Sempra Energy recently reported first-quarter 2012 earnings of $236 million, or $0.97 per diluted share, compared with $254 million, or $1.05 per diluted share in the first quarter 2011.Effective Jan. 1, the company changed its accounting treatment for investment tax credits related to solar-power projects from the flow-through method to the deferral method. Sempra Energy's 2011 results have been restated to reflect this change in accounting method.As previously reported, the General Rate Cases for both Southern California Gas Co. (SoCalGas) and San Diego Gas & Electric (SDG&E) currently are in process at the California Public Utilities Commission (CPUC). The revenue requirement established in these proceedings will be retroactive to Jan. 1, 2012. Until the Commission reaches a final decision, both utilities are recording revenues based on 2011 authorized levels, as adjusted for the recovery of actual incremental wildfire insurance premiums. When the final decision is reached, SoCalGas and SDG&E will record the cumulative change in revenues, retroactive to the beginning of the year.
"Our solid first-quarter results put us on track to meet our 2012 earnings-per-share guidance range of $4 to $4.30," said Debra L. Reed, chief executive officer of Sempra Energy. "We also made significant progress in developing a liquefied natural gas export facility at our Cameron LNG terminal."Yesterday, Sempra Energy announced that its Cameron LNG subsidiary signed a third and final commercial development agreement with a subsidiary of GDF SUEZ Ltd. to develop a natural gas liquefaction export facility at the site of the Cameron LNG receipt terminal in Louisiana. In April, Cameron LNG signed commercial development agreements with Mitsubishi Corporation and Mitsui & Co., Ltd. The three agreements bind the parties to fund all development expenses, including design, permitting and engineering, as well as to negotiate 20-year tolling agreements, based on key terms outlined in the commercial development agreements.
The completed liquefaction facility is expected to be comprised of three liquefaction trains with a total export capability of 12 million tonnes per annum of liquefied natural gas, or approximately 1.7 billion cubic feet per day. Pending regulatory approvals and achievement of other key milestones, the company plans to start construction of the facility next year and begin operations in late 2016.
As announced previously, on Jan. 1, Sempra Energy consolidated Sempra Generation, Sempra Pipelines & Storage and Sempra LNG into two new operating units: Sempra International and Sempra U.S. Gas & Power. Beginning in the first quarter 2012, Sempra Energy began reporting financial results under the following segments: San Diego Gas & Electric, Southern California Gas Co., Sempra South American Utilities, Sempra Mexico, Sempra Renewables and Sempra Natural Gas.
San Diego Gas & Electric
First-quarter earnings for SDG&E increased to $105 million in 2012 from $89 million in 2011, primarily due to earnings from construction work in progress.
Southern California Gas Co.
Earnings for SoCalGas in the first quarter 2012 were $66 million, compared with $68 million in last year's first quarter.
Sempra South American Utilities
Sempra South American Utilities recorded earnings of $40 million in the first quarter 2012, up from $22 million in the first quarter 2011. The increase was primarily due to the acquisition of the controlling interests in Chilquinta Energía and Luz del Sur in April 2011.
Sempra Mexico recorded first-quarter earnings of $37 million in 2012, compared with $39 million last year.
A 20-year contract to sell SDG&E wind power from Sempra Mexico's 156-megawatt (MW) first phase of the Energia Sierra Juarez wind project under development in Baja California was approved by the CPUC March 22. Pending receipt of all regulatory permits, construction on the project is expected to begin this year.
SEMPRA U.S. GAS & POWER
Sempra Renewables recorded earnings of $10 million in the first quarter 2012, up from $4 million in the first quarter 2011. The increase was primarily due to deferred income-tax benefits as a result of placing solar and wind generating assets in service in 2012.
Sempra Natural Gas
Sempra Natural Gas, which includes results from natural gas and gas-fired power operations in the U.S., recorded first-quarter earnings of $1 million in 2012, compared with $63 million in 2011. The decrease in earnings was primarily due to the expiration of the 10-year California Department of Water Resources power-supply contract in September 2011.
SOURCE Sempra Energy