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margin-bottom:6pt'&gt;&lt;font style="font-family:Arial;font-size:11pt;margin-left:0px;"&gt;NOTE 1. &lt;/font&gt;&lt;font style="font-family:Arial;font-size:11pt;"&gt;GENERAL&lt;/font&gt;&lt;font style="font-family:Arial;font-size:11pt;"&gt;  &lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:21pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0px;"&gt;PRINCIPLES OF CONSOLIDATION&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:12pt; margin-bottom:3pt'&gt;&lt;font style="font-family:Times New Roman;font-size:11pt;font-weight:bold;font-style:italic;margin-left:0px;"&gt;Sempra Energy&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:3pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;Sempra Energy's &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Condensed &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Consolidated Financial Statements include the accounts of Sempra Energy, a California-based Fortune 500 holding company, and its consolidated subsidiaries and a variable interest entity (VIE). Sempra Energy's principal subsidiaries are&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:3pt'&gt;&lt;/p&gt;&lt;ul&gt;&lt;li style="margin-left:9.35px;list-style:square;"&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;San Diego Gas &amp;amp; Electric Company (SDG&amp;amp;E) and Southern California Gas Company (SoCalGas), which we collectively refer to as the Sempra Utilities; and&lt;/font&gt;&lt;/li&gt;&lt;/ul&gt;&lt;p style='margin-top:0pt; margin-bottom:9pt'&gt;&lt;/p&gt;&lt;ul&gt;&lt;li style="margin-left:9.35px;list-style:square;"&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Sempra Global, which is the holding company for Sempra Generation, Sempra Pipe&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;lines &amp;amp; Storage&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; and Sempra LNG&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.  &lt;/font&gt;&lt;/li&gt;&lt;/ul&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;Sempra Energy uses the equity method to account for investments in affiliated companies over which we have the ability to exercise significant influence, but not control. We discuss our investments in unconsolidated&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; subsidiaries in Note 4 below and Note 4 of the Notes to Consolid&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;ated Financial Statements in our&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Annual Report&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; on Form 10-K for the year ended December 31, 2010&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:12pt; margin-bottom:3pt'&gt;&lt;font style="font-family:Times New Roman;font-size:11pt;font-weight:bold;font-style:italic;margin-left:0px;"&gt;SDG&amp;amp;E&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;SDG&amp;amp;E's &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Condensed Consolidated&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Financial Statements include its accounts and the accounts of a VIE of which SDG&amp;amp;E is the primary beneficiary, as we discuss &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;in Note 5&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; under "Variable Interest Entities." SDG&amp;amp;E's common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra Energy. &lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:12pt; margin-bottom:3pt'&gt;&lt;font style="font-family:Times New Roman;font-size:11pt;font-weight:bold;font-style:italic;margin-left:0px;"&gt;Pacific Enterprises and SoCalGas&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;Pacific Enterprise's &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Condensed Consolidated&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Financial Statements include the accounts of Pacific Enterprises (PE) and its subsidiary, SoCalGas.  Sempra Energy owns all of PE's common stock and PE owns all of SoCalGas' common stock. SoCalGas' &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Condensed &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Consolidated Financial Statements include its subsidiaries, which comprise less than one percent of its consolidated financial position and results of operations. &lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;PE's operations consist solely of those of SoCalGas and additional items (e.g., cash, intercompany accounts and equity) attributable to serving as a holding company for SoCalGas.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:3pt'&gt;&amp;#160;&lt;/p&gt;&lt;p style='margin-top: 0pt; margin-bottom: 0pt;'&gt;&lt;/p&gt;&lt;p style='margin-top:21pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0px;"&gt;BASIS OF PRESENTATION&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;This is a combined report of Sempra Energy, &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;SDG&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;&amp;amp;&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;E&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;, &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;PE&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; and SoCalGas. We provide separate information for &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;SDG&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;&amp;amp;&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;E&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;, &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;PE&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; and SoCalGas as required&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;. I&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;n the Notes to Condensed Consolidated Financial Statements&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; (except in Note 11)&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;, w&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;hen only information for SoCalGas is provided, it is the same for PE. References in this report to &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;"&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;we&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;,"&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;"&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;our&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;" and "Sempra Energy Consolidated"&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; are to Sempra Energy and its consolidated entities, unless otherwise indicated by the context. We have eliminated intercompany accounts and transactions within &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;the &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;consolidated financial statements&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; of each reporting entity&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;We have prepared the&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) and in accordance with the interim-period-reporting requirements of Form 10-Q. Results of operations for interim periods are not necessarily indicative of results for the en&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;tire year. &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;We evaluated events and transactions that occurred after &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;March 31, 2011&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;through the date &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;the&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;financial &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;statements&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; were issu&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;e&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;d&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;,&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; and &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;i&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;n the opinion of &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;management, the accompanying statements reflect all adjustments necessary for a fair presentation.&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;  These adjustments are only of a normal, recurring nature&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;All December 31, 2010 balance sheet information in the Condensed Consolidated Financial Statements has been derived from &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;our&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; audited 2010 consolidated financial statements. Certain information and note disclosures normally included in &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;annual &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the interim-period-reporting &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;provisions&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; of&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; GAAP and&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; the Securities and Exchange Commission.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;You should read the information in this Quarterly Report in conjunction with our Annual Report on Form 10-K for the year ended Decembe&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;r&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; 31, 20&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;10&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; (the Annual Report&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;),&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;which &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;is a&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;combined report for&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Sempra Energy,&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; SDG&amp;amp;E, PE and SoCalGas.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. We follow the same accounting policies for interim reporting purposes&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;.&lt;/font&gt;&lt;/p&gt;&lt;p style='margin-top:0pt; margin-bottom:6pt'&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"&gt;The Sempra Utilities &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;and Sempra Pipelines &amp;amp; Storage's&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; Mobile Gas &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;Service Corporation&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; and Ecoga&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;s Mexico, S de RL de CV&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; prepare their financial statements &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;in accordance with GAAP provisions&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; governing regu&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;lated operations, as we discus&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;s&lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt; in Note 1 &lt;/font&gt;&lt;font style="font-family:Times New Roman;font-size:10pt;"&gt;of the Notes to Consolidated Financial Statements in the Annual Report.&lt;/font&gt;&lt;/p&gt;</NonNumbericText><NonNumericTextHeader>NOTE 1. 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