Fitch Rates Sempra Energy's Senior Unsecured Notes 'A'

NEW YORK, Oct 07, 2009 (BUSINESS WIRE) --
SRE | Quote | Chart | News | PowerRating -- Fitch Ratings has assigned an 'A' rating to Sempra Energy's (SRE) $750
million 6.0% senior unsecured notes due Oct. 15, 2039. The transaction
was priced Oct. 5, 2009 and is expected to close on Oct. 8, 2009.
Proceeds from the debt issuance are expected to be used for general
corporate purposes and to repay outstanding commercial paper. The Rating
Outlook for SRE is Stable.

SRE's ratings reflect the strength and relative predictability of its
California-based electric and natural gas distribution utility cash
flows and a balanced California regulatory environment. The ratings also
consider SRE's investment strategy, which is centered on its
California-utility businesses and regulated and unregulated natural gas
infrastructure projects in North America. Debt leverage at SRE is low
and consolidated credit metrics have been stable and are consistent with
the current rating category. For the trailing 12-month period ended June
30, 2009, SRE's funds-from-operations-to-interest ratio was 6.0 times
(x), which compares favorably with Fitch's target median for the 'A'
rating category.

Sempra's California-based electric and gas utilities benefit from
moderate growth and a constructive regulatory environment. General rate
case proceedings are generally filed on a three-year cycle with a
forward test year and inflation adjustments in years two and three. San
Diego Gas & Electric Co. and Southern California Gas Co. both have
authorized revenues set through the end of 2011. In addition, regular
cost-of-capital adjustments, balancing accounts, commodity cost
adjustment mechanisms, single-issue rate proceedings and pre-approval of
construction plans provide a reasonable opportunity for the utilities to
earn their authorized returns (which are above the industry average).
California is one of the few states to have implemented decoupling
mechanisms for both gas and electric (variance in earnings due to sales
volumes is deferred and collected from or refunded to customers
subsequently).

The ratings also recognize management's strong track record in
implementing its diversified-natural-gas-infrastructure strategy focused
on managing risk exposures through contractual obligations that minimize
commodity price and volume risk. Generally, SRE does not undertake
pipeline, LNG or other projects without first negotiating long-term
contracts that ensure minimal hurdle rates of return.

Sempra Energy's capital expenditures are estimated at $12 billion in
2009-2013, three-quarters of which is earmarked for investment in its
utility business and the remainder in its unregulated infrastructure
business. Planned utility investment is focused on electric and natural
gas transmission and advanced meters and is consistent with state policy
initiatives focused on conservation and renewable energy programs.

The ratings also consider a somewhat improved business risk profile
following the formation of the RBS Sempra Commodities LLP joint venture
in 2008, which included the sale of a 51% ownership interest in its
commodities business to the Royal Bank of Scotland (RBS). Importantly,
the transaction transfers responsibility for the joint venture's growth
capital, working capital and credit support to RBS, significantly
improving SRE's liquidity profile.

Additional information is available at 'www.fitchratings.com'.

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SOURCE: Fitch Ratings

Fitch Ratings, New York 
Philip W. Smyth, CFA, 212-908-0531 
Glen Grabelsky, 212-908-0577 
Media Relations: 
Cindy Stoller, 212-908-0526 
cindy.stoller@fitchratings.com

For full details on Sempra Energy (SRE) SRE. Sempra Energy (SRE) has Short Term PowerRatings at TradingMarkets. Details on Sempra Energy (SRE) Short Term PowerRatings is available at This Link.