Fitch Rates San Diego Gas & Electric Mortgage Bonds 'AA'

Business Wire, Nov 14, 2005

CHICAGO -- Fitch has assigned an 'AA' rating to San Diego Gas & Electric Company's issuance of $250 million first mortgage bonds 5.30% series due Nov. 15, 2015. The bonds are secured by a lien on property with a net book value of $3.3 billion as of Sept. 30, 2005. Proceeds from the sale will be used to improve and expand utility plant. The Rating Outlook is Stable.

Existing utility plant consists of the electric distribution system and the gas distribution system primarily located in San Diego County. San Diego Gas & Electric Company (SDG&E) also owns a 20% interest in a nuclear generation facility. The California Public Utilities Commission has approved SDG&E's plans to invest $700 million in new generation and transmission.

SDG&E's ratings reflect the utility's strong financial performance, limited commodity price exposure, and the improving California regulatory environment. SDG&E's ratings are not currently constrained either by the rating of its parent Sempra Energy (senior unsecured debt rated 'A' by Fitch; Stable Outlook) or its affiliate Southern California Gas Company (senior unsecured debt rated 'AA-' by Fitch; Stable Outlook).

Total debt after issuance will be approximately $1.4 billion. On a pro forma basis, the debt issuance will increase SDG&E's total debt to total capitalization ratio to 48% from 43%, and total debt to cash flow from operations to 3.2 times (x) from 2.6x for the 12 months ended Sept. 30, 2005.

SDG&E is a regulated utility that provides electric and gas service to approximately 3.3 million customers in San Diego and southern Orange counties in California.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.