DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Sep. 30, 2015

Derivative Financial Instruments (Tables) [Abstract]

NET ENERGY DERIVATIVE VOLUMES

Segment and Commodity		September 30, 2015	December 31, 2014
California Utilities:
SDG&E:
Natural gas		59 million MMBtu	55 million MMBtu	(1)
Electricity		1 million MWh	―	(2)
Congestion revenue rights		24 million MWh	27 million MWh
SoCalGas – natural gas		1 million MMBtu	1 million MMBtu

Energy-Related Businesses:
Sempra Natural Gas – natural gas		39 million MMBtu	29 million MMBtu
(1)	Million British thermal units
(2)	Megawatt hours

Notional Amounts of Interest Rate Derivatives Table

INTEREST RATE DERIVATIVES
(Dollars in millions)
		September 30, 2015			December 31, 2014
		Notional debt		Maturities	Notional debt		Maturities
Sempra Energy Consolidated:
Cash flow hedges(1)		$	389	2015-2028	$	399	2015-2028
Fair value hedges			300	2016		300	2016
SDG&E:
Cash flow hedge(1)			317	2015-2019		325	2015-2019
(1)	Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE.

Derivative Instruments on the Condensed Consolidated Balance Sheets Table

DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
		September 30, 2015
									Deferred
									credits
			Current				Current		and other
			assets:				liabilities:		liabilities:
			Fixed-price		Investments		Fixed-price		Fixed-price
			contracts		and other		contracts		contracts
			and other		assets:		and other		and other
			derivatives(1)		Sundry		derivatives(2)		derivatives
Sempra Energy Consolidated:
Derivatives designated as hedging instruments:
Interest rate and foreign exchange instruments(3)		$	7	$	―	$	(16)	$	(159)
Commodity contracts not subject to rate recovery			6		―		―		―
Derivatives not designated as hedging instruments:
Interest rate and foreign exchange instruments			―		―		(3)		―
Commodity contracts not subject to rate recovery			166		31		(147)		(18)
Associated offsetting commodity contracts			(137)		(18)		137		18
Associated offsetting cash collateral			―		―		3		―
Commodity contracts subject to rate recovery			7		87		(59)		(65)
Associated offsetting commodity contracts			(1)		(1)		1		1
Associated offsetting cash collateral			―		―		25		28
Net amounts presented on the balance sheet			48		99		(59)		(195)
Additional cash collateral for commodity contracts
not subject to rate recovery			3		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			15		―		―		―
Total(4)		$	66	$	99	$	(59)	$	(195)
SDG&E:
Derivatives designated as hedging instruments:
Interest rate instruments(3)		$	―	$	―	$	(15)	$	(29)
Derivatives not designated as hedging instruments:
Commodity contracts not subject to rate recovery			―		―		(1)		―
Associated offsetting cash collateral			―		―		1		―
Commodity contracts subject to rate recovery			6		87		(59)		(65)
Associated offsetting commodity contracts			(1)		(1)		1		1
Associated offsetting cash collateral			―		―		25		28
Net amounts presented on the balance sheet			5		86		(48)		(65)
Additional cash collateral for commodity contracts
not subject to rate recovery			1		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			14		―		―		―
Total(4)		$	20	$	86	$	(48)	$	(65)
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts not subject to rate recovery		$	―	$	―	$	(2)	$	―
Associated offsetting cash collateral			―		―		2		―
Commodity contracts subject to rate recovery			1		―		―		―
Net amounts presented on the balance sheet			1		―		―		―
Additional cash collateral for commodity contracts
not subject to rate recovery			1		―		―		―
Additional cash collateral for commodity contracts
subject to rate recovery			1		―		―		―
Total		$	3	$	―	$	―	$	―
(1)	Included in Current Assets: Other for SoCalGas.
(2)	Included in Current Liabilities: Other for SoCalGas.
(3)	Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4)	Normal purchase contracts previously measured at fair value are excluded.

DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
		December 31, 2014
									Deferred
									credits
			Current				Current		and other
			assets:				liabilities:		liabilities:
			Fixed-price		Investments		Fixed-price		Fixed-price
			contracts		and other		contracts		contracts
			and other		assets:		and other		and other
			derivatives(1)		Sundry		derivatives(2)		derivatives
Sempra Energy Consolidated:
Derivatives designated as hedging instruments:
Interest rate and foreign exchange instruments(3)		$	10	$	3	$	(17)	$	(109)
Commodity contracts not subject to rate recovery			25		―		―		―
Derivatives not designated as hedging instruments:
Interest rate instruments			8		27		(7)		(22)
Commodity contracts not subject to rate recovery			143		32		(135)		(29)
Associated offsetting commodity contracts			(129)		(27)		129		27
Associated offsetting cash collateral			(11)		―		―		―
Commodity contracts subject to rate recovery			36		76		(36)		(20)
Associated offsetting commodity contracts			(3)		(1)		3		1
Associated offsetting cash collateral			―		―		23		13
Net amounts presented on the balance sheet			79		110		(40)		(139)
Additional cash collateral for commodity contracts
subject to rate recovery			14		―		―		―
Total(4)		$	93	$	110	$	(40)	$	(139)
SDG&E:
Derivatives designated as hedging instruments:
Interest rate instruments(3)		$	―	$	―	$	(16)	$	(31)
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery			32		76		(32)		(20)
Associated offsetting commodity contracts			―		(1)		―		1
Associated offsetting cash collateral			―		―		23		13
Net amounts presented on the balance sheet			32		75		(25)		(37)
Additional cash collateral for commodity contracts
subject to rate recovery			12		―		―		―
Total(4)		$	44	$	75	$	(25)	$	(37)
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery		$	4	$	―	$	(4)	$	―
Associated offsetting commodity contracts			(3)		―		3		―
Net amounts presented on the balance sheet			1		―		(1)		―
Additional cash collateral for commodity contracts
subject to rate recovery			2		―		―		―
Total		$	3	$	―	$	(1)	$	―
(1)	Included in Current Assets: Other for SoCalGas.
(2)	Included in Current Liabilities: Other for SoCalGas.
(3)	Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4)	Normal purchase contracts previously measured at fair value are excluded.

Fair Value Hedge Impact on the Condensed Consolidated Statements of Operations Table

FAIR VALUE HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
			Pretax gain (loss) on derivatives recognized in earnings
			Three months ended September 30,				Nine months ended September 30,
		Location	2015		2014		2015		2014
Sempra Energy Consolidated:
Interest rate instruments		Interest Expense	$	1	$	1	$	5	$	6
Interest rate instruments		Other Income, Net		―		(1)		(2)		―
Total(1)			$	1	$	―	$	3	$	6
(1)	There was no hedge ineffectiveness on these swaps in either the three months or nine months ended September 30, 2015 and negligible gains and $9 million of gains from hedge ineffectiveness in the three months and nine months ended September 30, 2014, respectively. All other changes in the fair value of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and are recorded in Other Income, Net.

Cash Flow Hedge Impact on the Condensed Consolidated Statements of Operations Table

CASH FLOW HEDGE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
		Pretax gain (loss) recognized					Pretax gain (loss) reclassified from
		in OCI (effective portion)					AOCI into earnings (effective portion)
		Three months ended September 30,					Three months ended September 30,
		2015		2014		Location	2015		2014
Sempra Energy Consolidated:
Interest rate and foreign
exchange instruments(1)(2)		$	(10)	$	(5)	Interest Expense	$	(5)	$	(8)
						Gain on Sale of Equity Interests
Interest rate instruments			―		5	and Assets		―		5
						Equity Earnings,
Interest rate instruments			(134)		(4)	Before Income Tax		(3)		(2)
Commodity contracts not subject						Revenues: Energy-Related
to rate recovery			6		1	Businesses		3		2
Total(2)		$	(138)	$	(3)		$	(5)	$	(3)
SDG&E:
Interest rate instruments(1)(2)		$	(4)	$	1	Interest Expense	$	(3)	$	(3)

		Nine months ended September 30,					Nine months ended September 30,
		2015		2014		Location	2015		2014
Sempra Energy Consolidated:
Interest rate and foreign
exchange instruments(1)(2)		$	(22)	$	(15)	Interest Expense	$	(14)	$	(17)
						Gain on Sale of Equity Interests
Interest rate instruments			―		3	and Assets		―		3
						Equity Earnings,
Interest rate instruments			(123)		(34)	Before Income Tax		(9)		(7)
Commodity contracts not subject						Revenues: Energy-Related
to rate recovery			6		(5)	Businesses		10		(8)
Total(2)		$	(139)	$	(51)		$	(13)	$	(29)
SDG&E:
Interest rate instruments(1)(2)		$	(9)	$	(5)	Interest Expense	$	(9)	$	(8)
(1)	Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
(2)	There were negligible losses from ineffectiveness related to these hedges in 2015 and 2014.

Undesignated Derivative Impact on the Condensed Consolidated Statements of Operations Table

UNDESIGNATED DERIVATIVE IMPACT ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions)
		Pretax gain (loss) on derivatives recognized in earnings
		Three months endedSeptember 30,				Nine months ended September 30,
	Location	2015		2014		2015		2014
Sempra Energy Consolidated:
Interest rate and foreign exchange
instruments	Other Income, Net	$	(4)	$	(6)	$	(7)	$	(6)
Foreign exchange instruments	Equity Earnings,
	Net of Income Tax		(3)		(2)		(4)		(4)
Commodity contracts not subject	Revenues: Energy-Related
to rate recovery	Businesses		21		3		33		2
Commodity contracts not subject	Cost of Natural Gas, Electric Fuel
to rate recovery	and Purchased Power		―		1		―		3
Commodity contracts not subject
to rate recovery	Operation and Maintenance		(2)		―		(1)		―
Commodity contracts subject	Cost of Electric Fuel
to rate recovery	and Purchased Power		(27)		(1)		(100)		19
Commodity contracts subject
to rate recovery	Cost of Natural Gas		―		1		1		2
Total		$	(15)	$	(4)	$	(78)	$	16
SDG&E:
Commodity contracts not subject
to rate recovery	Operation and Maintenance	$	(1)	$	―	$	(1)	$	―
Commodity contracts subject	Cost of Electric Fuel
to rate recovery	and Purchased Power		(27)		(1)		(100)		19
Total		$	(28)	$	(1)	$	(101)	$	19
SoCalGas:
Commodity contracts not subject
to rate recovery	Operation and Maintenance	$	(1)	$	―	$	―	$	―
Commodity contracts subject
to rate recovery	Cost of Natural Gas		―		1		1		2
Total		$	(1)	$	1	$	1	$	2