Summary
This 8-K filing from Sempra Energy (SRE) addresses a legal development concerning a settlement with its subsidiary, San Diego Gas & Electric Company (SDG&E), regarding profits from intermediate-term power purchase contracts entered into before California's electric utility restructuring. While the California Public Utilities Commission (CPUC) had previously approved a settlement allocating these profits between customers and shareholders, an advocacy group for small consumers petitioned the California Court of Appeals for a review of this decision. The Court of Appeals has now granted this petition for review. Sempra Energy previously recognized $65 million in after-tax income in the third quarter of 2003 as a result of the CPUC's denial of a rehearing. The company expects the Court of Appeals to affirm the CPUC's decision, with a ruling anticipated by the third quarter of 2004. Investors should monitor this legal review as it could impact the recognized income and the ongoing allocation of power contract profits.
Key Highlights
- 1California Court of Appeals granted a petition for review of the CPUC's decision on a settlement involving SDG&E's power purchase contracts.
- 2The settlement concerns the allocation of profits from intermediate-term power purchase contracts entered into before California's electric utility restructuring.
- 3Sempra Energy had previously recognized $65 million in after-tax income in Q3 2003 due to the CPUC's prior decision.
- 4An advocacy group for small consumers initiated the petition for review.
- 5Sempra Energy anticipates the Court of Appeals will affirm the CPUC's decision.
- 6A decision from the Court of Appeals is expected by the third quarter of 2004.