REGULATORY MATTERS (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Regulatory Assets [Table Text Block]

We show the details of regulatory assets and liabilities in the following table, and discuss each of them separately below.



REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	December 31,
	2017			2016
SDG&E:
Fixed-price contracts and other derivatives	$	96		$	141
Costs related to SONGS plant closure⁽¹⁾	—			183
Costs related to wildfire litigation	—			353
Deferred income taxes (refundable) recoverable in rates	(281		)	1,014
Pension and other postretirement benefit plan obligations	153			210
Removal obligations	(1,846		)	(1,725		)
Unamortized loss on reacquired debt	9			12
Environmental costs	29			48
Legacy meters⁽¹⁾	—			16
Sunrise Powerlink fire mitigation	119			118
Regulatory balancing accounts⁽²⁾
Commodity – electric	82			35
Gas transportation	22			61
Safety and reliability	48			20
Public purpose programs	(70		)	(106		)
Other balancing accounts	233			249
Other regulatory liabilities	(70		)	(2		)
Total SDG&E	(1,476		)	627
SoCalGas:
Pension and other postretirement benefit plan obligations	513			563
Employee benefit costs	45			45
Removal obligations	(924		)	(972		)
Deferred income taxes (refundable) recoverable in rates	(437		)	417
Unamortized loss on reacquired debt	8			10
Environmental costs	22			22
Workers’ compensation	12			10
Regulatory balancing accounts⁽²⁾
Commodity – gas, including transportation	151			207
Safety and reliability	266			230
Public purpose programs	(274		)	(270		)
Other balancing accounts	(114		)	(204		)
Other regulatory (liabilities) assets	(64		)	8
Total SoCalGas	(796		)	66
Sempra Mexico:
Deferred income taxes recoverable in rates	83			71
Total Sempra Energy Consolidated	$	(2,189	)	$	764


⁽¹⁾	Regulatory assets earning a rate of return.


⁽²⁾	At December 31, 2017, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $63 million. At December 31, 2017 and 2016, the noncurrent portion of regulatory balancing accounts – net undercollected for SoCalGas was $118 million and $85 million, respectively.

Schedule of Regulatory Liabilities [Table Text Block]

We show the details of regulatory assets and liabilities in the following table, and discuss each of them separately below.



REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	December 31,
	2017			2016
SDG&E:
Fixed-price contracts and other derivatives	$	96		$	141
Costs related to SONGS plant closure⁽¹⁾	—			183
Costs related to wildfire litigation	—			353
Deferred income taxes (refundable) recoverable in rates	(281		)	1,014
Pension and other postretirement benefit plan obligations	153			210
Removal obligations	(1,846		)	(1,725		)
Unamortized loss on reacquired debt	9			12
Environmental costs	29			48
Legacy meters⁽¹⁾	—			16
Sunrise Powerlink fire mitigation	119			118
Regulatory balancing accounts⁽²⁾
Commodity – electric	82			35
Gas transportation	22			61
Safety and reliability	48			20
Public purpose programs	(70		)	(106		)
Other balancing accounts	233			249
Other regulatory liabilities	(70		)	(2		)
Total SDG&E	(1,476		)	627
SoCalGas:
Pension and other postretirement benefit plan obligations	513			563
Employee benefit costs	45			45
Removal obligations	(924		)	(972		)
Deferred income taxes (refundable) recoverable in rates	(437		)	417
Unamortized loss on reacquired debt	8			10
Environmental costs	22			22
Workers’ compensation	12			10
Regulatory balancing accounts⁽²⁾
Commodity – gas, including transportation	151			207
Safety and reliability	266			230
Public purpose programs	(274		)	(270		)
Other balancing accounts	(114		)	(204		)
Other regulatory (liabilities) assets	(64		)	8
Total SoCalGas	(796		)	66
Sempra Mexico:
Deferred income taxes recoverable in rates	83			71
Total Sempra Energy Consolidated	$	(2,189	)	$	764


⁽¹⁾	Regulatory assets earning a rate of return.


⁽²⁾	At December 31, 2017, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $63 million. At December 31, 2017 and 2016, the noncurrent portion of regulatory balancing accounts – net undercollected for SoCalGas was $118 million and $85 million, respectively.

Schedule Of Approved Increase Decrease To Annual Revenue Requirement

Following is a summary of the 2016 earnings impacts from the 2016 GRC FD:



EARNINGS IMPACTS IN 2016 FROM THE 2016 GRC FD
(Dollars in millions)
	SoCalGas						SDG&E
	Pretax earnings (charge)			After-tax earnings (charge)			Pretax earnings (charge)			After-tax earnings (charge)
Adjustments to revenue related to tax
repairs deductions:
2015 memorandum account balance	$	(72	)	$	(43	)	$	(37	)	$	(22	)
True-up of 2012-2014 estimates to actuals	(11		)	(6		)	(15		)	(9		)
Total	$	(83	)	$	(49	)	$	(52	)	$	(31	)

Schedule Of CPUC Cost of Capital Authorized

In October 2017, the CPUC approved the embedded cost of debt presented in the filed advice letters, resulting in a revised return on rate base for SDG&E from 7.79 percent to 7.55 percent and for SoCalGas from 8.02 percent to 7.34 percent, effective January 1, 2018, as depicted in the table below:



AUTHORIZED COST OF CAPITAL AND RATE STRUCTURE – CPUC

SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base			Authorized weighting		Return on rate base		Weighted return on rate base
45.25	%	4.59	%	2.08	%	Long-Term Debt	45.60	%	4.33	%	1.97	%
2.75		6.22		0.17		Preferred Stock	2.40		6.00		0.14
52.00		10.20		5.30		Common Equity	52.00		10.05		5.23
100.00	%			7.55	%		100.00	%			7.34	%

As a result of the updates included in the filed advice letters, the impact of the changes to the embedded cost of debt and return on rate base is summarized below:



IMPACT OF THE EMBEDDED COST OF DEBT

	SDG&E						SoCalGas
	Cost of debt			Return on rate base			Cost of debt			Return on rate base
Current	5.00		%	7.79		%	5.77		%	8.02		%
Authorized, effective January 1, 2018	4.59		%	7.55		%	4.33		%	7.34		%
Differences	(41	)	bps	(24	)	bps	(144	)	bps	(68	)	bps

Schedule Of FERC Cost Of Capital Table

SDG&E’s current estimated FERC return on rate base under the TO4 formula rate request filing is 7.51 percent based on its capital structure as follows:



SDG&E COST OF CAPITAL AND RATE STRUCTURE – FERC

	Weighting		Return on rate base		Weighted return on rate base
Long-Term Debt	43.44	%	4.21	%	1.83	%
Common Equity	56.56		10.05		5.68
	100.00	%			7.51	%