2009 2008 2007 Sempra Energy Consolidated $ 1,754 $ 3,469 $ 2,976 SDGE - 12 390 SoCalGas 1,452 3,145 2,413 LNGSempra LNG has a purchase agreement with Tangguh PSC Contractors (Tangguh PSC) for the supply of LNG equivalent to 500 million cubic feet of natural gas per day to be delivered from Tangguh PSCs Indonesian liquefaction facility to the Energa Costa Azul receipt terminal. The contracted deliveries under this 20-year agreement began in late 2009 and will use half of the capacity of Energa Costa Azul. The price of LNG under this contract is based on the Southern California border index. Although the LNG purchase contract specifies a minimum number of cargoes to be delivered, under the terms of the contract, Tangguh PSC may divert certain cargoes to other customers, which would reduce amounts paid under the contract by Sempra LNG. As of December 31, 2009, if all cargoes under the contract were to be delivered, future payments under this contract would be $847 million in 2010 $1.0 billion in 2011 $1.0 billion in 2012 $1.1 billion in 2013 $1.1 billion in 2014 $18.2 billion for the remainder of the contract term The amounts above are based on forward prices of the Southern California border index price from 2010 to 2014, plus an estimated one percent escalation per year beyond 2014. Sempra LNG has a natural gas sales contract to sell a portion of the LNG purchased from Tangguh PSC to Mexicos national electric company, Comisin Federal de Electricidad (CFE) at prices that are based on the Southern California border index price. Sempra LNG also has a natural

LEASES

LEASES
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Leases Disclosure	OPERATING Leases Sempra Energy, SDGE, PE and SoCalGas have operating leases on real and personal property expiring at various dates from 2010 to 2045. Certain leases on office facilities contain escalation clauses requiring annual increases in rent ranging from two percent to six percent at Sempra Energy, two percent to six percent at SDGE, and two percent to five percent at both PE and SoCalGas. The rentals payable under these leases may increase by a fixed amount each year or by a percentage of a base year, and most leases contain extension options that we could exercise. The Sempra Utilities had an operating lease agreement for fleet vehicles with GE Capital that was terminated in November 2008, with remaining rental commitments to be paid by January 2011. In November 2008, to replace the prior agreement, the Sempra Utilities entered into an operating lease agreement for fleet vehicles with RBS Asset Finance, Inc. with an aggregate maximum lease limit of $100 million.Rent expense for all operating leases totaled: Years ended December 31, (Dollars in millions) 2009 2008 2007 Sempra Energy Consolidated $ 101 $ 100 $ 141 SDGE 24 25 24 PE 65 65 68 SoCalGas 52 52 54 At December 31, 2009, the minimum rental commitments payable in future years under all noncancelable operating leases were as follows: Sempra Energy (Dollars in millions) Consolidated SDGE PE SoCalGas 2010 $ 88 $ 20 $ 50 $ 43 2011 77 19 36 36 2012 46 17 6 6 2013 42 15 5 5 2014 41 14 4 4 Thereafter 360 58 12 12 Total future rental commitments $ 654 $ 143 $ 113 $ 106 Capital Leases During 2009, the Sempra Utilities entered into an agreement with U.S. Bancorp Asset Finance which provides leases for fleet vehicles that were not renewed under the agreement with GE Capital, which we discuss above. Under the agreement with U.S. Bancorp Asset Finance, the leases for fleet vehicles are capital leases. Total capital lease payments were as follows: Year ended December 31, (Dollars in millions) 2009 Sempra Energy Consolidated $ 4 SDGE 1 SoCalGas 3 There were no capital lease payments in 2008 or 2007.At December 31, 2009, the minimum commitments payable in future years under all capital leases were as follows: Sempra Energy (Dollars in millions) Consolidated SDGE SoCalGas 2010 $ 16 $ 5 $ 11 2011 12 5 7 2012 10 5 5 2013 5 3 2 2014 3 2 1 Thereafter - - - Total future rental commitments $ 46 $ 20 $ 26

ENVIRONMENTAL MATTERS

ENVIRONMENTAL MATTERS
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Environmental Matters Disclosure	Department of Energy Nuclear Fuel Disposal The Nuclear Waste Policy Act of 1982 made the DOE responsible for the disposal of spent nuclear fuel. However, it is uncertain when the DOE will begin accepting spent nuclear fuel from SONGS. This delay will lead to increased costs for spent fuel storage. This cost will be recovered through SONGS revenue unless SDGE is able to recover the increased cost from the federal government. Environmental IssuesOur operations are subject to federal, state and local environmental laws. We also are subject to regulations related to hazardous wastes, air and water quality, land use, solid waste disposal and the protection of wildlife. These laws and regulations require that we investigate and correct the effects of the release or disposal of materials at sites associated with our past and our present operations. These sites include those at which we have been identified as a Potentially Responsible Party (PRP) under the federal Superfund laws and similar state laws. In addition, we are required to obtain numerous governmental permits, licenses and other approvals to construct facilities and operate our businesses. The related costs of environmental monitoring, pollution control equipment, cleanup costs, and emissions fees are significant. Increasing national and international concerns regarding global warming and mercury, carbon dioxide, nitrogen oxide and sulfur dioxide emissions could result in requirements for additional pollution control equipment or significant emissions fees or taxes that could adversely affect Sempra Generation. The Sempra Utilities' costs to operate their facilities in compliance with these laws and regulations generally have been recovered in customer rates. We generally capitalize the significant costs we incur to mitigate or prevent future environmental contamination or extend the life, increase the capacity, or improve the safety or efficiency of property used in current operations. The following table shows (in millions) our capital expenditures in order to comply with environmental laws and regulations: Years ended December 31, 2009 2008 2007 Sempra Energy Consolidated(1) $ 43 $ 30 $ 19 SDGE 24 18 11 SoCalGas 17 9 6 (1) In cases of non-wholly owned affiliates, includes only our share. Increases in 2009 compared to 2008 are primarily due to SoCalGas' spending on gas transmission projects, SDGE's improvements to its electric transmission system and spending on emissions-control equipment. Increases in 2008 compared to 2007 are primarily due to SDGE's spending related to the Sunrise Powerlink and the Miramar II peaking plant, and Sempra LNG's spending related to the Energa Costa Azul LNG receipt terminal. We have not identified any significant environmental issues outside the United States. From 2009 through 2013, SDGE expects to incur costs of approximately $190 million for environmental mitigation measures associated with the Sunrise Powerlink construction project. At the Sempra Utilities, costs that relate to current operations or an existing condition caused by past operations are generally recorded as a regulatory asset due to the probability that these cos

NUCLEAR INSURANCE

NUCLEAR INSURANCE
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Nuclear Insurance Disclosure	Nuclear InsuranceSDGE and the other owners of SONGS have insurance to cover claims from nuclear liability incidents arising at SONGS. This insurance provides $300 million in coverage limits, the maximum amount available, including coverage for acts of terrorism. In addition, the Price-Anderson Act provides for up to $12.2 billion of secondary financial protection (SFP). If a nuclear liability loss occurring at any U.S. licensed/commercial reactor exceeds the $300 million insurance limit, all nuclear reactor owners could be required to contribute to the SFP. SDGE's contribution would be up to $47 million. This amount is subject to an annual maximum of $7 million, unless a default occurs by any other SONGS owner. If the SFP is insufficient to cover the liability loss, SDGE could be subject to an additional assessment.The SONGS owners, including SDGE, also have $2.75 billion of nuclear property, decontamination, and debris removal insurance. In addition, the SONGS owners have up to $490 million insurance coverage for outage expenses and replacement power costs due to accidental property damage. This coverage is limited to $3.5 million per week for the first 52 weeks, then $2.8 million per week for up to 110 additional weeks. There is a 12-week waiting period deductible. These insurance coverages are provided through a mutual insurance company. Insured members are subject to retrospective premium assessments. SDGE could be assessed up to $8.5 million.The nuclear property insurance program includes an industry aggregate loss limit for non-certified acts of terrorism (as defined by the Terrorism Risk Insurance Act). The industry aggregate loss limit for property claims arising from non-certified acts of terrorism is $3.24 billion. This is the maximum amount that will be paid to insured members who suffer losses or damages from these non-certified terrorist acts.

CONCENTRATION OF CREDIT RISK

CONCENTRATION OF CREDIT RISK
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Concentration of Credit Risk Disclosure	Concentration of Credit Risk We maintain credit policies and systems to manage our overall credit risk. These policies include an evaluation of potential counterparties' financial condition and an assignment of credit limits. These credit limits are established based on risk and return considerations under terms customarily available in the industry. We grant credit to utility customers and counterparties, substantially all of whom are located in our service territory, which covers most of Southern California and a portion of central California for SoCalGas, and all of San Diego County and an adjacent portion of Orange County for SDGE.As described above, Sempra Generation has a contract with the DWR to supply up to 1,900 MW of power to the state over 10 years, beginning in 2001. Sempra Generation would be at risk for the amounts of outstanding billings and the continued viability of the contract if the DWR were to default on its payments under this contract. The average monthly billing related to this contract is $26 million and is normally collected by the end of the next month.When they become operational, projects at Sempra LNG and Sempra Pipelines Storage place significant reliance on the ability of their suppliers and customers to perform on long-term agreements and on our ability to enforce contract terms in the event of nonperformance. We consider many factors, including the negotiation of supplier and customer agreements, when we evaluate and approve development projects. As a transitional measure, we continue to provide back-up guarantees for a portion of RBS Sempra Commodities' trading obligations and for certain credit facilities with third party lenders pending novation of the remaining trading obligations to RBS, or after the closing of the transaction we discuss in Note 20, to J.P. Morgan Ventures Energy Corporation. In addition, in conjunction with the other owners of the Rockies Express, we guarantee Rockies Express' borrowings under its credit facility. We discuss these credit guarantees in Note 6.

SEGMENT INFORMATION

SEGMENT INFORMATION
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Segment Reporting Disclosure	NOTE 18. SEGMENT INFORMATIONWe have five separately managed reportable segments, as follows: SDGE provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California. Sempra Commodities holds our investment in RBS Sempra Commodities, a joint venture with RBS. The partnership was formed on April 1, 2008 from our commodities-marketing businesses previously reported in this segment. The partnership's commodity trading businesses serve customers in natural gas, electricity, petroleum and petroleum products, and base metals. Sempra Commodities also includes the operating results of Sempra Rockies Marketing, which holds firm service capacity on the Rockies Express Pipeline. We provide further discussion regarding the joint venture in Note 4. On February 16, 2010, Sempra Energy, RBS and the partnership entered into an agreement to sell certain businesses within the partnership. We discuss this transaction and related agreements affecting the partnership in Note 20. Sempra Generation develops, owns and operates, or holds interests in, electric power plants and energy projects in Arizona, California, Nevada, Indiana, Hawaii and Mexico to serve wholesale electricity markets in North America. Sempra Pipelines Storage develops, owns and operates, or holds interests in, natural gas pipelines and storage facilities in the United States and Mexico, and companies that provide natural gas or electricity services in Argentina, Chile, Mexico and Peru. We are currently pursuing the sale of our interests in the Argentine utilities, which we discuss further in Note 4. Sempra Pipelines Storage also operates a small natural gas distribution utility in Southwest Alabama. We evaluate each segment's performance based on its contribution to Sempra Energys reported earnings. The Sempra Utilities operate in essentially separate service territories, under separate regulatory frameworks and rate structures set by the CPUC. The Sempra Utilities' operations are based on rates set by the CPUC and the FERC. We describe the accounting policies of our segments in Note 1.Sales to the DWR, which is a customer of the Sempra Generation segment and which is discussed in various sections of this Annual Report, comprised 9 percent of our revenues in 2009, 10 percent in 2008 and 9 percent in 2007.The operations of Bangor Gas and Frontier Energy, which we discontinued in June 2006 and discuss in Note 5, had been in the Sempra Pipelines Storage segment.The following tables show selected information by segment from our Consolidated Statements of Operations and Consolidated Balance Sheets. The tables exclude amounts from discontinued operations, unless otherwise noted. Amounts labeled as "all other" in the following tables consist primarily of parent organizations and Sempra LNG. SEGMENT INFORMATION (Dollars in millions) Years ended December 31, 2009 2008 2007 REVENUES SDGE $ 2,916 36 % $ 3,251 30 % $ 2,852 25 % SoCalGas 3,355 41 4,768 44 4,282 38 Sempra Commodities 73 1 5

QUARTERLY FINANCIAL DATA

QUARTERLY FINANCIAL DATA (UNAUDITED)
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Quarterly Financial Data (Unaudited) Disclosure	NOTE 19. QUARTERLY FINANCIAL DATA (UNAUDITED) SEMPRA ENERGY (In millions, except for per share amounts) Quarters ended March 31 June 30 September 30 December 31 2009 Revenues $ 2,108 $ 1,689 $ 1,853 $ 2,456 Expenses and other income $ 1,690 $ 1,433 $ 1,443 $ 2,064 Net income $ 325 $ 189 $ 302 $ 306 Earnings attributable to Sempra Energy $ 316 $ 198 $ 317 $ 288 Basic per-share amounts(1): Net income $ 1.35 $ 0.78 $ 1.24 $ 1.25 Earnings attributable to Sempra Energy $ 1.31 $ 0.82 $ 1.30 $ 1.18 Weighted average common shares outstanding 241.8 242.7 243.9 244.9 Diluted per-share amounts(1): Net income $ 1.33 $ 0.76 $ 1.21 $ 1.23 Earnings attributable to Sempra Energy $ 1.29 $ 0.80 $ 1.27 $ 1.16 Weighted average common shares outstanding 245.0 247.1 248.5 248.7 2008(2) Revenues $ 3,270 $ 2,503 $ 2,692 $ 2,293 Expenses and other income $ 2,920 $ 2,057 $ 2,314 $ 2,024 Net income $ 244 $ 262 $ 302 $ 260 Earnings attributable to Sempra Energy $ 242 $ 244 $ 308 $ 319 Basic per-share amounts(1): Net income $ 0.94 $ 1.07 $ 1.24 $ 1.07 Earnings attributable to Sempra Energy $ 0.94 $ 0.99 $ 1.26 $ 1.32 Weighted average common shares outstanding 258.6 245.6 243.8 241.7 Diluted per-share amounts(1): Net income $ 0.93 $ 1.05 $ 1.22 $ 1.06 Earnings attributable to Sempra Energy $ 0.92 $ 0.98 $ 1.24 $ 1.30 Weighted average common shares outstanding 262.7 249.7 247.9 244.5 (1) Earnings per share are computed independently for each of the quarters presented and therefore may not sum to the total for the year. (2) As adjusted for the retrospective adoption of ASC 810 (SFAS 160). In the first quarter of 2009, Net Income and Earnings Attributable to Sempra Energy included $116 million at Sempra Commodities for earnings from the joint venture with RBS, compared to $59 million of earnings for the commodities businesses in the same period in 2008, prior to the formation of the joint venture. In the second quarter of 2009, Expenses and Other Income included an asset write-off of $132 million related to Sempra Pipelines Storage's Liberty Gas Storage project. The write-off negatively impacted Net Income and Earnings Attributable to Sempra Energy by $97 million and $64 million, respectively. In the first quarter of 2008, Revenues included $457 million and Expenses and Other Income included $362 million for Sempra Commodities prior to the formation of RBS Sempra Commodities on April 1, 2008.We discuss quarterly fluctuations related to SDGE, PE and SoCalGas below. SDGE (Dollars in millions) Quarters ended March 31 June 30 September 30 December 31 2009 Operating revenues $ 732 $ 631 $ 773 $ 780 Operating expenses 557 518 601 651 Operating income $ 175 $ 113 $ 172 $ 129 Net income $ 107 $ 91 $ 92 $ 83 (Earnings) losses attributable to noncontrolling interests (7) (20) 18 (15) Earnings 100 71 110 68 Dividends on preferred stock (1) (1) (2) (1) Earnings attributable to common shares $ 99 $ 70 $ 108 $ 67 2008(1) Operating revenues $ 746 $ 754 $ 949 $ 802 Operating expenses 617 642 757 665 Operati

SUBSEQUENT EVENT

SUBSEQUENT EVENT
	12 Months Ended Dec. 31, 2009
Notes to Consolidated Financial Statements
Subsequent Event Disclosure	NOTE 20. SUBSEQUENT EVENT In November 2009, RBS announced its intention to divest its interest in RBS Sempra Commodities in connection with a directive from the European Commission to dispose of certain assets. On February 16, 2010, Sempra Energy, RBS and the partnership (Seller Parties) entered into an agreement (the Purchase Agreement) with J.P. Morgan Ventures Energy Corporation (J.P. Morgan Ventures), whereby J.P. Morgan Ventures will purchase the following businesses from the joint venture: the global oil, metals, coal, emissions (other than emissions related to the partnerships North American power business), plastics, agricultural commodities and concentrates commodities trading and marketing business the European power and gas business the investor products business RBS Sempra Commodities will retain its North American power and natural gas trading businesses and its retail energy solutions business. These businesses have historically generated 40 to 60 percent of total earnings of the businesses in the partnership, and have averaged more than 50 percent.The transaction is expected to close in the second quarter of 2010. J.P. Morgan Ventures will pay an aggregate purchase price equal to the estimated book value at closing of the businesses purchased, generally computed on the basis of IFRS (as adopted by the European Union), plus an amount equal to $468 million. Sempra Energy will be entitled to 53-1/3 percent of the aggregate purchase price, and RBS will be entitled to 46-2/3 percent of the aggregate purchase price. We are currently evaluating the effect of the proposed transaction on our investment and share of equity method earnings, which will be impacted by the joint ventures allocation of goodwill to the transaction, U.S. GAAP/IFRS differences and the application of equity method accounting.In conjunction with the transaction, JPMorgan Chase Co. has delivered a guaranty in favor of the Seller Parties to guarantee certain obligations, including the payment obligations, of J.P. Morgan Ventures under the Purchase Agreement.The closing is subject to several conditions, including the following: governmental approvals from the U.K. Financial Services Authority, the U.S. Department of Justice or Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and antitrust approvals from regulators in Canada and in a limited number of other jurisdictions if necessary, the obtaining of a license from the Swiss Federal Market Supervisory Authority a condition to the obligation of the Seller Parties to close the transaction that JP Morgan Chase Co. not experience a ratings downgrade below the level specified in the Purchase Agreement entering into certain related agreements, including an agreement pursuant to which the partnership will provide transition services to the purchased businesses following the closing In connection with the transaction under the Purchase Agreement, we and RBS entered into a letter agreement to negotiate, prior to closing of the transaction, definitive documentation to amend certain provisions of the Limited Liability Partnership Agreement dated April 1, 2008 betwe

SCHEDULE I - CONDENSED FINANCIA

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF PARENT
	12 Months Ended Dec. 31, 2009
Schedule I - Condensed Financial Information of Parent
Condensed Financial Information of Parent	Schedule I sempra energy Condensed Financial Information of Parent SEMPRA ENERGY CONDENSED STATEMENTS OF OPERATIONS (Dollars in millions, except per share amounts) Years ended December 31, 2009 2008 2007 Interest income $ 140 $ 104 $ 166 Interest expense (244) (130) (178) Operation and maintenance (81) (64) (105) Other income (expense), net 50 (63) 58 Income tax benefits 89 93 38 Loss before equity in earnings of subsidiaries (46) (60) (21) Equity in earnings of subsidiaries 1,165 1,173 1,120 Net income/earnings $ 1,119 $ 1,113 $ 1,099 Basic net income/earnings per common share $ 4.60 $ 4.50 $ 4.24 Weighted-average number of shares outstanding (thousands) 243,339 247,387 259,269 Diluted net income/earnings per common share $ 4.52 $ 4.43 $ 4.16 Weighted-average number of shares outstanding (thousands) 247,384 251,159 264,004 See Notes to Condensed Financial Information of Parent (Sempra Energy). SEMPRA ENERGY CONDENSED BALANCE SHEETS (Dollars in millions) December 31, December 31, 2009 2008 Assets: Cash and cash equivalents $ 7 $ 12 Short-term investments - 152 Due from affiliates 133 28 Income taxes receivable 242 299 Other current assets 18 9 Total current assets 400 500 Investments in subsidiaries 10,790 9,644 Due from affiliates 2,972 2,365 Other assets 820 811 Total assets $ 14,982 $ 13,320 Liabilities and shareholders' equity: Current portion of long-term debt $ 507 $ 300 Due to affiliates 1,350 1,876 Other current liabilities 379 307 Total current liabilities 2,236 2,483 Long-term debt 3,196 2,233 Other long-term liabilities 543 635 Sempra Energy shareholders' equity 9,007 7,969 Total liabilities and shareholders' equity $ 14,982 $ 13,320 See Notes to Condensed Financial Information of Parent (Sempra Energy). SEMPRA ENERGY CONDENSED STATEMENTS OF CASH FLOWS (Dollars in millions) Years ended December 31, 2009 2008 2007 Net cash provided by operating activities $ 97 $ 173 $ 240 Dividends received from subsidiaries 150 350 150 Expenditures for property, plant and equipment (1) (4) (13) Expenditures for short-term investments - (640) - Proceeds from sale of short-term investments 152 488 - Purchase of trust assets (30) (17) (59) Proceeds from sales by trust - 2 21 Decrease (increase) in loans to affiliates, net (1,285) (149) 532 Other - - (4) Cash (used in) provided by investing activities (1,014) 30 627 Common stock dividends paid (341) (339) (316) Issuances of common stock 73 18 40 Repurchases of common stock (22) (1,018) (185) Issuances of long-term debt 1,492 1,247 82 Payments on long-term debt (314) (11) (990) Increase (decrease) in loans from affiliates, net 4 (102) 59 Other 20 8 22 Cash provided by (used in) financing activities 912 (197) (1,288) (Decrease) increase in cash and cash equivalents (5) 6 (421) Cash and cash equivalents, January 1 12 6 427 Cash and cash equivalents, December 31 $ 7 $ 12 $ 6 See Notes to Condensed Financial Information of Parent (Sempra E