FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020



RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Fair value at June 30, 2020
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	356		$	6	$	—	$	362
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	26			26		—		52
Municipal bonds	—			343		—		343
Other securities	—			294		—		294
Total debt securities	26			663		—		689
Total nuclear decommissioning trusts⁽¹⁾	382			669		—		1,051
Interest rate and foreign exchange instruments	—			9		—		9
Commodity contracts not subject to rate recovery	—			9		—		9
Effect of netting and allocation of collateral⁽²⁾	27			—		—		27
Commodity contracts subject to rate recovery	3			3		87		93
Effect of netting and allocation of collateral⁽²⁾	13			—		6		19
Total	$	425		$	690	$	93	$	1,208

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	253	$	—	$	253
Commodity contracts not subject to rate recovery	—			10		—		10
Commodity contracts subject to rate recovery	11			6		70		87
Effect of netting and allocation of collateral⁽²⁾	(11		)	—		—		(11		)
Total	$	—		$	269	$	70	$	339

	Fair value at December 31, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	503		$	6	$	—	$	509
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	46			11		—		57
Municipal bonds	—			282		—		282
Other securities	—			226		—		226
Total debt securities	46			519		—		565
Total nuclear decommissioning trusts⁽¹⁾	549			525		—		1,074
Interest rate and foreign exchange instruments	—			24		—		24
Commodity contracts not subject to rate recovery	—			11		—		11
Effect of netting and allocation of collateral⁽²⁾	43			—		—		43
Commodity contracts subject to rate recovery	5			8		95		108
Effect of netting and allocation of collateral⁽²⁾	11			8		6		25
Total	$	608		$	576	$	101	$	1,285

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	157	$	—	$	157
Commodity contracts not subject to rate recovery	—			17		—		17
Commodity contracts subject to rate recovery	14			4		67		85
Effect of netting and allocation of collateral⁽²⁾	(14		)	—		—		(14		)
Total	$	—		$	178	$	67	$	245


⁽¹⁾	Excludes cash and cash equivalents.


⁽²⁾	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.



RECURRING FAIR VALUE MEASURES – SDG&E
(Dollars in millions)
	Fair value at June 30, 2020
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	356		$	6	$	—	$	362
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	26			26		—		52
Municipal bonds	—			343		—		343
Other securities	—			294		—		294
Total debt securities	26			663		—		689
Total nuclear decommissioning trusts⁽¹⁾	382			669		—		1,051
Commodity contracts subject to rate recovery	1			1		87		89
Effect of netting and allocation of collateral⁽²⁾	9			—		6		15
Total	$	392		$	670	$	93	$	1,155

Liabilities:
Commodity contracts subject to rate recovery	$	11		$	—	$	70	$	81
Effect of netting and allocation of collateral⁽²⁾	(11		)	—		—		(11		)
Total	$	—		$	—	$	70	$	70

	Fair value at December 31, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	503		$	6	$	—	$	509
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	46			11		—		57
Municipal bonds	—			282		—		282
Other securities	—			226		—		226
Total debt securities	46			519		—		565
Total nuclear decommissioning trusts⁽¹⁾	549			525		—		1,074
Commodity contracts subject to rate recovery	1			3		95		99
Effect of netting and allocation of collateral⁽²⁾	10			—		6		16
Total	$	560		$	528	$	101	$	1,189

Liabilities:
Commodity contracts subject to rate recovery	$	14		$	—	$	67	$	81
Effect of netting and allocation of collateral⁽²⁾	(14		)	—		—		(14		)
Total	$	—		$	—	$	67	$	67


⁽¹⁾	Excludes cash and cash equivalents.


⁽²⁾	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.



RECURRING FAIR VALUE MEASURES – SOCALGAS
(Dollars in millions)
	Fair value at June 30, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	2	$	2	$	—	$	4
Effect of netting and allocation of collateral⁽¹⁾	4		—		—		4
Total	$	6	$	2	$	—	$	8

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	6	$	—	$	6
Total	$	—	$	6	$	—	$	6

	Fair value at December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	4	$	5	$	—	$	9
Effect of netting and allocation of collateral⁽¹⁾	1		8		—		9
Total	$	5	$	13	$	—	$	18

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	4	$	—	$	4
Total	$	—	$	4	$	—	$	4

⁽¹⁾

Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.

Recurring Fair Value Measures Level 3 Rollforward Table

The table below sets forth reconciliations of changes in the fair value of CRRs and long-term, fixed-price electricity positions classified as Level 3 in the fair value hierarchy for Sempra Energy Consolidated and SDG&E.



LEVEL 3 RECONCILIATIONS⁽¹⁾
(Dollars in millions)
	Three months ended June 30,
	2020			2019
Balance at April 1	$	16		$	182
Realized and unrealized (losses) gains	(9		)	(13		)
Allocated transmission instruments	1			—
Settlements	9			7
Balance at June 30	$	17		$	176
Change in unrealized gains (losses) relating to instruments still held at June 30	$	(5	)	$	(3	)
	Six months ended June 30,
	2020			2019
Balance at January 1	$	28		$	179
Realized and unrealized (losses) gains	(14		)	(8		)
Allocated transmission instruments	1			—
Settlements	2			5
Balance at June 30	$	17		$	176
Change in unrealized gains (losses) relating to instruments still held at June 30	$	(13	)	$	9

⁽¹⁾

Excludes the effect of the contractual ability to settle contracts under master netting agreements.

Schedule of Fair Value Inputs

For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:



CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS

Settlement year	Price per MWh						Median price per MWh
2020	$	(3.77	)	to	$	6.03	$	(1.58	)
2019	(8.57		)	to	35.21		(2.94		)

The fair value of the net electricity positions classified as Level 3 is derived from a discounted cash flow model using market electricity forward price inputs. The range and weighted-average price of these inputs at June 30 were as follows:



LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS

Settlement year	Price per MWh					Weighted-average price per MWh
2020	$	20.35	to	$	51.60	$	34.68
2019		22.00	to		62.65		41.50

Fair Value of Financial Instruments Table

The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Condensed Consolidated Balance Sheets.



FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
	June 30, 2020
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates⁽¹⁾	$	606	$	—	$	632	$	—	$	632
Long-term amounts due to unconsolidated affiliates	267		—		245		—		245
Total long-term debt⁽²⁾	21,720		—		24,270		—		24,270
SDG&E:
Total long-term debt⁽³⁾	$	5,723	$	—	$	6,759	$	—	$	6,759
SoCalGas:
Total long-term debt⁽⁴⁾	$	4,459	$	—	$	5,282	$	—	$	5,282

	December 31, 2019
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates	$	742	$	—	$	759	$	—	$	759
Long-term amounts due to unconsolidated affiliates	195		—		184		—		184
Total long-term debt⁽²⁾	21,247		—		22,638		26		22,664
SDG&E:
Total long-term debt⁽³⁾	$	5,140	$	—	$	5,662	$	—	$	5,662
SoCalGas:
Total long-term debt⁽⁴⁾	$	3,809	$	—	$	4,189	$	—	$	4,189


⁽¹⁾	Before allowances for credit losses of $3 million at June 30, 2020.


⁽²⁾	Before reductions of unamortized discount and debt issuance costs of $228 million and $225 million at June 30, 2020 and December 31, 2019, respectively, and excluding finance lease obligations of $1,328 million and $1,289 million at June 30, 2020 and December 31, 2019, respectively.


⁽³⁾	Before reductions of unamortized discount and debt issuance costs of $51 million and $48 million at June 30, 2020 and December 31, 2019, respectively, and excluding finance lease obligations of $1,278 million and $1,270 million at June 30, 2020 and December 31, 2019, respectively.


⁽⁴⁾	Before reductions of unamortized discount and debt issuance costs of $40 million and $34 million at June 30, 2020 and December 31, 2019, respectively, and excluding finance lease obligations of $50 million and $19 million at June 30, 2020 and December 31, 2019, respectively.