Sempra Energy takes a pragmatic approach to make money in utility and other energy markets in the US and around the world. In the US Sempra distributes natural gas to more than 7.2 million customer meters and electricity to 3.4 million customer meters through its Southern California Gas (SoCalGas) and San Diego Gas & Electric (SDG&E) utilities. Other reporting segments include Sempra US Gas & Power (natural gas and renewables) and Sempra International (Sempra Mexico and Sempra South American Utilities), which were formerly known as Sempra Global. Sempra Energy companies serve more than 32 million consumers worldwide.
The company has operation in the US, Chile, Peru, and Mexico. The US accounted for 79% of Sempra Energy's net sales in fiscal 2015. South America (Chile and Peru) accounted for 15%. Mexico accounted for the rest.
Sempra Energy's California utilities ( SDG&E and ( SoCalGas) accounted for 73% of Sempra Energy's 2015 revenues. Other units include Sempra International (Sempra South American Utilities and Sempra Mexico) and Sempra U.S. Gas & Power (Sempra Renewables and Sempra Natural Gas). The company also develops regasification facilities through Sempra LNG.
Sempra U.S. Gas & Power is a leading developer of renewable energy and natural gas solutions, with a focus on zero- and low-emission fuels. Together with its affiliates and joint-venture partners, it owns and operates 2,655 MW of generating capacity, fueled by the sun, the wind and low-emission natural gas. Sempra U.S. Gas & Power companies also operate natural gas storage facilities, pipelines and distribution utilities.
SDG&E provides safe and reliable energy service to 3.4 million consumers through 1.4 million electric meters and 873,000 natural gas meters in San Diego and southern Orange counties.
Sempra International develops, builds and operates energy infrastructure assets, and distributes energy in Latin America. In Mexico, the company operates IEnova, the first energy firm to be listed on the Mexican stock exchange and the second-largest energy company in the country. Sempra International also operates electric transmission and distribution utilities in Chile and Peru.
Sales and Marketing
Sempra Energy distributes electricity via distribution lines, transmission lines, overhead and underground lines. In the US Sempra Energy distributes natural gas and electricity to primarily residential customers through its SoCalGas and SDG&E utilities.
SDG&E provides electricity to a population of 3.4 million and natural gas to a population of 3.3 million.
Southern California Gas Company serve Residential, commercial, industrial, utility electric generation and wholesale customers. It covers a population of 21.6 million (about 6 million meters).
In fiscal 2015, the company's net sales decreased by $804 million compared to 2014due decreased revenues from SoCalGas and Sempra Natural Gas.
SoCalGas natural gas revenues decreased due to the reduced pricing of natural gas sold.
Sempra Natural Gas revenue's declined due to lower natural gas prices and volumes and lower power revenues due to the sale of the remaining block of Mesquite Power and a related power sale contract in April 2015, as well as from the deconsolidation of Cameron LNG, LLC in 2014.
Net income increased by 15% compared to 2014 due to decreased cost of natural gas utilities, partially offset by lower sales.
In fiscal 2015, net cash provided by the operating activities increased by 34% due to a change in regulatory balancing accounts.
The company pursues three disciplined growth platforms: U.S. utilities South American utilities and Mexican midstream, U.S. natural gas midstream, including LNG, and renewables.
Operating within these areas, Sempra Energy is focused on generating stable, predictable earnings and cash flows by investing in assets that are primarily regulated or contracted long-term. It is committed to build a new energy infrastructure that is contracted for the long term.
With the success of the 2014 launch of the Cameron LNG project (in Louisiana), Sempra Energy and its partners are considering adding two more liquefaction trains to the current three trains under development. Initial permitting work on the potential expansion already has begun. It is also exploring other LNG development opportunities in on the US Gulf Coast and in Mexico.
The company is also responding to a California state mandate (and accompanying financial incentives) to increase the amount of energy generated by utilities from non-fossil fuel sources.
In 2016, the company expects to make capital expenditures and investments of $5.1 billion. These expenditures include $2.7 billion for capital projects and plant improvements; $2.4 billion to buy its joint venture partner’s 50% interest i capital projects in Mexico and South America; and development of LNG, natural gas and renewable generation projects.
It is also selling assets to free up cash. In 2016, Sempra U.S. Gas & Power, a unit of Sempra Energy, agreed to sell its 25% interest in the Rockies Express Pipeline for $440 million to Tallgrass Development, LP.
In December 2015, Sempra Renewables sold its 100-percent interest in Rosamond Solar, a development project located in Antelope Valley, California, for $26 million.
In July 2014, Sempra Mexico sold a 50% interest in the 155-MW first phase of its Energía Sierra Juárez wind project to a wholly owned subsidiary of InterGen N.V. for $24 million.
In 2014 Sempra U.S. Gas & Power and Consolidated Edison Development (ConEdison Development) agreed to codevelop five solar projects in Nevada and California. The projects include Sempra U.S. Gas & Power's 250-MW Copper Mountain Solar 3 project near Las Vegas, and Consolidated Edison Development's CED California Holdings, LLC portfolio: the 50-MW Alpaugh 50, 20-MW Alpaugh North and 20-MW White River 1 facilities in Tulare County, and the 20-MW Corcoran 1 facility in Kings County. The renewable power from all of the projects has been sold under long-term contracts.
Mergers and Acquisitions
In 2015 Sempra Energy's Mexican subsidiary, Infraestructura Energética Nova, S.A.B. de C.V. (IEnova) and Petróleos Mexicanos (PEMEX) announced that IEnova purchased PEMEX's 50% equity interest in the Gasoductos de Chihuahua joint venture for $1.3 billion, plus $170 million in net debt. IEnova and PEMEX would maintain a joint venture for the Los Ramones Norte pipeline project. The partnership allows IEnova and PEMEX to continue building on their successful history of joint development of energy infrastructure projects in Mexico.
That year Sempra U.S. Gas & Power acquired the Black Oak Getty wind project in Minnesota from Geronimo Energy, LLC, a utility-scale wind and solar energy developer. After the completion of 78-megawatt (MW) Black Oak Getty, Sempra U.S. Gas & Power, along with its affiliates and joint-venture partners, will have wind facilities in seven states totaling more than 1,200 MW of generating capacity.