1.0.0.3falseVARIABLE INTEREST ENTITIESfalse1$falsefalse20sre_NotesToConsolidatedFinancialStatementsAbstractsrefalsenadurationstringNo definition available.falsefalsefalsefalsefalsetruefalsefalsefalse1falsefalse00falsefalseNo definition available.false31us-gaap_ScheduleOfVariableInterestEntitiesTextBlockus-gaaptruenadurationstringNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalse00<HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV><FONT size="2"><P>NOTE 5. OTHER FINANCIAL DATA</P></FONT></DIV><DIV><FONT size="2"><P>VARIABLE INTEREST ENTITIES<BR/>FIN 46(R) (ASC 810) requires an enterprise to consolidate a variable interest entity (VIE), as defined in FIN 46(R), if the company is the primary beneficiary of the VIE’s activities. Our determination of whether we are the primary beneficiary is based upon qualitative and quantitative analyses, which assess<BR/><UL><LI>the purpose and design of the VIE;<BR/></LI><LI>the nature of the VIE's risks and the risks we absorb; and<BR/></LI><LI>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). <BR/></LI></UL>SDG&E has a 10-year agreement to purchase power to be generated at the Otay Mesa Energy Center (OMEC), a 573-megawatt (MW) generating facility. Commissioning activities commenced in July 2009, and SDG&E expects the facility to be in commercial operation in the fourth quarter of 2009. <BR/>As defined in FIN 46(R), the facility owner, Otay Mesa Energy Center LLC (OMEC LLC), is a VIE (Otay Mesa VIE), of which SDG&E is the primary beneficiary. Accordingly, Sempra Energy and SDG&E have consolidated Otay Mesa VIE. SDG&E has no OMEC LLC voting rights and does not operate OMEC.<BR/>Otay Mesa VIE's equity of $158 million at June 30, 2009 and $128 million at December 31, 2008 is included on the Condensed Consolidated Balance Sheets in Other Noncontrolling Interests for Sempra Energy and in Noncontrolling Interest for SDG&E. We provide additional information about Otay Mesa VIE in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.<BR/>OMEC LLC has a project finance credit facility with third party lenders, secured by its assets, that provides for up to $377 million for the construction of OMEC. SDG&E is not a party to the credit agreement and does not have any additional implicit or explicit financial responsibility to Otay Mesa VIE. The loan matures in April 2019. Borrowings under the facility bear interest at rates varying with market rates. OMEC LLC had $316 million of outstanding borrowings under this facility at June 30, 2009. In addition, OMEC LLC has entered into interest-rate swap agreements to moderate its exposure to interest-rate changes on this facility. We provide additional information concerning the interest-rate swaps in Note 7.</P></FONT></DIV><DIV><FONT size="2"><P>Contracts under which SDG&E acquires power from generation facilities otherwise unrelated to SDG&E could also result in a requirement for SDG&E to consolidate the entity that owns the facility. In accordance with FIN 46(R), SDG&E continues the process of determining if it has any such situations and, if so, gathering the information that would be needed to perform the consolidation. However, such information has not been made available to us and an evaluation of variable interests has not been completed for these entities that are grandfathered pursuant to FIN 46(R). The effects of any required consolidation are not expected to significantly affect the financial position, results of operations or liquidity of SDG&E.</P></FONT></DIV></BODY></HTML>NOTE 5. OTHER FINANCIAL DATAVARIABLE INTEREST ENTITIESFIN 46(R) (ASC 810) requires an enterprise to consolidate a variable interest entity (VIE), as defined infalsefalseNo definition available.No authoritative reference available.falsefalse12falseUnKnownUnKnownUnKnownfalsetrue