2.2.0.25falsefalse011500 - Disclosure - SEMPRA UTILITIES' REGULATORY MATTERStruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) $FROM_Jan01_2010_TO_Dec31_2010http://www.sec.gov/CIK0001032208duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170PureStandardhttp://www.xbrl.org/2003/instancepurexbrli0SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0sre_NotesToConsolidatedFinancialStatementsAbstractsrefalsenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseNotes to Consolidated Financial Statements [Abstract]3false0us-gaap_PublicUtilitiesDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00NOTE 15. OTHER REGULATORY MATTERSGeneral Rate Case (GRC)The CPUC uses a general rate case proceeding to prospectively set rates sufficient to allow the Sempra Utilities to recover their reasonable cost of operations and to provide the opportunity to realize an acceptable rate of return on their investment. In December 2010, the Sempra Utilities filed their 2012 General Rate Case (GRC) applications to establish their authorized 2012 revenue requirements and the ratemaking mechanisms by which those requirements will change on an annual basis over the subsequent three-year (2013-2015) period. Fuel purchased to supply power plants, purchased power and natural gas costs are not included in the applications. In its request, SDG&E is seeking an increase of $253 million ($39 million for natural gas operations, and $214 million for electric operations) in 2012, relative to its authorized revenue requirement in 2011. SoCalGas is seeking an increase of $280 million in 2012. Certain provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provide for companies to elect to deduct bonus depreciation for certain investments made after September 8, 2010 through December 31, 2012. This bonus depreciation will reduce SDG&E's and SoCalGas' rate base below the level included in the applications, and therefore reduce the amount of the increase requested by SDG&E and SoCalGas. Both SDG&E and SoCalGas will be advising the CPUC of the impact of the bonus depreciation in early 2011. We expect final CPUC decisions in late 2011, with changes in rates to become effective on January 1, 2012.Utility Incentive Mechanisms The CPUC applies performance-based measures and incentive mechanisms to all California utilities. Under these, the Sempra Utilities have earnings potential above authorized base margins if they achieve or exceed specific performance and operating goals. Generally, for performance-based awards, if performance is above or below specific benchmarks, the utility is eligible for financial awards or subject to financial penalties. There are four general areas that operate under an incentive structure: <ul><li style="margin-left:9.35px;list-style:square;">operational incentives </li><li style="margin-left:9.35px;list-style:square;">energy efficiency/demand side management </li><li style="margin-left:9.35px;list-style:square;">natural gas procurement </li></ul><ul><li style="margin-left:9.35px;list-style:square;">unbundled natural gas storage and system operator hub services</li></ul>Incentive awards are included in our earnings when we receive any required CPUC approval of the award. We would record penalties for results below the specified benchmarks in earnings when we believe it is more likely than not that the CPUC would assess a penalty. We provide a summary of the incentive awards recognized below.<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 17px"><td style="width: 342px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:342px;">UTILITY INCENTIVE AWARDS 2008-2010</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 18px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:1px;text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 22px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:1px;text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 14px; border-top-style:solid;border-top-width:1px;text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:342px;">(Dollars in millions)</td><td style="width: 18px; text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 18px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 22px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;background-color:#C0C0C0;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:64px;"> </td><td style="width: 14px; text-align:left;background-color:#C0C0C0;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;"> </td><td colspan="9" style="width: 307px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:307px;">Years ended December 31,</td></tr><tr style="height: 17px"><td style="width: 342px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:342px;"> </td><td colspan="3" style="width: 100px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:100px;">2010</td><td colspan="3" style="width: 106px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:106px;">2009</td><td colspan="3" style="width: 101px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:101px;">2008</td></tr><tr style="height: 17px"><td style="width: 342px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:342px;">Sempra Energy Consolidated</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 18px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 22px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 14px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Energy efficiency and demand side management</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 15</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 2</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 28</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Unbundled natural gas storage and hub services</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 15</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 19</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 15</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Natural gas procurement</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 12</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 7</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 12</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Operational incentives</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 1</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 1</td><td style="width: 22px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 12</td><td style="width: 14px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 18px"><td style="width: 342px; border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:342px;">Total awards</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 43</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 29</td><td style="width: 22px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 67</td><td style="width: 14px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:342px;">SDG&E</td><td style="width: 18px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 18px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 22px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 14px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Energy efficiency and demand side management</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 5</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> ―</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 23</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Natural gas procurement</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> ―</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> ―</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 3</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Operational incentives</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 1</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 1</td><td style="width: 22px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 10</td><td style="width: 14px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 18px"><td style="width: 342px; border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:342px;">Total awards</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 6</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 1</td><td style="width: 22px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 36</td><td style="width: 14px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:342px;">SoCalGas</td><td style="width: 18px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 18px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 22px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:2px;text-align:right;border-color:#000000;min-width:64px;"> </td><td style="width: 14px; border-top-style:solid;border-top-width:2px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Energy efficiency and demand side management</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 10</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 2</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 5</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Unbundled natural gas storage and hub services</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 15</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 19</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 15</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Natural gas procurement</td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 12</td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 7</td><td style="width: 22px; text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"> 9</td><td style="width: 14px; text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 17px"><td style="width: 342px; text-align:left;border-color:#000000;min-width:342px;">Operational incentives</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:18px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> ―</td><td style="width: 18px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:20px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> ―</td><td style="width: 22px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:23px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"> 2</td><td style="width: 14px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr><tr style="height: 18px"><td style="width: 342px; border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:342px;">Total awards</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:18px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 37</td><td style="width: 18px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 20px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:20px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 28</td><td style="width: 22px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:22px;"> </td><td style="width: 23px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:23px;">$</td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:64px;"> 31</td><td style="width: 14px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:14px;"> </td></tr></table></div>Energy Efficiency and Demand Side Management The CPUC established incentive mechanisms that are based on the effectiveness of energy efficiency and demand side management programs. In December 2009, the CPUC awarded $0.3 million and $2.1 million, net of a 35 percent holdback pending a final true-up in 2010, to SDG&E and SoCalGas, respectively, for their performance during the 2006 – 2008 program period. In February 2010, the Sempra Utilities filed a petition with the CPUC to correct errors in the computation of these awards. In December 2010, the CPUC additionally awarded $5.1 million and $9.9 million to SDG&E and SoCalGas, respectively, as the final true-up incentive awards for the 2006 – 2008 program period, which amounts incorporate the Sempra Utilities' petition to correct computational errors. The Sempra Utilities will file requests with the CPUC in June 2011 for any incentive awards for the 2009 program year. The CPUC is also considering future modifications to the incentive mechanism. A decision is expected in early 2011 and would apply to the 2012 – 2014 program period. Natural Gas ProcurementThe Sempra Utilities procure natural gas on behalf of their core natural gas customers. The CPUC has established incentive mechanisms to allow the Sempra Utilities the opportunity to share in the savings and/or costs from buying natural gas for its core customers at prices below or above monthly market-based benchmarks. Beginning April 1, 2008, the SDG&E and SoCalGas core natural gas supply portfolios were combined, and SoCalGas now procures natural gas for SDG&E's core natural gas customers' requirements. All SDG&E assets associated with its core natural gas supply portfolio were transferred or assigned to SoCalGas. Accordingly, SDG&E's incentive mechanism for natural gas procurement awards or penalties ended as of the effective date of the combination of the core natural gas supply portfolios, and SoCalGas' gas cost incentive mechanism (GCIM) is applied on the combined portfolio basis going forward. In January 2010, the CPUC approved a GCIM award of $12 million for SoCalGas' procurement activities during the 12-month period ending March 31, 2009. In June 2010, SoCalGas applied to the CPUC for approval of a GCIM award of $6 million for procurement activities during the 12-month period ending March 31, 2010. SoCalGas expects a CPUC decision in the third quarter of 2011. Unbundled Natural Gas Storage and System Operator Hub ServicesThe CPUC has established a revenue sharing mechanism which provides for the sharing between ratepayers and SoCalGas (shareholders) of the net revenues generated by SoCalGas' unbundled natural gas storage and system operator hub services. Annual net revenues (revenues less allocated service costs) are shared on a graduated basis, as follows: <ul><li style="margin-left:9.35px;list-style:square;">the first $15 million of net revenue to be shared 90 percent ratepayers/10 percent shareholders; </li><li style="margin-left:9.35px;list-style:square;">the next $15 million of net revenue to be shared 75 percent ratepayers/25 percent shareholders; </li><li style="margin-left:9.35px;list-style:square;">all additional net revenues to be shared evenly between ratepayers and shareholders; and</li></ul><ul><li style="margin-left:9.35px;list-style:square;">the maximum total annual shareholder-allocated portion of the net revenues cannot exceed $20 million.</li></ul>Operational IncentivesThe CPUC may establish operational incentives and associated performance benchmarks as part of a general rate case or cost of service proceeding. The Sempra Utilities currently have operational incentives that apply to their performance in the area of employee safety.Cost of CapitalA cost of capital proceeding determines the Sempra Utilities' authorized capital structure and the authorized rate of return that the Sempra Utilities may earn on their electric and natural gas distribution and electric generation assets.SDG&E's authorized return on equity (ROE) is 11.10 percent and its authorized return on rate base (ROR) is 8.40 percent. SDG&E's current authorized capital structure is<ul><li style="margin-left:9.35px;list-style:square;">49.0 percent common equity</li><li style="margin-left:9.35px;list-style:square;">5.75 percent preferred equity</li></ul><ul><li style="margin-left:9.35px;list-style:square;">45.25 percent long-term debt </li></ul>Unless the benchmark interest rates, as described below, change from current levels, the authorized ROE and ROR will remain in effect until SDG&E's next cost of capital proceeding is completed. SDG&E's next cost of capital application is scheduled to be filed in April 2012 for a 2013 test year, consistent with the schedule for cost of capital applications for each of Southern California Edison (Edison) and Pacific Gas and Electric (PG&E).SoCalGas' authorized ROE is 10.82 percent and its authorized ROR is 8.68 percent. These rates continue to be effective until market interest rate changes are large enough to trigger an automatic adjustment or until the CPUC orders a periodic review. In its 2012 GRC application, SoCalGas requested to file its next cost of capital application in April 2012 for a 2013 test year, at the same time as the other utilities. SoCalGas' current authorized capital structure is<ul><li style="margin-left:9.35px;list-style:square;">48.0 percent common equity</li><li style="margin-left:9.35px;list-style:square;">6.39 percent preferred equity</li></ul><ul><li style="margin-left:9.35px;list-style:square;">45.61 percent long-term debt</li></ul>In addition to establishing the authorized rate of return, a cost of capital proceeding also addresses market-based benchmarks to be monitored to determine whether an adjustment to the established authorized rate of return is required during the interim years between cost of capital proceedings. SDG&E's cost of capital benchmark is based on the 12-month average monthly A-rated utility bond yield as published by Moody's for the 12-month period October through September of each fiscal year. If this 12-month average falls outside of the range of 5.02 percent to 7.02 percent, SDG&E's authorized rate of return would be adjusted, upward or downward, by one-half of the difference between the 12-month average and 6.02 percent (SDG&E's benchmark interest rate), effective January 1 following the year in which the benchmark range was exceeded.SoCalGas' cost of capital trigger mechanism identifies two conditions for determining whether a change in the authorized rate of return is required. Both conditions are based on the 30-year Treasury Bond Yields – one being the most recent 12-month rolling average yield and the second being the corresponding 12-month forecasted rolling yield on 30-year Treasury Bonds as published by Global Insights. If both interest rates fall outside a range of 3.88 percent to 6.88 percent, SoCalGas' authorized rate of return would be adjusted, upward or downward, by one-half of the difference between the historical 12-month rolling average yield and 5.38 percent (SoCalGas' benchmark interest rate), effective January 1 following the year in which both conditions were exceeded.At December 31, 2010, neither SDG&E's nor SoCalGas' benchmark ranges have been exceeded.Advanced Metering Infrastructure SDG&EIn April 2007, the CPUC approved SDG&E's request to install advanced meters with integrated two-way communications functionality, including electric remote disconnect and home area network capability. SDG&E estimates expenditures for this project of $572 million (including approximately $480 million in capital investment). As of December 31, 2010, SDG&E had spent approximately $370 million on the project. This project involves replacing approximately 1.4 million electric meters and 850,000 natural gas meters throughout SDG&E's service territory. As of January 2011, SDG&E has installed approximately 1.2 million electric and 770,000 natural gas advanced meters, and is on schedule to substantially complete the project by the end of 2011. SoCalGasIn April 2010, the CPUC issued a decision approving SoCalGas' application to upgrade approximately six million natural gas meters with an advanced metering infrastructure (AMI), subject to certain safeguards to better ensure its cost effectiveness for ratepayers. The approved cost of the project is $1.05 billion (including approximately $900 million in capital investment), with SoCalGas being subject to risk/reward sharing for costs above or below this amount. Installation of the meters is expected to begin in late 2012 and continue through 2017. In May 2010, The Utility Reform Network (TURN) and the Utility Workers Union of America (UWUA) Local 132, parties opposing SoCalGas' AMI application, filed an application for rehearing of the CPUC's decision. In November 2010, the CPUC denied TURN's request for rehearing and the UWUA withdrew its request.SDG&E REQUEST FOR AUTHORITY TO INVEST IN WIND FARMIn July 2010, SDG&E filed a request with the CPUC seeking authority to make a tax equity investment in the holding company of a wind farm project in an amount not to exceed $600 million. SDG&E is seeking to treat the investment as a rate-based asset for which it would earn its authorized rate of return. A CPUC decision is expected in 2011.If approved by the CPUC, and after the wind farm project has met all of the conditions precedent set forth in the definitive documents, SDG&E would invest in one or more project holding companies in an amount not to exceed 80% of the project costs (not to exceed an aggregate amount of $600 million) upon the initiation of commercial operation of the project. SDG&E expects the project to be in commercial operation in the second half of 2012.2007 wildfires Cost Recovery FOR COMPANY FACILITIES In October 2010, the CPUC issued a decision approving a settlement agreement between SDG&E and the Division of Ratepayer Advocates (DRA), authorizing SDG&E to recover $43 million of capital costs incurred to replace and repair company facilities under CPUC jurisdiction damaged by the October 2007 wildfires. This decision was in response to an application that SDG&E filed with the CPUC in March 2009 seeking to recover $49.8 million of incremental costs ($43 million of capital costs and $6.8 million of operation and maintenance costs). SDG&E also incurred $30.1 million of incremental costs for the replacement and repair of company facilities under FERC jurisdiction, which are currently being recovered in SDG&E's electric transmission rates.We discuss recovery of 2007 wildfire litigation costs in Note 16.INSURANCE COST RECOVERYSDG&E filed a request with the CPUC in August 2009 seeking authorization to recover higher liability insurance premiums, which SDG&E began incurring commencing July 1, 2009, and any losses realized due to higher deductibles associated with the new policies. SDG&E requested a $29 million revenue requirement for the incremental increase in its general liability and wildfire liability insurance premium costs for the 2009/2010 policy period above what was authorized in rates in the 2008 GRC and proposed a mechanism for recovery of future liability insurance costs incurred in the 2010/2011 policy period and the first six months of the 2011/2012 policy period. SDG&E made the filing under the CPUC's rules allowing utilities to seek recovery of significant cost increases incurred between GRC filings resulting from unforeseen circumstances. The CPUC's rules allow a utility to seek recovery of incurred costs that meet certain criteria, subject to a $5 million deductible per event. SDG&E asked that the increase in liability insurance costs for the 2009/2010, 2010/2011 and the first six months of the 2011/2012 policy periods be deemed a single event subject to one $5 million deductible. In December 2010, the CPUC approved SDG&E's request for the $29 million revenue requirement, which was implemented in rates effective January 1, 2011, and authorized SDG&E to request recovery of the incremental insurance premiums for future policy periods, with the exception that the $5 million deductible be applied to each policy renewal period. SDG&E expects to file its request addressing the 2010/2011 policy period in early 2011. Including the effect of this approval, in the years ended December 31, 2010 and 2009, SDG&E's after-tax earnings were adversely impacted by $13 million and $9 million, respectively, due to the incremental insurance premiums associated with its wildfire coverage. EXCESS WILDFIRE claims COST RECOVERYSDG&E and SoCalGas filed an application, along with other related filings, with the CPUC in August 2009 proposing a new mechanism for the future recovery of all wildfire-related expenses for claims, litigation expenses and insurance premiums that are in excess of amounts authorized by the CPUC for recovery in rates. This application was made jointly with Edison and PG&E. In July 2010, the CPUC approved SDG&E's and SoCalGas' requests for separate regulatory accounts to record the subject expenses while the joint utility application is pending before the CPUC. Several parties protested the original application and, in response, the four utilities jointly submitted an amended application in August 2010. On February 18, 2011, a ruling was issued by the Assigned Commissioner and Administrative Law Judge requiring applicants to show cause why the application should not be dismissed. We believe the parties can show that the application should not be dismissed and should continue to progress. In connection with these filings, SDG&E is seeking the recovery of costs incurred by SDG&E for the 2007 wildfire losses that are in excess of amounts recovered from its insurance coverage and other potentially responsible third parties, as well as similar costs for future wildfires, if and when incurred. We provide additional information about 2007 wildfire litigation costs and their recovery in Note 16.AIR QUALITY AND Greenhouse Gas RegulationFederal and state legislative and regulatory bodies have recently adopted, and have proposed to adopt, several new air quality and greenhouse gas (GHG) standards that will impact the Sempra Utilities and Sempra Generation.Among others, the California Legislature enacted Assembly Bill 32 (AB 32) and California Senate Bill 1368 in 2006. These laws mandate, among other things, reductions in greenhouse gas emissions and the payment of GHG administration fees annually. The CARB has adopted a number of regulations pursuant to AB 32, including CARB's GHG administration fees regulation and its greenhouse gas emissions trading regulation. The Association of Irritated Residents is challenging the scoping plan adopted by CARB upon which the AB 32 regulations are based (Association of Irritated Residents (AIR), et al. v. California Air Resources Board (CARB)). In late January 2011, the San Francisco County Superior Court issued a tentative decision that prohibits CARB from implementing its scoping plan until it is in complete compliance with its obligations under its certified regulatory program and CEQA. If the Court finalizes the tentative ruling as currently proposed, it may impact the substance and/or effective dates of the final AB 32 regulations.The U.S. Environmental Protection Agency (EPA) has announced that it will complete a review of several national ambient air quality standards (NAAQS) by the end of 2011, including ozone (nitrogen oxide and volatile organic chemicals), particulate matter, nitrogen dioxide and sulfur dioxide. The EPA has also entered into a settlement agreement requiring it to propose GHG new source performance standards (NSPS) for new, modified and existing sources by May 2012. These new NAAQS and NSPS could result in more stringent emissions limits on fossil combustion, including fossil-fired electric generating plants. These legislative and regulatory mandates could affect costs and growth at the Sempra Utilities and at Sempra Generation's power plants. Any cost impact at the Sempra Utilities is expected to be recoverable through rates. As discussed in Note 16 under "Environmental Issues," compliance with this and similar legislation could adversely affect Sempra Generation. However, such legislation could also have a positive impact on Sempra Generation because of an increasing preference for natural gas and renewables for electric generation, as opposed to other sources.NOTE 15. OTHER REGULATORY MATTERSGeneral Rate Case (GRC)The CPUC uses a general rate case proceeding to prospectively set rates sufficient to allow the SemprafalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element can be used to encapsulate the entire disclosure for public utilities (including data and tables).Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 71 falsefalseSempra Utilities' Regulatory Matters12SEMPRA UTILITIES' REGULATORY MATTERSUnKnownUnKnownUnKnownUnKnownfalsetrue