FORM 8-K
Item 8.01 Other Events.
One Year Extension to File a Cost
of Capital Application
On November 30, 2015, by letter
dated November 25, 2015, the California Public Utilities Commission (CPUC)
advised San Diego Gas & Electric Company (SDG&E) and Southern California
Gas Company (SoCalGas) that it had granted both SDG&E and SoCalGas an
extension of their deadlines for filing the cost of capital application by one
year, from April 20, 2016 to April 20, 2017. The one year extension was made in
response to a request filed jointly by SDG&E, SoCalGas, Pacific Gas and
Electric Company (PG&E) and Southern California Edison Company (Edison)
(collectively, the Joint Investor-Owned Utilities or Joint IOUs) with the CPUC
on November 5, 2015.
Additionally, the agreement
leaves the current automatic Cost of Capital Adjustment Mechanism (CCM) in
place, but the Joint IOUs have agreed that there will be no changes to their
respective costs of capital during the one year extension, regardless of what
the CCM might otherwise indicate. To effectuate this
condition of the agreement, the Joint IOUs, Office of Ratepayer Advocates
and The Utility Reform Networkare directed to file a
petition to modify previous CPUC Decisions (D.) 08-05-035 and D.13-03-015 that
established the CCM.
We provide additional information
regarding the CPUCs cost of capital proceeding and the CCM in Note 14 of the
Notes to Consolidated Financial Statements in Sempra Energys, SDG&Es and
SoCalGas combined Annual Report on Form 10-K for the year ended December 31,
2014.
INFORMATION REGARDING
FORWARD-LOOKING STATEMENTS
We make statements
in this report that are not historical fact and constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are necessarily based upon assumptions with
respect to the future, involve risks and uncertainties, and are not guarantees
of performance. These forward-looking statements represent our estimates and
assumptions only as of the filing date of this report. We assume no obligation
to update or revise any forward-looking statement as a result of new
information, future events or other factors.
In this report,
when we use words such as believes, expects, anticipates, plans,
estimates, projects, forecasts, contemplates, intends, depends,
should, could, would, will, confident, may, potential, possible,
proposed, target, pursue, goals, outlook, maintain, or similar
expressions, or when we discuss our guidance, strategy, plans, goals,
opportunities, projections, initiatives, objectives or intentions, we are making
forward-looking statements.
Factors, among
others, that could cause our actual results and future actions to differ
materially from those described in forward-looking statements include
§local, regional, national and international economic,
competitive, political, legislative and regulatory conditions and
developments;
§actions and the timing of actions, including issuances
of permits to construct and licenses for operation, by the California Public
Utilities Commission, California State Legislature, U.S. Department of Energy,
Federal Energy Regulatory Commission, Nuclear Regulatory Commission, Atomic
Safety and Licensing Board, California Energy Commission, U.S. Environmental
Protection Agency, California Air Resources Board, and other regulatory,
governmental and environmental bodies in the United States and other countries
in which we operate;
§the timing and success of business development efforts
and construction, maintenance and capital projects, including risks in
obtaining, maintaining or extending permits, licenses, certificates and other
authorizations on a timely basis and risks in obtaining adequate and competitive
financing for such projects;
§energy markets, including the timing and extent of
changes and volatility in commodity prices, and the impact of any protracted
reduction in oil and natural gas prices from historical averages;
§the impact on the value of our natural gas storage
assets from low natural gas prices, low volatility of natural gas prices and the
inability to procure favorable long-term contracts for natural gas storage
services;
§delays in the timing of costs incurred and the timing of
the regulatory agency authorization to recover such costs in rates from
customers;
§deviations from regulatory precedent or practice that
result in a reallocation of benefits or burdens among shareholders and
ratepayers;
§capital markets conditions, including the availability
of credit and the liquidity of our investments;
§inflation, interest and currency exchange
rates;
§the impact of benchmark interest rates, generally
Moodys A-rated utility bond yields, on our California Utilities cost of
capital;
§the availability of electric power, natural gas and
liquefied natural gas, and natural gas pipeline and storage capacity, including
disruptions caused by failures in the North American transmission grid, pipeline
explosions and equipment failures and the decommissioning of San Onofre Nuclear
Generating Station (SONGS);
§cybersecurity threats to the energy grid, natural gas
storage and pipeline infrastructure, the information and systems used to operate
our businesses and the confidentiality of our proprietary information and the
personal information of our customers, terrorist attacks that threaten system
operations and critical infrastructure, and wars;
§the ability to win competitively bid infrastructure
projects against a number of strong competitors willing to aggressively bid for
these projects;
§weather conditions, conservation efforts, natural
disasters, catastrophic accidents, and other events that may disrupt our
operations, damage our facilities and systems, and subject us to third-party
liability for property damage or personal injuries;
§risks that our partners or counterparties will be unable
or unwilling to fulfill their contractual commitments;
§risks posed by decisions and actions of third parties
who control the operations of investments in which we do not have a controlling
interest;
§risks inherent with nuclear power facilities and
radioactive materials storage, including the catastrophic release of such
materials, the disallowance of the recovery of the investment in, or operating
costs of, the nuclear facility due to an extended outage and facility closure,
and increased regulatory oversight, including motions to modify
settlements;
§business, regulatory, environmental and legal decisions
and requirements;
§expropriation of assets by foreign governments and title
and other property disputes;
§the impact on reliability of SDG&Es electric
transmission and distribution system due to increased amount and variability of
power supply from renewable energy sources and increased reliance on natural gas
and natural gas transmission systems;
§the impact on competitive customer rates of the growth
in distributed and local power generation and the corresponding decrease in
demand for power delivered through SDG&Es electric transmission and
distribution system;
§the inability or determination not to enter into
long-term supply and sales agreements or long-term firm capacity agreements due
to insufficient market interest, unattractive pricing or other
factors;
§the resolution of litigation; and
§other uncertainties, all of which are difficult to
predict and many of which are beyond our control.
We caution you not
to rely unduly on any forward-looking statements. You should review and consider
carefully the risks, uncertainties and other factors that affect our business as
described in this report and in our most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on a combined basis for Sempra Energy, SDG&E and SoCalGas.