 |
 |
|
Sempra Energy Utilities contributes to shareholder value by providing strong and predictable earnings and cash flow — the bedrock for Sempra Energy's growth. Southern California Gas Company and San Diego Gas & Electric performed well in 2002, exceeding their authorized return on equity.
At the end of 2002, SDG&E and SoCalGas filed with the California Public Utilities Commission a rate application that will determine their cost and rate structures beginning in 2004. We expect the CPUC to issue a decision by the end of 2003.
To accommodate customer growth and improve the reliability of our utility systems, our California utilities continue to invest in infrastructure improvements. In 2002, we invested approximately $731 million in utility capital expenditures, upgrading their gas and electric delivery networks.
While the past year has been disastrous for many wholesale and retail energy providers, Sempra Energy Global Enterprises has prospered.
The market exit by some competitors has created new opportunities. A good example is the liquefied natural gas (LNG) project in Hackberry, La., our new Sempra Energy LNG Corp. unit agreed to acquire in February 2003. After final regulatory approvals, the LNG receiving terminal being developed there could begin commercial operation by 2007 with daily processing capacity of up to 1.5 billion cubic feet of gas. With natural gas supplies tightening in North America, we believe that LNG will be a critical part of the supply mix over the next decade.
Also, in October 2002, Sempra Energy Resources acquired a 305-megawatt coal-fired Texas power plant, which we have renamed "Twin Oaks Power." As natural gas prices rise, this plant has the potential to become more valuable in the deregulated Texas power market, especially in comparison to gas-fired power plants there. |
|
