1.0.0.3 false DERIVATIVE FINANCIAL INSTRUMENTS false 1 $ false false 2 Notes to Condensed Consolidated Financial Statements 0 sre_NotesToConsolidatedFinancialStatementsAbstract sre false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 Derivative Instruments and Hedging Activities Disclosure [Text Block] 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <HTML><HEAD><META content="text/html; charset=utf-8" /></HEAD><BODY><DIV>NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS On January 1, 2009, we adopted SFAS 161 as discussed in Note 2. The adoption of SFAS 161 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. All derivatives are recorded at fair value on the Condensed Consolidated Balance Sheets. Each derivative is designated as 1) a cash flow hedge, 2) a fair value hedge, or 3) is undesignated. Depending on the applicability of hedge accounting and, for the Sempra Utilities, 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. 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. </DIV><DIV>HEDGE ACCOUNTING We 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 criteria.</DIV><DIV>ENERGY DERIVATIVES Our market risk is primarily related to natural gas and electricity price volatility and the specific physical locations where we transact. We use energy derivatives to manage these risks. The use of energy derivatives in our various businesses depends on the particular energy market, and the operating and regulatory environments applicable to the business. <UL><LI>The Sempra Utilities use natural gas energy derivatives, on their customers' behalf, with the objective of managing price risk and lowering natural gas costs. These derivatives include fixed price natural gas positions, options and basis risk instruments. These transaction programs are governed by risk management and transacting activity plans that have been filed with and approved by the California Public Utilities Commission (CPUC). Natural gas derivative activities are recorded as commodity costs. Commodity costs are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Condensed Consolidated Statements of Operations are reflected in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas. </LI><LI>SDG&E is allocated and may purchase congestion revenue rights (CRRs), which serve to reduce electricity transmission risk on behalf of customers. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. We provide further discussion in Note 8. </LI><LI>Sempra Generation uses natural gas and electricity instruments to market and optimize the earnings of their power generation fleet. Gains and losses associated with these derivatives are recognized in Sempra Global and Parent Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. </LI><LI>Sempra LNG and Sempra Pipelines & Storage use natural gas derivatives to market and optimize the earnings of the liquefied natural gas (LNG) business and Sempra Pipelines & Storage's natural gas storage and transportation assets. Sempra LNG derivatives are undesignated and their impact on earnings is recorded in Sempra Global and Parent Revenues on the Condensed Consolidated Statements of Operations. Sempra Pipelines & Storage derivatives are either designated as cash flow hedges or are undesignated. The impacts on earnings are recognized in Sempra Global and Parent Revenues or in Cost of Natural Gas, Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. </LI></UL>From time to time, our various businesses, including the Sempra Utilities, may use other energy derivatives to hedge exposures such as the price of vehicle fuel. These derivatives are typically accounted for as cash flow hedges. We summarize net commodity derivative volumes as of June 30, 2009 as follows:</DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="3" width="281" height="14" align="left" style="border-bottom: 1px solid #000000;">Business Unit and Commodity</TD><TD width="124" height="14" align="center" style="border-bottom: 1px solid #000000;">Volume</TD><TD width="37" height="14" align="left" style="border-bottom: 1px solid #000000;"> </TD></TR><TR><TD colspan="3" width="281" height="17" align="left" style="border-top: 1px solid #000000;">Sempra Utilities:</TD><TD width="124" height="17" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="37" height="17" align="left" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD colspan="2" width="255" height="17" align="left">SDG&E:</TD><TD width="124" height="17" align="right"> </TD><TD width="37" height="17" align="left"> </TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD width="19" height="17" align="left"> </TD><TD width="236" height="17" align="left">Natural gas</TD><TD width="124" height="17" align="right">26 million MMBtu</TD><TD width="37" height="17" align="left">*</TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD width="19" height="17" align="left"> </TD><TD width="236" height="17" align="left">Congestion revenue rights</TD><TD width="124" height="17" align="right">11 million MWh</TD><TD width="37" height="17" align="left">**</TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD colspan="2" width="255" height="17" align="left">SoCalGas - natural gas</TD><TD width="124" height="17" align="right">3 million MMBtu</TD><TD width="37" height="17" align="left"> </TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD width="19" height="17" align="left"> </TD><TD width="236" height="17" align="left"> </TD><TD width="124" height="17" align="right"> </TD><TD width="37" height="17" align="left"> </TD></TR><TR><TD colspan="3" width="281" height="17" align="left">Sempra Global:</TD><TD width="124" height="17" align="right"> </TD><TD width="37" height="17" align="left"> </TD></TR><TR><TD width="26" height="17" align="left"> </TD><TD colspan="2" width="255" height="17" align="left">Sempra LNG - natural gas</TD><TD width="124" height="17" align="right">9 million MMBtu</TD><TD width="37" height="17" align="left"> </TD></TR><TR><TD width="26" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD colspan="2" width="255" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;">Sempra Generation - electric power</TD><TD width="124" height="18" align="right" style="border-bottom: 3px solid #C0C0C0;">1 million MWh</TD><TD width="37" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="26" height="17" align="right" style="border-top: 3px solid #C0C0C0;">*</TD><TD colspan="3" width="379" height="17" align="left" style="border-top: 3px solid #C0C0C0;">Million British thermal units (of natural gas)</TD><TD width="37" height="17" align="left" style="border-top: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="26" height="16" align="right">**</TD><TD colspan="3" width="379" height="16" align="left">Megawatt hours</TD><TD width="37" height="16" align="left"> </TD></TR></TABLE></DIV><DIV>In addition to the amounts noted above, we frequently use commodity derivatives to manage risks associated with the physical locations of our customers, assets and other contractual obligations, such as natural gas purchases.</DIV><DIV>INTEREST-RATE DERIVATIVES We are exposed to interest-rate changes primarily as a result of our current and expected use of financing. We periodically enter into interest-rate derivative agreements intended to moderate our exposure to interest-rate changes and to lower our overall costs of borrowing. We utilize fixed-to-floating interest-rate swaps, which are typically designated as fair-value hedges, as a means to achieve our targeted level of variable-rate debt as a percent of total debt. In addition, we utilize floating-to-fixed interest-rate derivatives, which are typically designated as cash flow hedges, to lock in interest rates in anticipation of future financings. Interest-rate derivatives are utilized by the Sempra Utilities as well as by other Sempra Energy subsidiaries. Although the Sempra Utilities generally recover borrowing costs in rates over time, and the use of interest-rate derivatives is subject to certain regulatory constraints, the impact of interest-rate derivatives may not be recovered from customers as timely as described above with regard to natural gas derivatives. Accordingly, interest-rate derivatives are generally accounted for as hedges at the Sempra Utilities, as at the rest of Sempra Energy's subsidiaries. The net notional amount of our interest-rate derivatives as of June 30, 2009 was: </DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD width="278" height="14" align="left"> </TD><TD colspan="3" width="186" height="14" align="center" style="border-bottom: 1px solid #000000;">June 30, 2009</TD></TR><TR><TD width="278" height="14" align="left" style="border-bottom: 1px solid #000000;">(Dollars in millions)</TD><TD colspan="2" width="97" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Notional Debt</TD><TD width="89" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Maturities</TD></TR><TR><TD width="278" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated*</TD><TD width="22" height="16" align="right" style="border-top: 1px solid #000000;">$</TD><TD width="75" height="16" align="right" style="border-top: 1px solid #000000;">215-355</TD><TD width="89" height="16" align="right" style="border-top: 1px solid #000000;">2009-2019</TD></TR><TR><TD width="278" height="16" align="left">SDG&E*</TD><TD width="22" height="16" align="right"> </TD><TD width="75" height="16" align="right">285-375</TD><TD width="89" height="16" align="right">2019</TD></TR><TR><TD width="278" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">SoCalGas</TD><TD width="22" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="75" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">150</TD><TD width="89" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">2011</TD></TR><TR><TD colspan="4" width="464" height="16" align="left" style="border-top: 3px solid #C0C0C0;">* Includes Otay Mesa VIE. All of SDG&E's interest-rate derivatives relate to Otay Mesa VIE.</TD></TR></TABLE></DIV><DIV>FINANCIAL STATEMENT PRESENTATION The following table provides the fair values of derivative instruments, without consideration of margin deposits held or posted, on the Condensed Consolidated Balance Sheets as of June 30, 2009: </DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="10" width="670" height="19" align="left" style="border-top: 1px solid #000000;">DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS</TD></TR><TR><TD colspan="10" width="670" height="19" align="left">(Dollars in millions)</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD colspan="8" width="372" height="14" align="center" style="border-bottom: 1px solid #000000;">June 30, 2009</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="80" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-top: 1px solid #000000;">Deferred</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="center"> </TD><TD width="72" height="14" align="center"> </TD><TD width="19" height="14" align="center"> </TD><TD width="80" height="14" align="center"> </TD><TD width="19" height="14" align="center"> </TD><TD width="72" height="14" align="center"> </TD><TD width="19" height="14" align="center"> </TD><TD width="72" height="14" align="center">credits</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">Current</TD><TD width="19" height="14" align="right"> </TD><TD width="80" height="14" align="center"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">Current</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">and other</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">assets:</TD><TD width="19" height="14" align="right"> </TD><TD width="80" height="14" align="center"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">liabilities:</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">liabilities:</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">Fixed-price</TD><TD width="19" height="14" align="right"> </TD><TD width="80" height="14" align="center">Investments</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">Fixed-price</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">Fixed-price</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="286" height="14" align="left"> </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">contracts</TD><TD width="19" height="14" align="right"> </TD><TD width="80" height="14" align="center">and other</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">contracts</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">contracts</TD></TR><TR><TD colspan="2" width="298" height="14" align="left">Derivatives designated as hedging instruments </TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">and other</TD><TD width="19" height="14" align="right"> </TD><TD width="80" height="14" align="center">assets:</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">and other</TD><TD width="19" height="14" align="right"> </TD><TD width="72" height="14" align="center">and other</TD></TR><TR><TD width="12" height="14" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="286" height="14" align="left" style="border-bottom: 1px solid #000000;">under SFAS 133</TD><TD width="19" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-bottom: 1px solid #000000;">derivatives</TD><TD width="19" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="14" align="center" style="border-bottom: 1px solid #000000;">Sundry</TD><TD width="19" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-bottom: 1px solid #000000;">derivatives</TD><TD width="19" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="14" align="center" style="border-bottom: 1px solid #000000;">derivatives</TD></TR><TR><TD colspan="2" width="298" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="80" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="center" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Interest-rate instruments</TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 35 </TD><TD width="19" height="16" align="right">$</TD><TD width="80" height="16" align="right"> 8 </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> - </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> - </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Commodity contracts not subject to rate recovery</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 3 </TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> - </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 8 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 5 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">    Associated offsetting commodity contracts</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 38 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 8 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 8 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 5 </TD></TR><TR><TD colspan="2" width="298" height="16" align="left" style="border-top: 3px solid #000000;">SoCalGas:</TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 3px solid #000000;">Interest-rate instruments</TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-bottom: 3px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #000000;">$</TD><TD width="80" height="16" align="right" style="border-bottom: 3px solid #000000;"> 8 </TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-bottom: 3px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-bottom: 3px solid #000000;"> - </TD></TR><TR><TD width="12" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="left" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD colspan="2" width="298" height="16" align="left">Derivatives not designated as hedging instruments</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> </TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 1px solid #000000;">under SFAS 133</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD></TR><TR><TD colspan="2" width="298" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Interest-rate instruments*</TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 7 </TD><TD width="19" height="16" align="right">$</TD><TD width="80" height="16" align="right"> 21 </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 21 </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 47 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Commodity contracts not subject to rate recovery</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 120 </TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> 52 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 106 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 62 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">    Associated offsetting commodity contracts</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> (61)</TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> (25)</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> (61)</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> (25)</TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Commodity contracts subject to rate recovery</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 24 </TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> 12 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 54 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 6 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">    Associated offsetting commodity contracts</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (47)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (47)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 43 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 54 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 73 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 84 </TD></TR><TR><TD colspan="2" width="298" height="16" align="left" style="border-top: 3px solid #000000;">SDG&E:</TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Interest-rate instruments*</TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> - </TD><TD width="19" height="16" align="right">$</TD><TD width="80" height="16" align="right"> - </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 15 </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 34 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Commodity contracts subject to rate recovery</TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 15 </TD><TD width="19" height="16" align="right"> </TD><TD width="80" height="16" align="right"> 12 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 48 </TD><TD width="19" height="16" align="right"> </TD><TD width="72" height="16" align="right"> 6 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">    Associated offsetting commodity contracts</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (41)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (41)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> (26)</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 6 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 22 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 34 </TD></TR><TR><TD colspan="2" width="298" height="16" align="left" style="border-top: 3px solid #000000;">SoCalGas:</TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">Commodity contracts subject to rate recovery</TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 9 </TD><TD width="19" height="16" align="right">$</TD><TD width="80" height="16" align="right"> - </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> 6 </TD><TD width="19" height="16" align="right">$</TD><TD width="72" height="16" align="right"> - </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="286" height="16" align="left">    Associated offsetting commodity contracts</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="80" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD><TD width="19" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="72" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="286" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 3 </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="80" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> - </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="72" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> - </TD></TR><TR><TD width="12" height="16" align="left" style="border-top: 3px solid #000000;">*</TD><TD colspan="9" width="658" height="16" align="left" style="border-top: 3px solid #000000;">Includes Otay Mesa VIE. All of SDG&E's amounts relate to Otay Mesa VIE.</TD></TR></TABLE></DIV><DIV>The effects of derivative instruments designated as hedges under SFAS 133 on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 were: </DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="8" width="640" height="19" align="left" style="border-top: 1px solid #000000;">FAIR VALUE HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</TD></TR><TR><TD colspan="8" width="640" height="19" align="left">(Dollars in millions)</TD></TR><TR><TD width="19" height="14" align="left"> </TD><TD width="195" height="14" align="left"> </TD><TD colspan="3" width="213" height="14" align="center" style="border-bottom: 1px solid #000000;">Three months ended June 30, 2009</TD><TD colspan="3" width="213" height="14" align="center" style="border-bottom: 1px solid #000000;">Six months ended June 30, 2009</TD></TR><TR><TD width="19" height="14" align="left"> </TD><TD width="195" height="14" align="left"> </TD><TD colspan="3" width="213" height="14" align="center" style="border-top: 1px solid #000000;">Gain (loss) on derivative </TD><TD colspan="3" width="213" height="14" align="center" style="border-top: 1px solid #000000;">Gain (loss) on derivative </TD></TR><TR><TD width="19" height="14" align="left"> </TD><TD width="195" height="14" align="left"> </TD><TD colspan="3" width="213" height="14" align="center" style="border-bottom: 1px solid #000000;">recognized in earnings</TD><TD colspan="3" width="213" height="14" align="center" style="border-bottom: 1px solid #000000;">recognized in earnings</TD></TR><TR><TD colspan="2" width="214" height="14" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="134" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Location</TD><TD width="19" height="14" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"> </TD><TD width="60" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Amount</TD><TD width="134" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Location</TD><TD width="19" height="14" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"> </TD><TD width="60" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Amount</TD></TR><TR><TD colspan="2" width="214" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="134" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="60" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="134" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="60" height="16" align="center" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="19" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="195" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest-rate instruments*</TD><TD width="134" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Other Income, Net</TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="60" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (1)</TD><TD width="134" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Other Income, Net</TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="60" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (7)</TD></TR><TR><TD colspan="2" width="214" height="16" align="left" style="border-top: 3px solid #C0C0C0;">SoCalGas:</TD><TD width="134" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="60" height="16" align="center" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="134" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="19" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="60" height="16" align="center" style="border-top: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="19" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="195" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest-rate instrument*</TD><TD width="134" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Other Income, Net</TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="60" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> - </TD><TD width="134" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Other Income, Net</TD><TD width="19" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="60" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (2)</TD></TR><TR><TD width="19" height="35" align="right" style="border-top: 3px solid #C0C0C0;">* </TD><TD colspan="7" width="621" height="35" align="left" style="border-top: 3px solid #C0C0C0;">There has been no hedge ineffectiveness on these swaps. Changes in the fair values of the interest-rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt. </TD></TR></TABLE></DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="8" width="636" height="19" align="left" style="border-top: 1px solid #000000;">CASH FLOW HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</TD></TR><TR><TD colspan="8" width="636" height="19" align="left">(Dollars in millions) </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD colspan="5" width="402" height="14" align="center" style="border-bottom: 1px solid #000000;">Three months ended June 30, 2009</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center" style="border-top: 1px solid #000000;">Amount of pretax</TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="180" height="14" align="left" style="border-top: 1px solid #000000;"> </TD><TD width="21" height="14" align="left" style="border-top: 1px solid #000000;"> </TD><TD width="79" height="14" align="left" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">gain (loss)</TD><TD width="19" height="14" align="center"> </TD><TD width="180" height="14" align="left"> </TD><TD width="21" height="14" align="left"> </TD><TD width="79" height="14" align="left"> </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">on derivative</TD><TD width="19" height="14" align="center"> </TD><TD colspan="3" width="280" height="14" align="center">Gain (loss) reclassified from AOCI</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">recognized in OCI</TD><TD width="19" height="14" align="center"> </TD><TD colspan="3" width="280" height="14" align="center" style="border-bottom: 1px solid #000000;">into earnings (effective portion)</TD></TR><TR><TD colspan="2" width="213" height="14" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="21" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="103" height="14" align="center" style="border-bottom: 1px solid #000000;">(effective portion)</TD><TD width="19" height="14" align="center" style="border-bottom: 1px solid #000000;"> </TD><TD width="180" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Location</TD><TD width="21" height="14" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"> </TD><TD width="79" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Amount</TD></TR><TR><TD colspan="2" width="213" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="103" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="180" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="79" height="16" align="right" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Interest-rate instruments</TD><TD width="21" height="16" align="right">$</TD><TD width="103" height="16" align="right"> 24 </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Interest Expense</TD><TD width="21" height="16" align="right">$</TD><TD width="79" height="16" align="right"> (1)</TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Revenues: Sempra Global</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> - </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">    and Parent</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> (1)</TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Cost of Natural Gas, Electric</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="21" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="103" height="16" align="right" style="border-bottom: 1px solid #000000;"> 2 </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">    Fuel and Purchased Power</TD><TD width="21" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="79" height="16" align="right" style="border-bottom: 1px solid #000000;"> (3)</TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="201" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="103" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 26 </TD><TD width="19" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="180" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="79" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> (5)</TD></TR><TR><TD colspan="2" width="213" height="16" align="left" style="border-top: 3px solid #C0C0C0;">SoCalGas:</TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="103" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="19" height="16" align="center" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="79" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="201" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest-rate instrument</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="103" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> - </TD><TD width="19" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest Expense</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="79" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (1)</TD></TR><TR><TD width="12" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="201" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="103" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="19" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="79" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD colspan="5" width="402" height="14" align="center" style="border-bottom: 1px solid #000000;">Six months ended June 30, 2009</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center" style="border-top: 1px solid #000000;">Amount of pretax</TD><TD width="19" height="14" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="180" height="14" align="left" style="border-top: 1px solid #000000;"> </TD><TD width="21" height="14" align="left" style="border-top: 1px solid #000000;"> </TD><TD width="79" height="14" align="left" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">gain (loss)</TD><TD width="19" height="14" align="center"> </TD><TD width="180" height="14" align="left"> </TD><TD width="21" height="14" align="left"> </TD><TD width="79" height="14" align="left"> </TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">on derivative</TD><TD width="19" height="14" align="center"> </TD><TD colspan="3" width="280" height="14" align="center">Gain (loss) reclassified from AOCI</TD></TR><TR><TD width="12" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD width="21" height="14" align="right"> </TD><TD width="103" height="14" align="center">recognized in OCI</TD><TD width="19" height="14" align="center"> </TD><TD colspan="3" width="280" height="14" align="center" style="border-bottom: 1px solid #000000;">into earnings (effective portion)</TD></TR><TR><TD colspan="2" width="213" height="14" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="21" height="14" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="103" height="14" align="center" style="border-bottom: 1px solid #000000;">(effective portion)</TD><TD width="19" height="14" align="center" style="border-bottom: 1px solid #000000;"> </TD><TD width="180" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Location</TD><TD width="21" height="14" align="right" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"> </TD><TD width="79" height="14" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Amount</TD></TR><TR><TD colspan="2" width="213" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="103" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="19" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="180" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="79" height="16" align="right" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Interest-rate instruments</TD><TD width="21" height="16" align="right">$</TD><TD width="103" height="16" align="right"> 21 </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Interest Expense</TD><TD width="21" height="16" align="right">$</TD><TD width="79" height="16" align="right"> (4)</TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Revenues: Sempra Global</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> 11 </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">    and Parent</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> 16 </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Cost of Natural Gas, Electric</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> (2)</TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">    Fuel and Purchased Power</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> (8)</TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="21" height="16" align="right"> </TD><TD width="103" height="16" align="right"> </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">Equity Earnings: RBS</TD><TD width="21" height="16" align="right"> </TD><TD width="79" height="16" align="right"> </TD></TR><TR><TD width="12" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="21" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="103" height="16" align="right" style="border-bottom: 1px solid #000000;"> - </TD><TD width="19" height="16" align="left"> </TD><TD width="180" height="16" align="left">    Sempra Commodities LLP</TD><TD width="21" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="79" height="16" align="right" style="border-bottom: 1px solid #000000;"> (9)</TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="201" height="16" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="103" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 30 </TD><TD width="19" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="180" height="16" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="21" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="79" height="16" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> (5)</TD></TR><TR><TD colspan="2" width="213" height="16" align="left" style="border-top: 3px solid #000000;">SDG&E:</TD><TD width="21" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="103" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="19" height="16" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="180" height="16" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="21" height="16" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="79" height="16" align="right" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="201" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest-rate instruments</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="103" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> - </TD><TD width="19" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest Expense</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="79" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (2)</TD></TR><TR><TD colspan="2" width="213" height="16" align="left" style="border-top: 3px solid #C0C0C0;">SoCalGas:</TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="103" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="19" height="16" align="center" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="21" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD><TD width="79" height="16" align="right" style="border-top: 3px solid #C0C0C0;"> </TD></TR><TR><TD width="12" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="201" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest-rate instrument</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="103" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> - </TD><TD width="19" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="180" height="16" align="left" style="border-bottom: 3px solid #C0C0C0;">Interest Expense</TD><TD width="21" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="79" height="16" align="right" style="border-bottom: 3px solid #C0C0C0;"> (2)</TD></TR></TABLE></DIV><DIV>Sempra Energy expects that losses of $9 million, which are net of income tax benefit, that are currently recorded in Accumulated Other Comprehensive Income (Loss) related to these cash flow hedges will be reclassified into earnings during the next twelve months as the hedged items affect earnings. Actual amounts ultimately reclassified to earnings depend on the commodity prices and interest rates in effect when derivative contracts that are currently outstanding mature. For all forecasted transactions, the maximum term over which we are hedging exposures to the variability of cash flows, excluding interest payments on variable-rate debt, is 36 months at June 30, 2009. SDG&E and SoCalGas expect that gains of a negligible amount and losses of $3 million, respectively, which are net of income tax benefit, that are currently recorded in Accumulated Other Comprehensive Income (Loss) related to these cash flow hedges will be reclassified into earnings during the next twelve months as the hedged items affect earnings. The effects of derivative instruments not designated as hedging instruments under SFAS 133 on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 were:</DIV><DIV><TABLE style="border-collapse: collapse; margin-top: 20px;"><TR><TD colspan="7" width="675" height="19" align="left" style="border-top: 1px solid #000000;">UNDESIGNATED DERIVATIVE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</TD></TR><TR><TD colspan="7" width="675" height="19" align="left">(Dollars in millions)</TD></TR><TR><TD width="19" height="14" align="left"> </TD><TD width="201" height="14" align="left"> </TD><TD colspan="5" width="455" height="14" align="center" style="border-bottom: 1px solid #000000;">Gain (loss) on derivative recognized in earnings</TD></TR><TR><TD colspan="2" width="220" height="44" align="left" style="border-bottom: 1px solid #000000;"> </TD><TD width="234" height="44" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Location</TD><TD colspan="2" width="115" height="44" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Three months ended June 30, 2009</TD><TD colspan="2" width="106" height="44" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;">Six months ended June 30, 2009</TD></TR><TR><TD colspan="2" width="220" height="16" align="left" style="border-top: 1px solid #000000;">Sempra Energy Consolidated:</TD><TD width="234" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="22" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="93" height="16" align="center" style="border-top: 1px solid #000000;"> </TD><TD width="22" height="16" align="right" style="border-top: 1px solid #000000;"> </TD><TD width="84" height="16" align="center" style="border-top: 1px solid #000000;"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Interest-rate instruments*</TD><TD width="234" height="16" align="left">Other Income, Net</TD><TD width="22" height="16" align="right">$</TD><TD width="93" height="16" align="right"> 19 </TD><TD width="22" height="16" align="right">$</TD><TD width="84" height="16" align="right"> 29 </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="234" height="16" align="left"> </TD><TD width="22" height="16" align="left"> </TD><TD width="93" height="16" align="right"> </TD><TD width="22" height="16" align="left"> </TD><TD width="84" height="16" align="right"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="234" height="16" align="left">Revenues: Sempra Global and Parent</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> (9)</TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> (25)</TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts not subject</TD><TD width="234" height="16" align="left">Cost of Natural Gas, Electric</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> </TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="234" height="16" align="left">    Fuel and Purchased Power</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> 11 </TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> 19 </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts subject</TD><TD width="234" height="16" align="left">Cost of Electric Fuel</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> </TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="234" height="16" align="left">    and Purchased Power</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> 43 </TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> (6)</TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts subject</TD><TD width="234" height="16" align="left"> </TD><TD width="22" height="16" align="left"> </TD><TD width="93" height="16" align="right"> </TD><TD width="22" height="16" align="left"> </TD><TD width="84" height="16" align="right"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="234" height="16" align="left">Cost of Natural Gas</TD><TD width="22" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="93" height="16" align="right" style="border-bottom: 1px solid #000000;"> (2)</TD><TD width="22" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="84" height="16" align="right" style="border-bottom: 1px solid #000000;"> (3)</TD></TR><TR><TD width="19" height="17" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="201" height="17" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="234" height="17" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="93" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 62 </TD><TD width="22" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="84" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 14 </TD></TR><TR><TD colspan="2" width="220" height="17" align="left" style="border-top: 3px solid #000000;">SDG&E:</TD><TD width="234" height="17" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="93" height="17" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="84" height="17" align="center" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Interest-rate instruments*</TD><TD width="234" height="16" align="left">Other Income, Net</TD><TD width="22" height="16" align="right">$</TD><TD width="93" height="16" align="right"> 20 </TD><TD width="22" height="16" align="right">$</TD><TD width="84" height="16" align="right"> 30 </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">Commodity contracts subject</TD><TD width="234" height="16" align="left">Cost of Electric Fuel</TD><TD width="22" height="16" align="right"> </TD><TD width="93" height="16" align="right"> </TD><TD width="22" height="16" align="right"> </TD><TD width="84" height="16" align="right"> </TD></TR><TR><TD width="19" height="16" align="left"> </TD><TD width="201" height="16" align="left">    to rate recovery</TD><TD width="234" height="16" align="left">    and Purchased Power</TD><TD width="22" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="93" height="16" align="right" style="border-bottom: 1px solid #000000;"> 43 </TD><TD width="22" height="16" align="right" style="border-bottom: 1px solid #000000;"> </TD><TD width="84" height="16" align="right" style="border-bottom: 1px solid #000000;"> (6)</TD></TR><TR><TD width="19" height="17" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="201" height="17" align="left" style="border-bottom: 3px solid #000000;">Total</TD><TD width="234" height="17" align="left" style="border-bottom: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="93" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 63 </TD><TD width="22" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;">$</TD><TD width="84" height="17" align="right" style="border-top: 1px solid #000000;border-bottom: 3px solid #000000;"> 24 </TD></TR><TR><TD colspan="2" width="220" height="17" align="left" style="border-top: 3px solid #000000;">SoCalGas:</TD><TD width="234" height="17" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="93" height="17" align="center" style="border-top: 3px solid #000000;"> </TD><TD width="22" height="17" align="right" style="border-top: 3px solid #000000;"> </TD><TD width="84" height="17" align="center" style="border-top: 3px solid #000000;"> </TD></TR><TR><TD width="19" height="17" align="left"> </TD><TD width="201" height="17" align="left">Commodity contracts subject</TD><TD width="234" height="17" align="left"> </TD><TD width="22" height="17" align="right"> </TD><TD width="93" height="17" align="left"> </TD><TD width="22" height="17" align="right"> </TD><TD width="84" height="17" align="left"> </TD></TR><TR><TD width="19" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;"> </TD><TD width="201" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;">    to rate recovery</TD><TD width="234" height="18" align="left" style="border-bottom: 3px solid #C0C0C0;">Cost of Natural Gas</TD><TD width="22" height="18" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="93" height="18" align="right" style="border-bottom: 3px solid #C0C0C0;"> (2)</TD><TD width="22" height="18" align="right" style="border-bottom: 3px solid #C0C0C0;">$</TD><TD width="84" height="18" align="right" style="border-bottom: 3px solid #C0C0C0;"> (3)</TD></TR><TR><TD width="19" height="18" align="right" style="border-top: 3px solid #C0C0C0;">*</TD><TD colspan="6" width="656" height="18" align="left" style="border-top: 3px solid #C0C0C0;">Related to Otay Mesa VIE. Sempra Energy Consolidated also includes additional instruments.</TD></TR></TABLE></DIV><DIV>CONTINGENT FEATURES For Sempra Energy and SDG&E, certain of our derivative instruments contain credit limits which vary depending upon our credit rating.  Generally, these provisions, if applicable, may reduce our credit limit if a specified credit rating agency reduces our rating. In certain cases, if our credit rating were to fall below investment grade, the counterparty to these derivative liability instruments could request immediate payment or demand immediate and ongoing full collateralization.  For Sempra Energy, the total fair value of this group of derivative instruments in a net liability position at June 30, 2009 is $21 million. The aggregate fair value of assets that are already posted as collateral at June 30, 2009 is $6 million. As of June 30, 2009, if both the credit ratings of Sempra Energy and SDG&E were reduced below investment grade, $15 million of additional assets ($8 million by Sempra Energy and $7 million by SDG&E) could be required to be posted as collateral for these derivative contracts. For SDG&E, the total fair value of this group of derivative instruments in a net liability position at June 30, 2009 is $13 million. The aggregate fair value of assets that are already posted as collateral at June 30, 2009 is $6 million. As of June 30, 2009, if SDG&E’s credit rating were reduced below investment grade, $7 million of additional assets could be required to be posted as collateral for these derivative contracts. For Sempra Energy, SDG&E, PE and SoCalGas, some of our derivative contracts contain a provision that would permit the counterparty, in certain circumstances, to request adequate assurance of our performance under the contract. Such additional assurance, if needed, is not material and is not included in the amounts above. </DIV></BODY></HTML> NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTSOn January 1, 2009, we adopted SFAS 161 as discussed in Note 2. The adoption of SFAS 161 had no impact on our false false No definition available. 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