News release

Final San Onofre Nuclear Plant Closure Costs Settlement to Benefit Customers

SAN DIEGO, August 3, 2018 – The Settlement Agreement for the issues and costs related to the closure of the San Onofre Nuclear Generating Station (SONGS) is final after San Diego Gas & Electric (SDG&E), Southern California Edison (SCE) and other parties notified the California Public Utilities Commission (CPUC) that they accept the CPUC’s request to remove a provision that would have funded university-conducted greenhouse gas research.

 

The Settlement Agreement together with the Utility Shareholder Agreement among SDG&E, Sempra Energy, and SCE removes the remaining costs related to the SONGS closure from SDG&E customer bills. There are two elements to the reduction in SDG&E customer rates: a two-month bill decrease beginning November 1, 2018 of about $6.84 per typical residential customer per month; and a 0.9% ongoing monthly average bill reduction, which equals about $1.33 per month for a typical residential customer. Bill reductions for non-residential customers will vary depending on a number of factors. SDG&E will be reimbursed by SCE under the Utility Shareholder Agreement for those reductions, which we estimate to be approximately $160 million.

 

This settlement is good for our customers and is a positive conclusion to the investigation into the original SONGS settlement and related events,” said Dan Skopec, SDG&E’s vice president of regulatory affairs.

 

In 2013, SCE, as the majority owner and operator of SONGS, closed the plant and began decommissioning activities.

 

The settlement comes after a multi-year investigation by the CPUC into the closure of SONGS and related costs. In 2014, the parties reached a settlement regarding the allocation of costs between the utilities and their customers, which was approved by the CPUC. After allegations of improper communications between SCE and the CPUC surfaced, however, the CPUC reopened the proceeding to investigate the claims and determine if the alleged communications impacted the previous settlement. No violations were alleged to have been committed by SDG&E and no penalties were assessed on SDG&E.

 

The Settlement Agreement and Utility Shareholder Agreement followed the reopening of the proceeding by the CPUC.

Additional information concerning this Settlement Agreement that the CPUC approved and the Utility Shareholder Agreement is available in the Current Report on Form 8-K filed by SDG&E and Sempra Energy on January 31, 2018 with the U.S. Securities and Exchange Commission. As accepted yesterday by the parties, the Settlement Agreement includes only one modification: removal of the greenhouse gas emissions reduction research program.

The settling parties include SDG&E, SCE, the Alliance for Nuclear Responsibility (A4NR), the California Large Energy Consumers Association (CLECA), California State University (CSU), Citizens Oversight/The Coalition to Decommission San Onofre (CDSO), the Coalition of California Utility Employees (CUE), the Direct Access Customer Coalition (DACC), Ruth Henricks, the Office of Ratepayer Advocates (ORA), The Utility Reform Network (TURN), and Women’s Energy Matters (WEM).

SDG&E is an innovative San Diego-based energy company that provides safe, reliable, clean energy to better the lives of the people it serves in San Diego and southern Orange counties. The company has been recognized by the U.S. Environmental Protection Agency for leadership in addressing climate change, was the first to meet California’s goal of delivering 33 percent of energy from renewable sources, has fueled the adoption of electric vehicles and energy efficiency through unique customer programs, and supports a number of non-profit partners. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego. For more information, visit SDGEnews.com or connect with SDG&E on Twitter (@SDGE), Instagram (@SDGE) and Facebook.

                                                                                                                                

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This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "contemplates," "assumes," "depends," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions or discussions of guidance, strategies, plans, goals, opportunities, projections, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements.

 

Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: actions and the timing of actions, including decisions, new regulations, and issuances of permits and other authorizations by the California Public Utilities Commission, U.S. Department of Energy, California Department of Conservation’s Division of Oil, Gas, and Geothermal Resources, Federal Energy Regulatory Commission, U.S. Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, states, cities and counties, and other regulatory and governmental bodies in the United States; the timing and success of business development efforts and construction projects, including risks in timely obtaining or maintaining permits and other authorizations and risks in completing construction projects on schedule and on budget; the resolution of civil and criminal litigation and regulatory investigations; deviations from regulatory precedent or practice that result in a reallocation of benefits or burdens among shareholders and ratepayers; denials of approvals of proposed settlements or modifications of settlements; delays in, or disallowance or denial of, regulatory agency authorizations to recover costs in rates from customers or regulatory agency approval for projects required to enhance safety and reliability, any of which may raise our cost of capital and materially impair our ability to finance our operations; the greater degree and prevalence of wildfires in California in recent years and risk that we may be found liable for damages regardless of fault, such as in cases where the inverse condemnation doctrine applies, and risk that we may not be able to recover any such costs in rates from customers in California; the availability of electric power and natural gas, and natural gas pipeline and storage capacity, including disruptions caused by failures in the transmission grid, moratoriums or limitations on the withdrawal or injection of natural gas from or into storage facilities, and equipment failures;

changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance

 

 

on natural gas; risks that our counterparties will be unable or unwilling to fulfill their contractual commitments; weather conditions, natural disasters, accidents, equipment failures, computer system outages, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of greenhouse gases, radioactive materials and harmful emissions, cause wildfires and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of insurance, to the extent that such insurance is available or not prohibitively expensive; cybersecurity threats to the energy grid, 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 and employees; capital markets and economic conditions, including the availability of credit and the liquidity of our investments; fluctuations in interest rates and our ability to effectively hedge the risk of such fluctuations; the impact of recent federal tax reform and uncertainty as to how it may be applied, and our ability to mitigate adverse impacts; actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow at favorable rates; changes in foreign and domestic trade policies and laws, including border tariffs, and revisions to international trade agreements, such as the North American Free Trade Agreement, that make us less competitive or impair our ability to resolve trade disputes; the ability to win competitively bid infrastructure projects against a number of strong and aggressive competitors; the impact on reliability of our electric transmission and distribution system due to increased amount and variability of power supply from renewable energy sources; the impact on competitive customer rates due to the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through our electric transmission and distribution system and from possible departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation or other forms of distributed and local power generation, and the potential risk of nonrecovery for stranded assets and contractual obligations; and other uncertainties, some of which may be difficult to predict and are beyond our control.

 

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov. Investors should not rely unduly on any forward-looking statements. These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

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