2017 - sempra.com

1 2017. UNITED STATES. SECURITIES AND EXCHANGE COMMISSION. Washington, 20549. FORM 10-K. (Mark One). [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2017. or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission Exact Name of Registrants as Specified in their Charters, State of Employer File No. Address and Telephone Number Incorporation Identification Nos. 1-14201 SEMPRA ENERGY California 33-0732627. 488 8th Avenue San Diego, California 92101. (619) 696-2000. 1-03779 SAN DIEGO GAS & ELECTRIC COMPANY California 95-1184800. 8326 Century Park Court San Diego, California 92123. (619) 696-2000. 1-01402 SOUTHERN CALIFORNIA GAS COMPANY California 95-1240705. 555 West Fifth Street Los Angeles, California 90013.

2 (213) 244-1200. SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of Each Exchange on Which Title of Each Class Registered Sempra Energy Common Stock, without par value NYSE. Sempra Energy 6% Mandatory Convertible Preferred Stock, Series A, NYSE. $100 liquidation preference SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Southern California Gas Company Preferred Stock, $25 par value 6% Series A, 6% Series 1. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Sempra Energy Yes X No San Diego Gas & Electric Company Yes No X. Southern California Gas Company Yes No X. Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Sempra Energy Yes No X. San Diego Gas & Electric Company Yes No X.

3 Southern California Gas Company Yes No X. Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Websites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12. months (or for such shorter period that the registrants were required to submit and post such files). Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

4 Sempra Energy X. San Diego Gas & Electric Company X. Southern California Gas Company X. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act. Smaller Large Non-accelerated reporting Emerging accelerated filer Accelerated filer filer company growth company Sempra Energy [ X ] [ ] [ ] [ ] [ ]. San Diego Gas & Electric Company [ ] [ ] [ X ] [ ] [ ]. Southern California Gas Company [ ] [ ] [ X ] [ ] [ ]. If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

5 Sempra Energy Yes No San Diego Gas & Electric Company Yes No Southern California Gas Company Yes No 2. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Sempra Energy Yes No X. San Diego Gas & Electric Company Yes No X. Southern California Gas Company Yes No X. Aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2017: Sempra Energy $ billion (based on the price at which the common equity was last sold as of the last business day of the most recently completed second fiscal quarter). San Diego Gas & Electric Company $0. Southern California Gas Company $0. Common Stock outstanding, without par value, as of February 22, 2018: Sempra Energy 255,324,212 shares San Diego Gas & Electric Company Wholly owned by Enova Corporation, which is wholly owned by Sempra Energy Southern California Gas Company Wholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy SAN DIEGO GAS & ELECTRIC COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTIONS I(1)(a) AND (b).

6 OF FORM 10-K AND IS THEREFORE FILING THIS REPORT WITH A REDUCED DISCLOSURE FORMAT AS. PERMITTED BY GENERAL INSTRUCTION I(2). DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Sempra Energy Proxy Statement to be filed for its May 2018 annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K. Portions of the Southern California Gas Company Information Statement to be filed for its May 2018 annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K. 3. [THIS PAGE INTENTIONALLY LEFT BLANK]. 4. SEMPRA ENERGY FORM 10-K. SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-K. SOUTHERN CALIFORNIA GAS COMPANY FORM 10-K. TABLE OF CONTENTS. Page glossary 6. Information Regarding Forward-Looking Statements 10. PART I. Item 1. Business 12.

7 Item 1A. Risk Factors 39. Item 1B. Unresolved Staff Comments 70. Item 2. Properties 70. Item 3. Legal Proceedings 70. Item 4. Mine Safety Disclosures 70. PART II. Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 71. Item 6. Selected Financial Data 74. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 76. Key Events and Issues in 2017 76. Results of Operations 76. Capital Resources and Liquidity 97. Factors Influencing Future Performance 115. Critical Accounting Policies and Estimates 139. Item 7A. Quantitative and Qualitative Disclosures About Market Risk 144. Item 8. Financial Statements and Supplementary Data 147. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 147.

8 Item 9A. Controls and Procedures 148. Item 9B. Other Information 152. PART III. Item 10. Directors, Executive Officers and Corporate Governance 152. Item 11. Executive Compensation 152. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 152. Item 13. Certain Relationships and Related Transactions, and Director Independence 152. Item 14. Principal Accountant Fees and Services 153. PART IV. Item 15. Exhibits and Financial Statement Schedules 155. Item 16. Form 10-K Summary 165. Signatures 166. Index to Consolidated Financial Statements F-1. Index to Condensed Financial Information of Parent S-1. This combined Form 10-K is separately filed by Sempra Energy, San Diego Gas & Electric Company and Southern California Gas Company. Information contained herein relating to any individual company is filed by such company on its own behalf.

9 Each company makes representations only as to itself and makes no other representation whatsoever as to any other company. You should read this report in its entirety as it pertains to each respective reporting company. No one section of the report deals with all aspects of the subject matter. Separate Item 6 and 8 sections are provided for each reporting company, except for the Notes to Consolidated Financial Statements in Item 8. The Notes to Consolidated Financial Statements for all of the reporting companies are combined. All Items other than Items 6 and 8 are combined for the reporting companies. 5. The following terms and abbreviations appearing in the text of this report have the meanings indicated below. glossary . 2016 GRC FD final decision in the California Utilities' 2016 General Rate Case AB Assembly Bill AFUDC allowance for funds used during construction ALJ administrative law judge AOCI accumulated other comprehensive income (loss).

10 ARO asset retirement obligation ASC Accounting Standards Codification ASU Accounting Standards Update Bankruptcy Court Bankruptcy Court for the District of Delaware Bay Gas Bay Gas Storage Company, Ltd. Bcf billion cubic feet BP British Petroleum bps basis points CAISO California Independent System Operator California Utilities San Diego Gas & Electric Company and Southern California Gas Company, collectively Cameron LNG JV Cameron LNG Holdings, LLC. CARB California Air Resources Board CCA Community Choice Aggregation CCC California Coastal Commission CCM cost of capital adjustment mechanism CEC California Energy Commission CENAGAS Centro Nacional de Control de Gas CEQA California Environmental Quality Act CFCA Core Fixed Cost Account CFE Comisi n Federal de Electricidad (Federal Electricity Commission in Mexico). Chilquinta Energ a Chilquinta Energ a and its subsidiaries CLF Chilean Unidad de Fomento CNE Comisi n Nacional de Energ a (National Energy Commission) (Chile).