Summary
Sempra Energy's Form 8-K filing dated September 2, 2003, primarily details the approval of significant performance awards for its California utility subsidiaries by the California Public Utilities Commission (CPUC). The company received $66 million in performance awards, with Southern California Gas Company receiving $48 million for natural gas purchase incentive awards and San Diego Gas & Electric Company (SDG&E) receiving $18 million for distribution-operation performance awards. These awards were anticipated and included in prior earnings guidance, and are expected to be recognized in the third quarter of 2003. Furthermore, the filing reports the CPUC's denial of a rehearing request regarding a settlement with SDG&E concerning profits from intermediate-term power purchase contracts. This settlement, which allocates profits between customers and shareholders, will become final and nonappealable in late September 2003 unless appealed to the California Court of Appeals. The denial of rehearing is expected to result in Sempra Energy recognizing an additional $65 million in after-tax income in the third quarter of 2003. The company plans to update its earnings guidance to reflect this nonrecurring income upon releasing its third-quarter financial results.
Key Highlights
- 1CPUC approved $66 million in performance awards for Sempra Energy's California utilities.
- 2Southern California Gas Company received $48 million in natural gas purchase incentive awards.
- 3San Diego Gas & Electric Company (SDG&E) received $18 million in distribution-operation performance awards.
- 4These performance awards were previously factored into Sempra Energy's earnings guidance.
- 5CPUC denied a rehearing request concerning a settlement on SDG&E's power purchase contract profits.
- 6The denial of rehearing is expected to result in an additional $65 million after-tax income for Sempra Energy.
- 7Sempra Energy will update its earnings guidance to reflect the nonrecurring income.