FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2019



RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Fair value at December 31, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	503		$	6	$	—	$	509
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	46			11		—		57
Municipal bonds	—			282		—		282
Other securities	—			226		—		226
Total debt securities	46			519		—		565
Total nuclear decommissioning trusts⁽¹⁾	549			525		—		1,074
Interest rate and foreign exchange instruments	—			24		—		24
Commodity contracts not subject to rate recovery	—			11		—		11
Effect of netting and allocation of collateral⁽²⁾	43			—		—		43
Commodity contracts subject to rate recovery	5			8		95		108
Effect of netting and allocation of collateral⁽²⁾	11			8		6		25
Total	$	608		$	576	$	101	$	1,285

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	157	$	—	$	157
Commodity contracts not subject to rate recovery	—			17		—		17
Commodity contracts subject to rate recovery	14			4		67		85
Effect of netting and allocation of collateral⁽²⁾	(14		)	—		—		(14		)
Total	$	—		$	178	$	67	$	245

	Fair value at December 31, 2018
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	407		$	4	$	—	$	411
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	43			10		—		53
Municipal bonds	—			269		—		269
Other securities	—			234		—		234
Total debt securities	43			513		—		556
Total nuclear decommissioning trusts⁽¹⁾	450			517		—		967
Interest rate and foreign exchange instruments	—			2		—		2
Commodity contracts not subject to rate recovery	—			24		—		24
Effect of netting and allocation of collateral⁽²⁾	19			—		—		19
Commodity contracts subject to rate recovery	2			9		278		289
Effect of netting and allocation of collateral⁽²⁾	28			—		5		33
Total	$	499		$	552	$	283	$	1,334

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	150	$	—	$	150
Commodity contracts not subject to rate recovery	—			34		—		34
Commodity contracts subject to rate recovery	2			5		99		106
Effect of netting and allocation of collateral⁽²⁾	(2		)	—		—		(2		)
Total	$	—		$	189	$	99	$	288


⁽¹⁾	Excludes cash balances and cash equivalents.


⁽²⁾	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.



RECURRING FAIR VALUE MEASURES – SDG&E
(Dollars in millions)
	Fair value at December 31, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	503		$	6	$	—	$	509
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	46			11		—		57
Municipal bonds	—			282		—		282
Other securities	—			226		—		226
Total debt securities	46			519		—		565
Total nuclear decommissioning trusts⁽¹⁾	549			525		—		1,074
Commodity contracts subject to rate recovery	1			3		95		99
Effect of netting and allocation of collateral⁽²⁾	10			—		6		16
Total	$	560		$	528	$	101	$	1,189

Liabilities:
Commodity contracts subject to rate recovery	14			—		67		81
Effect of netting and allocation of collateral⁽²⁾	(14		)	—		—		(14		)
Total	$	—		$	—	$	67	$	67

	Fair value at December 31, 2018
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	407		$	4	$	—	$	411
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	43			10		—		53
Municipal bonds	—			269		—		269
Other securities	—			234		—		234
Total debt securities	43			513		—		556
Total nuclear decommissioning trusts⁽¹⁾	450			517		—		967
Commodity contracts subject to rate recovery	1			6		278		285
Effect of netting and allocation of collateral⁽²⁾	23			—		5		28
Total	$	474		$	523	$	283	$	1,280

Liabilities:
Interest rate instruments	$	—		$	1	$	—	$	1
Commodity contracts subject to rate recovery	2			—		99		101
Effect of netting and allocation of collateral⁽²⁾	(2		)	—		—		(2		)
Total	$	—		$	1	$	99	$	100


⁽¹⁾	Excludes cash balances and cash equivalents.


⁽²⁾	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.



RECURRING FAIR VALUE MEASURES – SOCALGAS
(Dollars in millions)
	Fair value at December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	4	$	5	$	—	$	9
Effect of netting and allocation of collateral⁽¹⁾	1		8		—		9
Total	$	5	$	13	$	—	$	18

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	4	$	—	$	4
Total	$	—	$	4	$	—	$	4

	Fair value at December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	1	$	3	$	—	$	4
Effect of netting and allocation of collateral⁽¹⁾	5		—		—		5
Total	$	6	$	3	$	—	$	9

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	5	$	—	$	5
Total	$	—	$	5	$	—	$	5

⁽¹⁾

Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.

Recurring Fair Value Measures Level 3 Rollforward Table

The table below sets forth reconciliations of changes in the fair value of CRRs and long-term, fixed-price electricity positions classified as Level 3 in the fair value hierarchy for Sempra Energy Consolidated and SDG&E.



LEVEL 3 RECONCILIATIONS⁽¹⁾
(Dollars in millions)
	Years ended December 31,
	2019			2018			2017
Balance at January 1	$	179		$	(28	)	$	(74	)
Realized and unrealized gains (losses)	(184		)	209			34
Allocated transmission instruments	6			10			6
Settlements	27			(12		)	6
Balance at December 31	$	28		$	179		$	(28	)
Change in unrealized gains (losses) relating to instruments still held at December 31	$	(139	)	$	183		$	30

⁽¹⁾

Excludes the effect of the contractual ability to settle contracts under master netting agreements.

Schedule of Auction Price Inputs

The fair value of the net electricity positions classified as Level 3 is derived from a discounted cash flow model using market electricity forward price inputs. The range and weighted-average price of these inputs were as follows:



LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS

Settlement year		Price per MWh					Weighted-average price per MWh
2019	$	21.00	to	$	61.15	$	37.92
2018		22.20	to		76.85		42.69

For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:



CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS

Settlement year		Price per MWh						Median price per MWh
2020	$	(3.77	)	to	$	6.03	$	(1.58	)
2019		(8.57	)	to		35.21		(2.94	)
2018		(7.25	)	to		11.99		0.09

Fair Value of Financial Instruments Table

The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Consolidated Balance Sheets.



FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
	December 31, 2019
	Carrying		Fair value
	amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates	$	742	$	—	$	759	$	—	$	759
Long-term amounts due to unconsolidated affiliates	195		—		184		—		184
Total long-term debt⁽¹⁾	21,247		—		22,638		26		22,664
SDG&E:
Total long-term debt⁽²⁾	$	5,140	$	—	$	5,662	$	—	$	5,662
SoCalGas:
Total long-term debt⁽³⁾	$	3,809	$	—	$	4,189	$	—	$	4,189

	December 31, 2018
	Carrying		Fair value
	amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates	$	644	$	—	$	648	$	4	$	652
Long-term amounts due to unconsolidated affiliates	37		—		35		—		35
Total long-term debt⁽⁴⁾⁽⁵⁾	21,340		—		20,616		247		20,863
SDG&E:
Total long-term debt⁽⁴⁾⁽⁶⁾	$	4,996	$	—	$	4,897	$	220	$	5,117
SoCalGas:
Total long-term debt⁽⁷⁾	$	3,459	$	—	$	3,505	$	—	$	3,505


⁽¹⁾	Before reductions of unamortized discount and debt issuance costs of $225 million and excluding finance lease obligations of $1,289 million.


⁽²⁾	Before reductions of unamortized discount and debt issuance costs of $48 million and excluding finance lease obligations of $1,270 million.


⁽³⁾	Before reductions of unamortized discount and debt issuance costs of $34 million and excluding finance lease obligations of $19 million.


⁽⁴⁾	Level 3 instruments include $220 million related to Otay Mesa VIE.


⁽⁵⁾	Before reductions of unamortized discount and debt issuance costs of $206 million and excluding build-to-suit arrangement and capital lease obligations of $1,413 million.


⁽⁶⁾	Before reductions of unamortized discount and debt issuance costs of $49 million and excluding capital lease obligations of $1,272 million.


⁽⁷⁾	Before reductions of unamortized discount and debt issuance costs of $32 million and excluding capital lease obligations of $3 million.

Fair Value Measurements, Nonrecurring Table

The table below summarizes significant inputs impacting our non-recurring fair value measures. Additional discussions about the related transactions are provided in Note 5, and as applicable, in Note 6.

NON-RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED

Measurement date

Estimated

fair

value (in millions)

Valuation technique

Fair

value

hierarchy

% of

fair value

measurement

Inputs used to
develop
measurement

Range of
inputs (weighted average)

Non-utility natural gas storage assets

December 31, 2018

337

Market approach

Level 2

100%

Assets’ sales prices

100%

Non-utility natural gas storage assets

June 25, 2018

190

Discounted cash flows

Level 3

100%

Storage rates
per Dth/month

$0.06 - $0.22 ($0.10)

⁽¹⁾

Discount rate

10%

⁽²⁾

Certain of our U.S. wind equity method investments

June 25, 2018

145

Discounted cash flows

Level 3

100%

Contracted and observable merchant prices per MWh

$29 - $92

⁽¹⁾

Discount rate

8% - 10% (8.7%)

⁽²⁾

TdM

June 30, 2017

Market approach

Level 2

100%

Purchase price offer

100%


⁽¹⁾	Generally, significant increases (decreases) in this input in isolation would result in a significantly higher (lower) fair value measurement.

⁽²⁾

An increase in the discount rate would result in a decrease in fair value.